In great strategies, the where-to-play and how-to-win choices fit together to make the

company stronger.

Two questions flow from and support the heart of strategy: (1) what capabilities must be in place to win, and (2) what management systems are required to support the strategic choices?

It is tempting to believe that strategy in general, and where-to-play and how-to-win choices in particular, are needed only for outward-facing functions—those folks who interact with external consumers and competitors. But every line of business and function

should have a strategy—one that aligns with the strategy of the company overall and decides where to play and how to win specifically for its context. At P&G, corporate functions are all tasked with crafting their own strategies in this way. Joan Lewis, global consumer market knowledge officer, explains: “Where to play and how to win has been a very important framework for us. Organizations are often good at one or the other without realizing that they’re two different sets of decisions. At one point, we weren’t as disciplined about our where-to-play choices. It was everywhere anybody needed consumer insight or anywhere we thought it could add value. Just like a business dilutes its focus and in turn its growth potential when you try to do too many things at a time or do things that are further away from your core strengths, we were relatively diluted in the nature of the impact we could have.

It is essential that all of the systems have at least some capabilities and activities that line up with the core capabilities of the organization.

We wanted to foster a team-like approach that would allow the CEO to collaborate with the presidents and to help advance their thinking in real time. We wanted to create useful dialogue in place of a one-way, bulletproof presentation. Instead of burying the issues, we wanted to talk about them openly. We wanted a new management system for the creation and review of the five strategic choices.