Most organizations recognize that having a clear strategy clarifies the goals and objectives of the firm, leading to higher rates of success. On the other hand, many companies also struggle with fully defining their strategy.
In “Playing to Win,” a new book by Proctor and Gamble CEO A.G. Lafley and Roger Martin, strategy is condensed to four key, actionable principles.
First, an organization must identify its “winning aspiration”. In other words, what is the purpose of the enterprise and why is the company in business in the first place? Further, the authors specifically stress “winning” in defining goals and objectives. Employees and management alike become more vested and passionate about succeeding when they view the competition from a winning mentality. Participating in a market just to play the game will not lead to a long-term, profitable strategy.
Next, “where you will play” and “how you will win” are integrated and complementary strategic choices. It is important for firms to identify the customers, markets, technologies, and products for their goods and services. Equally important is a decision on where they will not play. As Harvard business professor Michael Porter has said, “You can’t be all things to all people.”
Following the key choices regarding customers, geographies, and other segments, the organization must identify core capabilities to accomplish their goals. These competencies span from technical know-how to management systems and IT that support strategic decisions. A common question is “do we invent in-house or license technology?” The answer, of course, is it depends. Competency building within a firm depends on consumer understanding and commitment to speed to market.
Finally, management systems, offer support, coaching, and mentoring for work teams charged with carrying out the strategy. Employees should be trained to leverage core competencies while the human resources department reinforces the organization’s commitments by bringing depth to the available talent pool.
Strategy is a tough subject to address and it requires an investment by senior management. The categories of choices laid out by Lafley and Martin should help any organization begin to clarify its strategic objectives.