Playing to Win

Playing to Win Plot Summary

Introduction

In the turbulent waters of modern business, organizations face a relentless storm of challenges: market disruptions, technological upheavals, fierce competition, and ever-changing customer demands. Many leaders respond by creating complex strategies filled with buzzwords and ambitious goals, yet they struggle to translate these impressive documents into real-world results. Why do so many strategic efforts fail to deliver? The answer lies not in a lack of intelligence or dedication, but in a fundamental misunderstanding of what strategy truly is. Strategy isn't about creating perfect plans or following industry trends. At its core, strategy is about making clear, tough choices that position your organization to win in the marketplace. It requires the courage to decide not just what you will do, but what you won't do. Throughout the following chapters, we'll explore a practical framework for crafting winning strategies—from defining what winning means for your organization to building the capabilities and systems needed to make those strategic choices reality. This journey will transform how you think about strategy, replacing confusion with clarity and hesitation with confident action.

Chapter 1: Define Your Winning Aspiration

What does winning look like for your organization? This seemingly simple question forms the foundation of any effective strategy. Winning aspirations are not vague mission statements or incremental goals—they are clear, compelling visions of a future where your organization stands victorious in the marketplace. They define success in terms of real competitive advantage and value creation. Consider the story of Starbucks. When Howard Schultz articulated his winning aspiration, he didn't merely aim to sell more coffee than competitors. His vision was to create "the third place" in people's lives—a community gathering space between home and work where people could connect while enjoying premium coffee experiences. This aspiration was specific, ambitious, and focused on winning in a clearly defined arena. It guided every subsequent strategic choice, from store design to product offerings to staff training. The aspiration wasn't just about growing market share; it was about creating an entirely new category of experience that competitors would struggle to replicate. Similarly, when A.G. Lafley became CEO of Procter & Gamble in 2000, he defined winning as "improving the lives of the world's consumers." This aspiration drove P&G to focus relentlessly on consumer needs and experiences rather than just selling products. The company restructured its innovation processes around consumer insights, which led to transformative products like Swiffer (which reinvented cleaning) and Febreze (which created an entirely new category of fabric refreshers). To define your winning aspiration, start by asking who your most important stakeholders are. For most businesses, this means customers or consumers. What would "delighting" them truly look like? Then consider your competitors—not just your traditional rivals, but the very best in your space. How will you surpass them? Your aspiration should be externally focused, emphasizing the value you'll create rather than internal metrics like revenue growth. Avoid the trap of merely playing to play—setting goals that focus on participation rather than victory. When Saturn was launched by General Motors in the 1990s, it aimed to "compete" in the small-car segment against Japanese imports. This modest aspiration led to modest investments and ultimately failure. In contrast, companies that play to win make the tough choices and substantial investments required to achieve market leadership. The power of a winning aspiration is that it provides the context for all other strategic choices. It creates a north star that guides decision-making throughout the organization and inspires people to reach for something meaningful. Remember, without a clear definition of winning, strategy becomes an empty exercise in planning rather than a powerful tool for market success.

Chapter 2: Choose Where to Play and How to Win

The heart of strategy lies in answering two fundamental questions: where will you play, and how will you win there? These choices determine the competitive arena you'll enter and the unique approach you'll take to succeed in that space. Making these decisions isn't easy—they require saying "no" to many opportunities so you can focus resources on your best chances for victory. The Olay brand transformation illustrates the power of these choices. By 2000, Olay (then called Oil of Olay) was struggling with an aging customer base and the derisive nickname "Oil of Old Lady." The team faced a critical decision about where to play in the skin care market. Rather than continuing to compete in the low-end mass market or trying to enter the high-end department store segment, they created an entirely new "masstige" segment—prestige-like products sold through mass retail channels. This where-to-play choice targeted women in their mid-thirties who were noticing their first signs of aging but weren't yet served by either mass or prestige brands. The how-to-win choice complemented this perfectly: Olay would win through superior technology, premium packaging, and higher pricing that still remained below department store brands. The team conducted extensive testing and discovered that at $18.99—significantly higher than their previous $3.99 price point—the product was perceived as high-quality by mass consumers while representing excellent value to prestige shoppers. When paired with dramatically improved formulations that actually delivered on anti-aging promises, this strategy allowed Olay to grow from an $800 million brand to a $2.5 billion powerhouse. To determine your where-to-play choices, consider which geographies, customer segments, distribution channels, and product categories offer the greatest potential for winning. Bounty paper towels, for example, chose to play only in North America where structural industry conditions were favorable, focusing on three distinct consumer segments with different needs. For your how-to-win choices, you must decide whether you'll compete primarily through low cost or differentiation, then identify the specific capabilities and activities that will deliver your chosen advantage. These choices must reinforce each other. A premium positioning won't succeed if your capabilities and cost structure can't deliver superior quality. Similarly, a low-cost strategy requires operational excellence and scale that may not align with highly customized offerings. The key is finding combinations where your organization's distinctive strengths match market opportunities better than competitors can. Remember that no single "right" strategy exists for an industry—many companies succeed with different where-to-play and how-to-win combinations. What matters is that your choices are coherent, distinctive, and build on your organization's unique attributes. By making clear choices about where to play and how to win, you create focus that enables superior execution and sustainable competitive advantage.

