Are you Playing to Win?
Whether you are a big or small business, you still need to decide Where to Play and How to Win.
As a management consultant and executive coach, I have worked with many organizations over the past 20 years. Including some of the world’s leading companies within their field as well as newly established scale-ups, which are still evolving as a business.
The most successful of these have a very clear purpose as well as a clear value proposition to their customers. However, the vast majority do not. Yes, they do have some sort of strategy and plan in place, but when cornered they cannot express their company’s purpose and how they create something unique for their customers: Where they are Playing and How they are Winning.
Typically, companies fall into the trap of not making deliberate choices as they evolve and consequently ending up trying to be everything for everybody – a strategy that seldom works in real life. In his classic work on strategy – and one of my all-time favorite books on the topic - “Playing to Win” Roger Martin and his co-author Procter & Gamble's A.G. Lafley pinpoint some of the typical strategy traps:
The do-it-all strategy: failing to make choices and making everything a priority. Remember, strategy is choice.
The Don Quixote strategy: attacking competitive “walled cities” or taking on the strongest competitor first, head-to-head. Remember, where to play is your choice. Pick somewhere you can have a chance to win.
The Waterloo strategy: starting wars on multiple fronts with multiple competitors at the same time. No company can do everything well.
The something-for-everyone strategy: attempting to capture all consumer or channel or geographic or category segments at once. Remember, to create real value, you must choose to serve some constituents really well and not worry about the others.
The dreams-that-never-come-true strategy: developing high-level aspiration and mission statements that never get translated into concrete where-to-play and how-to-win choices, core capabilities, and management systems. Remember that aspirations are not strategy.
The program-of-the-month strategy: settling for generic industry strategies, in which all competitors are chasing the same customers, geographies, and segments in the same way. The choice cascade and activity system that supports these choices should be distinctive. The more your choices look like those of your competitors, the less likely you will ever win.
Based on my experience, the single most important trap to avoid is failing to make choices. If you want to be successful, you must make actives choices even though this also means saying NO to attractive markets, segments or product categories.
Let me explain. Strategy in its purest form can be defined as the following:
A strategy is an integrated set of choices which positions the firm in its
industry to create sustainable advantages relative to competition and
superior financial returns
This basically translates to making clear choices. Constantly. And to work with these choices in a structured manner, let’s again turn to the basic ideas of Roger Martin. Strategy can best be expressed as an integrated set of choices, something he calls the Strategic Choice Cascade.
What is our winning aspiration?
Where will we play?
How will we win in chosen markets?
Which capabilities must we have?
What management systems do we need?
1. What is our winning Aspiration
An enduring corporate vision guides you through change. It also spells out what will never change. A company’s practices and strategies should change continuously; its core ideology should not. Core ideology defines a company’s timeless character. It’s the glue that holds the enterprise together even when everything else is up for grabs. If you look at Sony in the 1950s, its core ideology was centret around “Being a pioneer – not following others; doing the impossible”.
But having a core ideology is not enough. You also need to set forward an envisioned future, the second component of an effective vision. Sony described it as “Become the company most known for changing the worldwide poor-quality image of Japanese products”. This forward-looking part of the vision should include a Big, Hairy, Audacious Goals (BHAGs) to rev up the entire organization.
Key questions you need to answer:
What is the overall core ideology (purpose and values)?
What is the envisioned future (what do you dream about)?
2. Where will we play?
As I wrote earlier on, one of the typical pitfalls of making strategy is to try to be something for everyone; attempting to capture all consumer or channel or geographic or category segments at once.
Very seldom this is the best strategy and making it very difficult to differentiate yourself, less alone focus. But to really understand where to play requires that you have a strategic view of the playing field, sometimes referred to as your game-board.
How you define the game-board will vary across companies and industries, but you will need to have a view on this. The simpler it is, the easier it will be to operationalize it. Typical elements to consider are a) which customer segments; b) which markets; c) which distribution channels and/or d) which products/services.
Key questions you need to answer:
Who are our target customers, and what are their needs and motivations?
Where should we play in our future gameboard (customer segments; markets; channels and/or product/services)?
3. How will we win in chosen markets?
Knowing where to focus in the market is the first step. Second step is to formulate how to win in those markets.
Designing value propositions is done by identifying the sweet spot between customers’ needs and pains and what we want to deliver. A customer value proposition is about serving our customer needs and solve business problems. A customer value proposition describes an opportunity to develop or serve solutions to our customers problem.
However, in order to be able to deliver a winning value proposition, it is a requirement that you understand your customer – meaning, that you truly understand their jobs-to-be-done (what are they trying to achieve), their needs and their pains. Only if you understand this, will be able to deliver the solution, i.e. your value proposition.
Key questions you need to answer:
What is our value proposition to customers?
What are our sources of defensible advantage?
What business and profit model(s) are we applying?
4. What capabilities must we have?
If we are going to deliver on our value proposition to win, what are the derived demands to our organization. This can be our own competences and/or resources or our ability to work together with partners (commercially, technically and/or other).
If we want to follow through on our strategy, we need to ensure that we also have the capabilities aligned. And as we cannot always be the best entity to do everything, what are the areas that we need/want to do in-house, and what are the areas that we should seek support externally.
Key questions you need to answer:
What distinctive capabilities do we need?
How do we enable our organizational system?
Can we do it alone or do we need partnerships?
5. What management systems do we need?
To deliver on our strategy, we will need to develop clear objectives and KPIs to guide the day-to-day activities. These goals often can be broken down into a number of strategic initiatives (or in lack of better terminology “Must-win-Battles”), which are the key elements the organization need to focus on in order to deliver on the strategy.
In addition, growth seldom comes at no cost. There will probably be an overall business case with associated investments needed to realize both the overall strategy and the strategic initiatives.
And lastly, a strategy needs to become alive and part of the organization and culture. Implementation starts from the very beginning of the strategy process as it is the key people in the organization, who will be the differentiating factor as to whether you are successful or not…
Key questions you need to answer:
What initiatives do we need in order to realise our aspiration?
What are the required investments?
How do we ensure successful launch and change?
To end this article, I would like to bring your attention back to the very beginning and the pitfalls mentioned. In the words of Roger Martin;
“You need to be uncomfortable and apprehensive: True strategy is about placing bets and making hard choices. The objective is not to eliminate risk but to increase the odds of success”.