“Playing to Win” Explains the 5 Strategy Mistakes Businesses Make

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strategy mistakes

In this highly competitive economy, small businesses need a strategy to flourish and grow. The question to ask yourself is:  are you playing to win, not just trying to stay in the game?

With their book Playing to Win: How Strategy Really Works authors Roger Martin and A.G. Lafley make the argument that delaying decisions on your strategy can have enormous consequences for your business.  Martin and Lafley are both Procter and Gamble executives.

I learned about the book through a mention at Harvard Business Review and asked for a review copy. It turned out to be a thought-provoking strategy book designed for large companies. But it’s one that small business leaders interested in strategy can learn from.

Martin and Lafley assert that strategy is a young discipline — it’s “about making specific choices” in your business.  Company leaders, they say, commit five kinds of mistakes when laying out their strategies:

  • Leaders define strategy solely as a vision. Mission and vision statements are elements of strategy, but they aren’t enough.  They offer no guide to productive action and no explicit road map to the desired future.
  • Leaders define strategy simply as a plan.
  • Leaders deny that long-term (or even medium-term) strategy is possible because of a rapidly changing world.
  • Leaders define strategy as the optimization of what they are already doing in their current business.
  • Leaders define strategy as following best practices, such as benchmarking against competition, and then doing the same set of activities.

The authors explain why strategy often goes wrong.  They note that making choices is hard work, and it doesn’t always fit into all the other work to be done in a business.

See if this sounds like you.  You are in a rapidly evolving marketplace.  Things are moving so fast that you ditch long-term strategies, believing it’s futile to decide what you will do 3 or 5 years in the future.  That’s a mistake, say the authors:

“Some leaders argue that it’s impossible to think about strategy in advance and that instead a firm should respond to new threats and opportunities as they emerge….  Unfortunately, such an approach places a company in a reactive mode, making it easy prey for more-strategic rivals…. Not only is strategy possible in times of tumultuous change, but it can be a competitive advantage and a source of significant value creation. Is Apple disinclined to think about strategy? Is Google? Is Microsoft?”

Small business owners may dismiss the points made by the book as academic and not for them. But small businesses need strategy, too. A delayed or non-existent strategy can lead to mediocre positioning in the marketplace, inability to compete and ultimately failure.

Oh, but you have marketing plans and other kinds of plans. Martin and Lafley say plans are not enough:

“Plans and tactics are also elements of strategy, but they aren’t enough either. A detailed plan that specifies what the firm will do (and when) does not imply that the things it will do add up to sustainable competitive advantage.”

A Strategy Book With Five Steps

The authors suggest a playbook of five steps to a strategy:

  • Decide on a winning aspiration.
  • Choose “where to play” – the market for your offering.
  • Decide “how to win” – executing strategy.
  • Develop core capabilities.
  • Create a management system.

The first several chapters of Martin and Lafley’s book address the implications of these choices. For example, in the first few pages we are shown how deciding on a winning aspiration can address the problem of relying upon a vision alone.  Winning aspirations offer a guiding purpose for your business:

“There are many ways the higher-order aspiration of a company can be expressed. As a rule of thumb, start with people rather than money. Peter Drucker argued that the purpose of an organization is to create a customer, and it’s still true today…. Starbucks, Nike, and McDonald’s, each massively successful in its own way, frame their ambitions around their customers.”

We then see how Nike’s, Starbucks’, and McDonald’s aspirations are similar, and how we can apply this same principle in our own businesses:

“Each company does not want to serve each customer. They want to win with them. . .And that is the single most crucial dimension of a company’s aspiration: a company must play to win. To play merely to participate is self-defeating….  Why is it so important? Winning is worthwhile.”

These observations help explain how strategy mistakes can muddle business decisions. Aspirations can lead teams to develop new methodologies instead of just optimizing old ones.

I liked that the authors created a way to stay on track, and with a do-it-yourself approach. The book avoids issues that are probably best addressed in books about project management or team dynamics.  But those who have read such books already won’t be disappointed with Playing to Win, particularly after reading Chapter 8.

Martin and Lafley use examples to illustrate the value of strategic thinking through their Procter and Gamble experience.  Chapter 1 sets the scene for revitalizing Oil of Olay, a high profile product stagnating in a profitable and growing marketplace.  Other large corporations are mentioned, so small business readers will need to imagine how these experiences also apply to them.

Yet the authors’ writing is clear enough to spark the reader’s imagination. You will have a clear means to improve your business strategy and make better choices, regardless of whether you are working with multiple employees and contacts or just with an army of one.

If you need to establish a clear strategy while dealing with personnel concerns, Playing to Win is certainly made to order. Martin and Lafley have unlocked valuable thoughts about what strategy should be, how it should be managed, and how businesses can win the day.  This is a strategy book worth reading.

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Pierre DeBois Pierre Debois is Associate Book Editor for Small Business Trends. He is the Founder of Zimana, a consultancy providing strategic analysis to small and medium sized businesses that rely on web analytics data. A Gary, Indiana native, Pierre is currently based in Brooklyn. He blogs about marketing, finance, social media, and analytics at Zimana blog.

4 Reactions
  1. Martin Lindeskog

    Pierre: You have won me over, I have to get this book! 😉 My gut feeling is that Sharkonomics (that I reviewed on January 19), could be a companion book to Playing to Win.