In recent years, there have been two extremely fascinating books by CEOs who have spent their working lives in one company. The first one is Who Says Elephants Can’t Dance? by former IBM CEO Lou Gerstner and the second, Only the Paranoid Survive, by Andy Grove, former CEO of Intel. Gerstner’s reinvention of IBM was one of the most dramatic corporate turnarounds of the twentieth century and Who Says… tells the story of how the company went from the brink of bankruptcy to the forefront of the technological innovation quite succinctly. Only the… is also a back-from-crisis saga but it does a great job of putting together some crucial lessons for future leaders.
In a sense, Playing to Win by A G Lafley, former chairman and CEO of Procter & Gamble, and Roger L Martin, Dean, Rotman School of Management, takes the good work forward. It looks at strategy through the eyes of a man who led P&G’s stunning turnaround in the 2000s and the advisor who worked with him closely. That gives this book a light autobiographical feel, but that’s a minor issue. Playing to Win clearly elevates the discussion of strategy. It gets to the heart of what is important for a business leader straightaway — how to make choices that help him or her control events that may occur during the life of the organisation rather than allowing events to control the choices of the leader. It goes on to establish five essential choices that, when addressed in an integrated way, will push a company ahead of its competitor. The best part is each of these choices is explained with real examples. If you go deep into these choices you will see strategy is no more — or less — than structured, intelligent thinking about business.
Take the first choice: “what is your winning aspiration?” When the authors worked on the re-launch of Oil of Olay, they set the “winning aspiration” of taking a languishing brand that wasn’t a factor in the global skin care market and turning it into a leading brand that would anchor P&G’s entire beauty business in the biggest beauty sub-category — skin care.
The second is, “where to play?” Oil of Olay, say the authors, had historically chosen to play in the wrinkle-treatment segment of the skin care market, aimed primarily at women over 50 and sold through the mass channel (groceries, pharmacies and mass merchandisers). P&G contemplated numerous where-to-play choices and settled on a shift from an older, wrinkle-focused demographic to women 35-50 years of age who were facing one of what they came to call the “Seven Signs of Aging.” The company chose to stay in the mass channel where they had relationship strengths and not enter the department/specialty store channel with Olay.
The third is, “how to win?” P&G “chose” to win with the targeted consumer base by providing a prestige channel product and purchasing experience at a price point below that of prestige stores and with a more convenient shopping experience. The company, says the book, dramatically upgraded the quality of the product by developing better active ingredients. It transformed the packaging to be consistent with a prestige store experience and worked with key retail partners to create a prestige-like shelf and point of purchase experience.
The fourth choice is, “what are the required capabilities?” — that is, what are the capabilities one must have to win. For re-launched Olay, P&G, say the authors, needed to build the capability of working with the retailers (to produce a distinctive “mastige” in-store experience), it needed to build capabilities in working with the beauty press (to ensure they endorsed the upmarket brand) and it needed to build the capability to develop ever-better active ingredients that would indeed fight the seven signs of aging.
The fifth and final choice, according to the authors, is, “what are the management systems to underpin and support the capabilities necessary for winning?” Capabilities don’t stay robust or ever get built in the first place if there aren’t management systems that ensure it on an ongoing basis. To go back to Olay, P&G needed to build the management system for developing and maintaining relationships with the beauty editors in the industry and the celebrity endorsers. The company also needed management systems for managing the relationships with the group of outside firms that helped it create compelling and eye-catching displays in-store to ensure that Olay had the “mastige” not mass ambience and feel.
Together, the five choices propelled Olay forward. The brand was transformed from a relatively low-margin, flat $750 million a year business to a very high margin, fast growing, $2.5 billion business — and global market share leadership in a critical beauty business.
This is one example that the authors have used to describe how one particular brand won. There are a host of other examples that show how some brands got it all wrong, thanks to some really bad choices. Of course, most of the brands in the book that have strategies that are muddled and undifferentiated are not from the P&G stable. But, then, a book like this can only be written from the vantage point of many years of research and deep understanding of the practice of strategy.
PLAYING TO WIN
How Strategy Really Works
A G Lafley & Roger L Martin
Harvard Business Review Press
216 pages, Price not stated