Playing to Win: How Strategy Really Works

Playing to Win: How Strategy Really Works
Featuring Roger Martin, Director of the Martin Prosperity
Institute at the Rotman School of Management and co-author of
Playing to Win: How Strategy Really Works and the Playing to
Win Strategy Toolkit.
NOVEMBER 25, 2014
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Playing to Win: How Strategy Really Works
Today’s Speaker
Roger Martin, Director of the Martin
Prosperity Institute at the Rotman School of
Management and co-author of Playing to
Win: How Strategy Really Works and the
Playing to Win Strategy Toolkit.
NOVEMBER 25, 2014
@HBRExchange | #HBRwebinar
The Playing to Win Strategy Toolkit
Everything You Need for a Winning Strategy NOVEMBER 25, 2014
Download Today: https://hbr.org/product/playing‐to‐win‐
strategy‐toolkit/PTWTL1‐KND‐ENG
How Strategy Really Works
Harvard Business Review Webinar
Roger L. Martin
November 25, 2014
Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
Overview of Playing to Win
#1 Strategy is about making choices.
#2 Strategy is about increasing our odds
of success, not guaranteeing it.
#3 Strategy making combines rigor and
creativity.
Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
8
#1
Strategy Is About
Making Choices
To win, a company must choose to do some
things and not others.
Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
9
#2
Strategy Is About
Increasing the Odds
of Success
There is no such thing as a PERFECT strategy.
Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
10
#3
Successful Strategy
Making Combines
Rigor and Creativity
Strategy should be creative and scientific—
it involves generating and testing hypotheses.
Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
11
Strategy Choice Making
Problem
Possibility 1
Possibility 2
Possibility 3
Specify Conditions
Test
Choose
Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
12
Strategy Is the Answer to
Five Questions
What is our
winning
aspiration?
Where will
we play?
How will
we win?
What
capabilities
must we
have?
What
management
systems do
we need?
Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
13
The Strategy Cascade
What is our
winning
aspiration?
What does it mean to win in our
business?
Where will
we play?
How will
we win?
What
capabilities
must we
have?
What
management
systems do
we need?
Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
14
What Is Our Winning Aspiration?
A winning aspiration is a future-oriented statement
about the guiding purpose of the organization:
•
What does our organization exist to do?
•
What does winning mean for us?
Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
15
Playing to Win versus Playing to Play
PLAYING TO WIN
PLAYING TO PLAY
• Starts with people rather
than money—what does
it mean to win with our
customers?
• Doesn’t have a winning
element but focuses on
simply serving a
customer segment
• Has a competitive
dimension—who are we
winning against?
• Is focused on an internal
metric, such as “We’ll
sell 25% more than we
did last year”
Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
16
The Strategy Cascade
What is our
winning
aspiration?
Where do we compete?
Where will
we play?
Which customer segments, channels,
product categories, and geographies
do we serve?
How will
we win?
What
capabilities
must we
have?
What
management
systems do
we need?
Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
17
Where Will We Play?
This choice defines the playing field on which we choose
to compete:
• Customer segment
• Distribution channel
• Product or service
• Geography
• Stage of production
It is also about where NOT to play.
Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
18
The Strategy Cascade
What is our
winning
aspiration?
Where will
we play?
How will
we win?
What is our competitive
advantage?
What
capabilities
must we
have?
Do we compete on low
cost or differentiation?
Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
What
management
systems do
we need?
19
How Will We Win?
This choice is about how we will win on the playing
field we’ve chosen.
What is our competitive advantage?
Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
20
The Two Fundamental Ways to Win
LOW COST
• Seek systemic understanding
of cost drivers
• Relentlessly drive costs
down
• Sacrifice nonconforming
customers
Sustainable
Competitive
Advantage
DIFFERENTIATION
• Strive for deep
understanding of
customers’ needs
• Offer products that
customers adore
• Guard customers
jealously
• Offer standard product or
service
Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
21
The Strategy Cascade
What is our
winning
aspiration?
Where will
we play?
How will
we win?
What specific capabilities
support our competitive
advantage?
What
capabilities
must we
have?
What do we need to be
really great at doing?
Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
What
management
systems do
we need?
22
Which Capabilities Must We Have?
Capabilities are the activities that enable our organization
to bring the where-to-play and how-to-win choices to life.
Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
23
The Strategy Cascade
What is our
winning
aspiration?
Where will
we play?
How will
we win?
What systems support our
capabilities?
What
capabilities
must we
have?
How do we measure the
success of our strategy?
Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
What
management
systems do
we need?
24
What Management Systems
Do We Need?
Management systems are the processes, structures,
and rules that build our capabilities and that reinforce
and measure our organization’s strategic choices.
Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
25
The Strategy Cascade
What is our
winning
aspiration?
Where will
we play?
How will
we win?
What
capabilities
must we
have?
What
management
systems do
we need?
Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
26
EXAMPLE FROM P&G
Oil of Olay
Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
27
OIL OF OLAY
Old Strategy: Playing to Play
What is our
winning
aspiration?
• To play in the global skin-care category
• To turn from a shrinking position to a growing one, improving from
$750 million in sales
Where will
we play?
• Customers: Women ages 50 and older
• Channel: Sold through discount retailers, grocery, and drugstores
• Product: Low-price skin-care products (cleanser, moisturizer, etc.)
• Geography: Different brands and products by country/region
How will
we win?
• Leverage scale behind an array of products, widely available
• “Classic” brand positioning
What
capabilities
must we
have?
What
management
systems do
we need?
• Product-based innovation (development of line
extensions)
• Strong retail relationships
• Measures of market share, in-store
presence, in-stock positions
• Product R&D systems
Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
28
OIL OF OLAY
New Strategy: Playing to Win
What is our
winning
aspiration?
• Win convincingly in skin-care segment
• Build a pillar for the beauty-care business
Where will
we play?
•
•
•
•
How will
we win?
Customers: Target younger women just noticing the first signs of aging
Channel: Sell through mass channels (best customers)
Product: New products and formulations that fight multiple signs of aging
Geography: Consistent global brand
• Move upmarket in product, price, and promotion
• Establish “masstige” channel presence
What
capabilities
must we
have?
What
management
systems do
we need?
•
•
•
•
Innovation (in product, distribution, packaging)
Consumer understanding
Go-to-market approaches
Partnering
• Partnering systems
• Channel and consumer metrics
Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
29
Questions?
To ask a question
… click on the
“question icon” in
the lower-right
corner of your
screen.
OCTOBER 17, 2012
@HBRExchange | #HBRwebinar
Thank you for joining us!
The Play to Win presentation was made possible by the
generous support of Tidemark.com
NOVEMBER 25, 2014
Sponsored by