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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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OCTOBER 17, 2012
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OCTOBER 17, 2012
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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.
Playing to Win: How Strategy Really Works
@HBRExchange | #HBRwebinar
NOVEMBER 25, 2014
The Playing to Win Strategy Toolkit
NOVEMBER 25, 2014
Everything You Need for a Winning Strategy
Download Today: https://hbr.org/product/playing‐to‐win‐strategy‐toolkit/PTWTL1‐KND‐ENG
Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
How Strategy Really WorksHarvard Business Review Webinar
Roger L. MartinNovember 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.
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Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
#1Strategy Is About Making ChoicesTo win, a company must choose to do some things and not others.
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Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
#2Strategy Is About Increasing the Odds of Success
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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.
#3Successful Strategy Making Combines Rigor and Creativity
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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. 12
Strategy Choice MakingProblemProblem
Possibility 1Possibility 1 Possibility 2Possibility 2 Possibility 3Possibility 3
Specify ConditionsSpecify Conditions
TestTest
ChooseChoose
Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
Strategy Is the Answer to Five Questions
How willwe win?How willwe win?
What management systems do we need?
What management systems do we need?
What is our winning aspiration?
What is our winning aspiration?
What capabilities must we have?
What capabilities must we have?
Where will we play?Where will we play?
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Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
The Strategy Cascade
How willwe win?How willwe win?
What management systems do we need?
What management systems do we need?
What is our winning aspiration?
What is our winning aspiration?
What capabilities must we have?
What capabilities must we have?
Where will we play?Where will we play?
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What does it mean to win in our business?
Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
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?
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Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
Playing to Win versus Playing to Play
• Starts with people rather than money—what does it mean to win with our customers?
• Has a competitive dimension—who are we winning against?
• Doesn’t have a winning element but focuses on simply serving a customer segment
• Is focused on an internal metric, such as “We’ll sell 25% more than we did last year”
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PLAYING TO WINPLAYING TO WIN PLAYING TO PLAYPLAYING TO PLAY
Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
The Strategy Cascade
How willwe win?How willwe win?
What management systems do we need?
What management systems do we need?
What is our winning aspiration?
What is our winning aspiration?
What capabilities must we have?
What capabilities must we have?
Where will we play?Where will we play?
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Where do we compete?
Which customer segments, channels, product categories, and geographies do we serve?
Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
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.
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Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
The Strategy Cascade
How willwe win?How willwe win?
What management systems do we need?
What management systems do we need?
What is our winning aspiration?
What is our winning aspiration?
What capabilities must we have?
What capabilities must we have?
Where will we play?Where will we play?
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What is our competitive advantage?
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.
How Will We Win?
This choice is about how we will win on the playing field we’ve chosen. What is our competitive advantage?
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Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
The Two Fundamental Ways to Win
• Seek systemic understanding of cost drivers
• Relentlessly drive costs down
• Sacrifice nonconforming customers
• Offer standard product or service
• Strive for deep understanding of customers’ needs
• Offer products that customers adore
• Guard customers jealously
LOW COSTLOW COST DIFFERENTIATIONDIFFERENTIATIONSustainable Competitive Advantage
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Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
The Strategy Cascade
How willwe win?How willwe win?
What management systems do we need?
What management systems do we need?
What is our winning aspiration?
What is our winning aspiration?
What capabilities must we have?
What capabilities must we have?
Where will we play?Where will we play?
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What specific capabilities support our competitive advantage?
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.
Which Capabilities Must We Have?
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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.
The Strategy Cascade
How willwe win?How willwe win?
What management systems do we need?
What management systems do we need?
What is our winning aspiration?
What is our winning aspiration?
What capabilities must we have?
What capabilities must we have?
Where will we play?Where will we play?
24
What systems support our capabilities?
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?
25
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.
The Strategy Cascade
How willwe win?How willwe win?
What management systems do we need?
What management systems do we need?
What is our winning aspiration?
What is our winning aspiration?
What capabilities must we have?
What capabilities must we have?
Where will we play?Where will we play?
26
Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
EXAMPLE FROM P&G
Oil of Olay
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Copyright 2014 A.G. Lafley, Roger L. Martin, and Jennifer Riel. Copying or posting is an infringement of copyright.
OIL OF OLAY
Old Strategy: Playing to Play
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• 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
• Leverage scale behind an array of products, widely available• “Classic” brand positioning
• To play in the global skin-care category• To turn from a shrinking position to a growing one, improving from
$750 million in sales
• Product-based innovation (development of line extensions)
• Strong retail relationships
• Measures of market share, in-store presence, in-stock positions
• Product R&D systems
What is our winning aspiration?
What is our winning aspiration?
Where will we play?Where will we play?
How will we win?How will we win?
What capabilities must we have?
What capabilities must we have?
What management systems do we need?
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. 29
OIL OF OLAY
New Strategy: Playing to 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
• Win convincingly in skin-care segment • Build a pillar for the beauty-care business
• Innovation (in product, distribution, packaging)• Consumer understanding• Go-to-market approaches• Partnering
• Partnering systems• Channel and consumer metrics
What is our winning aspiration?
What is our winning aspiration?
Where will we play?Where will we play?
How will we win?How will we win?
What capabilities must we have?
What capabilities must we have?
What management systems do we need?
What management systems do we need?
Questions?
OCTOBER 17, 2012
To ask a question … click on the “question icon” in the lower-right corner of your screen.
@HBRExchange | #HBRwebinar
Thank you for joining us!
The Play to Win presentation was made possible by the generous support of Tidemark.com
Sponsored by
NOVEMBER 25, 2014