Strategy: Where and how to play
I’m always in for a good business book, specially when one of the protagonists was your professor. Filippo Passerini was one of the main executives for P&G. He lead the M&A with Gillette and brought new IT capabilities to the company. During the classes at the MBA, he used to talk about this VUCA world (vulnerable, unpredictable, chaotic and ambiguous). Several times he talked about Playing to Win and he told us this book was a longer version of his classes; that´s why I picked it up, 2 years after graduating, but as hungry as usual.
Playing to win discusses the way P&G and its brands approach strategy. And what’s unique about them? Well, the title says it all.
P&G has 5 questions or areas when it comes to clarify the way to move forward
What is our winning aspiration? Determine a particular place and a determined way to win. And winning is translated about clear statements about an ideal future. Where will we play? This are the sets of choices that narrow your competitive field. In which market, to which customers, through which channels, in which product categories and at which vertical stage. How will we win where we have chosen to play? What will enable the company to create unique value to customers in a way that is distinct from competition. What capabilities must be in place to win? (1) What core capabilities must be in place to win; range and quality and activities that will enable company to win (2) what management systems are required to support this strategic choices?; And what are core capabilities? (a) Deep consumer understanding (b) Innovation (c ) Brand Building (d) Go-to-Market ability (e) Global scale What management systems are required to ensure the capabilities are in place? Foster, support and measure the strategy.
Each category has depth and several layers. Is not as easy as it seems. Moreover, the network the company has is complex and simple at the same time.
At the heart of this network, there’s consumer understanding, brand building, innovation, go-to-market capabilities and scale. All of them make a lot of sense when you are P&G, but also they make sense when you are a small company just trying to meet each month.
So, what´s important about where to play and how to win? What should be the framework?
The industry, attractiveness of segments. Customers, what do they value? Relative position, how does your company fare regarding competition? Competition, what competition will do once you have chosen your course of action
The strategy logic flow
First you need to understand the industry attractiveness, this means segmentation and how attractive is each segment.
Then we move to customer value analysis: whether it is as a cost leader or differentiator, the company needs to understand what the customer values. Once we have a deep understanding of our customer we need to capture our relative position. What capabilities do we have in house and most importantly, how our costs looks like? Now we go to Competitors analysis, is all about anticipating competitors reactions once we have started our strategy deployment. Last but not least, our strategic choice. At some point, the book states that a big part of a strategy is about saying “no” and this last part is all about where to play and how to win.
The book closes with many questions (my favorite sort of book, open for you to sort it).
- Have you define winning and your winning inspirations?
- Have you decided where can you play to win?
- Have you determined how will you win?
- Have you built your core capabilities to compete?
- Do your management systems and KPI´s are ready to support the precious 4 pillars?