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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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NOVEMBER 25, 2014

Playing to Win: How Strategy Really Works


Todays 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

EverythingYouNeedforaWinningStrategy

NOVEMBER 25, 2014

DownloadToday:
https://hbr.org/product/playingtowin
strategytoolkit/PTWTL1KNDENG

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.

#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.

#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 moneywhat does
it mean to win with our
customers?

Doesnt have a winning


element but focuses on
simply serving a
customer segment

Has a competitive
dimensionwho are we
winning against?

Is focused on an internal
metric, such as Well
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 weve 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 organizations 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.

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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