Chapter 3: Build Distinctive Capabilities

Winning strategies require distinctive capabilities—the integrated set of skills and activities that enable your organization to deliver on its where-to-play and how-to-win choices. These capabilities aren't merely things you're good at; they're the interconnected activities that, when performed at the highest level, create sustainable competitive advantage no competitor can easily match. The Gillette acquisition by Procter & Gamble in 2005 illustrates the critical role of capabilities in strategy execution. At $57 billion, this was one of the largest consumer goods acquisitions in history, bringing together 130,000 employees across 80 countries. Unlike most corporate mergers that destroy value, this one delivered over $2 billion in cost synergies within two years and continues generating substantial revenue growth. The secret? A meticulous capability assessment before the acquisition and deliberate capability building afterward. When evaluating the deal, P&G didn't just look at Gillette's brands and financials. CFO Clayt Daley asked a crucial question: "Will P&G be a better owner of these businesses than the current owner?" This meant assessing whether P&G's capabilities in consumer understanding, brand building, innovation, retail partnerships, and global scale could enhance Gillette's performance. Equally important was whether Gillette's capabilities in masculine marketing, retail merchandising, and new product launches would strengthen P&G. After the acquisition, capability building became priority one. When Chip Bergh took over the Gillette business, he immediately focused on applying P&G's consumer understanding capabilities to develop products for emerging markets. He sent scientists to India to live with consumers rather than just conducting laboratory tests. As one scientist reported with tears in his eyes: "I spent three days with this one guy, shopping with him, going to the barber shop with him, watching him shave. Now I really understand the company's purpose about improving consumers' lives." This immersion led to the creation of Gillette Guard, a revolutionary razor designed specifically for Indian men who shave with just a cup of cold water. Within three months, it became the best-selling razor in India. To build distinctive capabilities in your organization, start by creating an "activity system" that visually maps your core capabilities and the activities that support them. This system should show how your capabilities fit together and reinforce one another to create competitive advantage. Then assess this system against three criteria: Is it feasible to build? Is it distinctive from competitors? Is it defensible against competitive responses? Different levels of your organization will require different capabilities, but they should share common "reinforcing rods" that connect them. For instance, P&G's five core capabilities run through all business units, though each unit has additional capabilities specific to its markets. This creates coherence across the organization while allowing specialized expertise where needed. Remember that capabilities aren't built overnight. They require sustained investment, deliberate practice, and careful nurturing. But when your organization possesses distinctive capabilities that align perfectly with your where-to-play and how-to-win choices, you create a formidable competitive advantage that can endure for years.

Chapter 4: Create Supporting Management Systems

Even the best strategy will fail without robust management systems to support it. These systems—the structures, processes, and measures that guide organizational behavior—translate strategic choices into consistent action throughout your organization. They ensure that your strategy isn't merely discussed in boardrooms but actually shapes daily decisions at every level. When A.G. Lafley became CEO of Procter & Gamble, he discovered that strategy reviews had become what David Taylor (then a brand manager) called "corporate theater at its best." These presentations involved massive binders of information and audiences of twenty-five people, creating a culture where managers focused on avoiding embarrassment rather than making meaningful strategic choices. As one executive admitted, "Your job in that meeting is to talk anything but strategy. Bring innovation projects, bring advertising copy, bring material to entertain him. You don't want him messing around with your strategy." Lafley completely redesigned these reviews. Instead of formal presentations, he created dialogue-oriented sessions focused on a few critical strategic issues identified in advance. Only key decision-makers attended, and participants couldn't bring more than three pages of new material. The questions centered on fundamental strategic choices: Was P&G winning in this category? How did they really know? What core capabilities was the business lacking? These changes transformed strategic reviews from defensive performances into productive strategic conversations that built the organization's strategic thinking muscles. Beyond review processes, P&G created systems to support each of its core capabilities. For consumer understanding, they invested in new research methodologies and created Consumer & Market Knowledge (CMK), a department that blended quantitative and qualitative approaches to gain deeper consumer insights. For innovation, they established Connect + Develop, an open innovation system that brought external partners into the innovation process. For branding, they developed the Brand Building Framework (BBF), which codified P&G's approach to brand development for the first time. To create effective management systems in your organization, start by designing a clear process for strategy creation, review, and communication. Ensure this process encourages honest dialogue rather than defensive presentations. Next, build systems to support and enhance your core capabilities, allocating resources to the activities most critical to your strategy. Finally, develop meaningful measures that track both activities and outcomes related to your strategic choices. Measurement deserves special attention. P&G replaced traditional market-based metrics with "operating TSR" (total shareholder return)—an integrated measure of sales growth, profit margin improvement, and capital efficiency. Unlike stock price, these measures reflected operational performance that managers could directly influence while still correlating with long-term shareholder value. Similarly, in the diaper business, they created a "weighted purchase intent" measure that captured all factors driving consumer preference, not just absorbency. Remember that management systems must evolve as your strategy evolves. Regularly review and refine these systems to ensure they continue supporting your strategic choices and building your distinctive capabilities.

