That, in sum, is the process for choosing between possibilities for where to play and how to win. First, frame a choice. Second, explore possibilities to broaden the set of mutually exclusive possibilities. Third, for each possibility, ask, what would have to be true for this to be a great idea, using the logic flow framework to structure your thinking. Fourth, determine which of the conditions is the least likely to actually hold true. Fifth, design tests against those crucial barriers to choice. Six, conduct tests. Finally, in light of the outcome of the tests and how those outcomes stack up against predetermined standards of proof, select the best strategic choice possibility. This process broadens the possibilities up front and then systematically narrows the field. It leverages different perspectives to enrich the discussion, rather than bogging it down.
Related Quotes
Considering the dynamic feedback loop between all five choices, strategy isnât easy. But it is doable. A clear and powerful framework for thinking about choices is a helpful start for managers and other leaders intent on improving the strategy for their business or function. Strategy neednât be the purview of a small set of experts. It can be demystified into a set of
five important questions that can (and should) be asked at every level of the business: What is your winning aspiration? Where should you play? How can you win there? What capabilities do you need? What management systems would support it all? These choices, which can be understood as a strategic choice cascade, can be captured on a single page.
They can create a shared understanding of your companyâs strategy and what must be done to achieve it.
The Heart of Strategy:
Where to play is about understanding the possible playing fields and choosing between them. It is about selecting regions, customers, products, channels, and stages of production that fit well togetherâthat are mutually reinforcing and that marry well with real consumer needs. Rather than attempt to serve everyone or simply buy a new playing field or accept your current choices as inevitable, find a strong set of where-to-play choices.â
(Lafley and Martin, âPlaying to Winâ, p.72) âWHERE-TO-PLAY DOS AND DONâTS:
⢠Do choose where you will play and where you will not play. Explicitly choose and prioritize choices across all relevant where dimensions (i.e., geographies, industry segments, consumers, customers, products, etc.).
⢠Do think long and hard before dismissing an entire industry as structurally unattractive; look for attractive segments in which you can compete and win.
⢠Donât embark on a strategy without specific where choices. If everything is a priority, nothing is. There is no point in trying to capture all segments. You canât. Donât try.
⢠Do look for places to play that will enable you to attack from unexpected directions, along the lines of least resistance. Donât attack walled cities or take on your strongest competitors head-to-head if you can help it.
⢠Donât start wars on multiple fronts at once. Plan for your competitorsâ reactions to your initial choices, and think multiple steps ahead. No single choice needs to last forever, but it should last long enough to confer the advantage you seek.
⢠Do be honest about the allure of white space. It is tempting to be the first mover into unoccupied white space. Unfortunately, there is only one true first mover (as there is only one low-cost player), and all too often, the imagined white space is already occupied by a formidable competitor you just donât see or understand.
The strategy logic flow:
This is the fourth and final element of the logic flow. The question to address is this: is there some competitive response that could undermine or trump the where-to-play and how-to-win choices?
Inevitably, this is guesswork to some degree; you canât know for sure what a competitor will or wonât do in the face of your actions. But forming a thoughtful hypothesis is important. It is far better to ask what your competitors will likely do before you proceed than to simply wait and see what happens. Only strategies that provide a sustainable advantageâor a significant lead in developing future advantagesâare worth investing in. You donât want to design and build a strategy that a competitor can copy in a heartbeat, or one that will prove ineffective against a simple defensive maneuver on a competitorâs part.
A strategy that only works if competitors continue to do exactly what they are already doing
is a dangerous strategy indeed.
To make good choices, you need to make sense of the complexity of your environment. The strategy logic flow can point you to the key areas of analysis necessary to generate sustainable competitive advantage. First, look to understand the industry in which you play (or will play), its distinct segments and their relative attractiveness. Without this step, it is all too easy to assume that your map of the world is the only possible map, that the world is unchanging, and that no better possibilities exist. Next, turn to customers. What do channel and end consumers truly want, need, and valueâand how do those needs fit with your current or potential offerings? To answer this question, you will have to dig deepâ engaging in joint value creation with channel partners and seeking a new understanding of end consumers. After customers, the lens turns inward: what are your capabilities and costs relative to the competition? Can you be a differentiator or a cost leader? If not, you will need to rethink your choices. Finally, consider competition; what will your competitors do in the face of your actions? Throughout the thinking process, be open to recasting previous analyses in light of what you learn in a subsequent box. The basic direction of the process is from left to right, but it also has interdependencies that require a more flexible path through it.