Chapter 5: Foster Strategic Thinking

Developing strategic thinking throughout your organization is perhaps the most powerful way to ensure sustainable success. While strategy often starts at the top, the ability to make strategic choices must exist at every level if your organization is to respond effectively to changing market conditions and emerging opportunities. Jeff Weedman, P&G's vice president of global business development, faced a strategic challenge when two promising technologies emerged from P&G labs—a stretchable plastic film for trash bags (later named ForceFlex) and a self-sealing plastic wrap (later called Press'n Seal). Traditional thinking suggested P&G should either commercialize these technologies itself or license them to others. Instead, Weedman and his team employed strategic thinking to find a third option that created far more value. After analyzing the industry dynamics, they realized entering the plastic bags and wraps market would trigger fierce competitive responses from established players like Glad (owned by Clorox) and Saran Wrap. Even with superior technology, P&G would face an uphill battle requiring massive investments in manufacturing capabilities and potentially years of losses. Yet simply licensing the technology would capture only a fraction of its potential value. Weedman pursued a creative solution: a joint venture with competitor Clorox. In exchange for the technologies and assignment of twenty P&G scientists to the venture, P&G received a 10% stake in the overall Glad business with an option for another 10%. This unprecedented partnership with a direct competitor allowed both companies to win: Clorox got breakthrough technologies that revitalized Glad, while P&G captured substantial value without entering a new category. Within five years, Glad grew from a $400 million business to more than $1 billion. To foster strategic thinking in your organization, start by teaching the fundamentals of strategy—particularly the five-question cascade: What is our winning aspiration? Where will we play? How will we win? What capabilities do we need? What management systems must we have? Then create forums where people can practice applying these questions to real business challenges. Change how your teams communicate about strategy by introducing "assertive inquiry"—a technique that blends clear advocacy of your own thinking with genuine curiosity about others' perspectives. This approach, based on the stance that "I have a view worth hearing, but I may be missing something," creates productive tension rather than defensive positioning. Questions like "This is how I see the situation, and why; to what extent do you see it differently?" open dialogue rather than shutting it down. When evaluating strategic options, teach teams to ask "what would have to be true?" for each possibility to succeed, rather than arguing about what is true. This reverse-engineering approach helps identify the barriers to each strategic option and design targeted tests to determine which option has the best chance of success. Remember that strategic thinking isn't an innate talent but a skill that improves with practice. By creating opportunities for people throughout your organization to make and learn from strategic choices, you build a powerful capability for sustained competitive advantage.

Summary

Strategy isn't a mysterious art practiced only by CEOs and consultants—it's a disciplined approach to making choices that position your organization to win. Throughout this journey, we've explored how defining clear winning aspirations creates the foundation for strategic thinking. We've seen how making tough choices about where to play and how to win enables focus and differentiation. We've learned that building distinctive capabilities and supporting management systems turns strategic choices into sustainable competitive advantage. As A.G. Lafley reminds us, "Strategy is choice. More specifically, strategy is an integrated set of choices that uniquely positions the firm in its industry so as to create sustainable advantage and superior value relative to the competition." This perspective transforms strategy from an academic exercise into a practical framework for action. When you view strategy through this lens, you stop trying to do everything and start making the clear choices that truly matter. Take one action today: Gather your team and honestly assess whether you have a real strategy by answering the three questions in the cascade. Are your winning aspirations clear and compelling? Have you made genuine choices about where to play and how to win? Do you have the capabilities and management systems to deliver on those choices? If not, commit to working through each question systematically. The journey toward a winning strategy begins with acknowledging where you truly stand today.

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A.G. Lafley

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