Playing to Win
Compelling Communication for Your Strategy
I have received several questions about articulating and communicating strategy, including one on how to make it vivid like the legendary Minard map shown above, penned in 1869 by Charles Joseph Minard to visually depict the French army casualties across the various stages of Napoleon’s ill-fated 1812 invasion of Russia. In response, I am dedicating my 45th Playing to Win/Practitioner Insights (PTW/PI) piece to Compelling Communication for Your Strategy. (Links for the rest of the PTW/PI series can be found here.)
Less is More
Generally speaking, the longer the document, the weaker the strategy and the lower the effectiveness of its communication. Strategy is a few key choices. If you can’t readily identify those choices, you don’t have a strategy.
To communicate your strategy choices well, you need to leave out a lot. Remember, doing things for which the opposite is stupid on its face is not strategy. For example, the opposite of caring about customers (i.e., not caring) is stupid on its face. Of course, you should care about customers for the obvious reason that you don’t want to be stupid. But put all of those non-stupid things in a back-up document. It doesn’t mean that they are not important, or you don’t need to invest in them. But listing all the things that you are going to do that any non-stupid participant in your Where-to-Play (WTP) would do simply muddles the effective communication of your strategy.
Your true strategy is limited to the choices you have made that enable you to be distinctive relative to your competitors. Those choices are likely to be few in number. If there are lots, it probably means that it isn’t a precise strategy. These choices can involve a distinctive WTP and/or a distinctive How-to-Win (HTW), backed by distinctive (or distinctive level of investment in) Must-Have Capabilities (MHC) and Enabling Management Systems (EMS). Plus, it includes the Winning Aspiration which motivates those choices, as well as specifying the outcomes that you expect to result from the strategy choices.
That is all you need. If it is more than five pages, it is very likely to be a bad strategy. If it is 100 pages, I wouldn’t even bother to read it and instead would start from scratch on creating a new one. And one page is even better than five pages. Less is more when it comes to specifying and communicating your strategy.
A Picture is Worth 1,000 Words
While I have nothing to offer that is as visually brilliant as the Minard map, I do recommend communicating strategy in pictures either instead of or as a supplement to a textual description. My favorite communication tool for strategy is a combination of text and picture — the strategy choice cascade. Below is the cascade for the strategic transformation of Oil of Olay, a slowly growing $750 million brand that ranked outside the top five skin care brands as of the late 1990s, into Olay, which grew in the decade of the 2000’s to the number one skin care brand in the world, a $2.5 billion powerhouse. It is an old example, but because the Olay strategy underwent another iteration in 2015, I can safely use the 1999 strategy as an illustration.
It specifies the few things that really matter and are distinctive, while leaving out the things that don’t/aren’t. For example, the WTP targets women aged 25–49 noticing the first signs of aging rather than the 50+ segment on which the industry focused. On its own, the choice of mass channels (i.e., food, drug, mass merchandisers) is not unique. Numerous competitors distribute through the mass channels while numerous others distribute through the prestige channel (i.e., department stores and specialty beauty stores like Sephora). However, in combination with the WTP, it is distinctive. The Olay strategy involved winning by creating a ‘masstige’ positioning that combined the best of the mass channel experience (convenience and absence of pushy salespeople) and prestige channel experience (higher quality products, better packaging, more product information) in the mass channel. And it was positioned at a price point unheard of in the mass channel — the price for the initial Olay Total Effects product was $18.99 when the highest previous mass channel price would have been $4.99. Eventually Olay would hit the $50 price point for its top-of-the-line Olay Pro-X.
In terms of MHC, the masstige concept required substantial investment by the retailers to create an experience that felt similar to the prestige channel. Convincing the retailers to invest in this way leveraged off P&G’s historically strong retailer relationships but required P&G to invest further in its capabilities to partner/co-invest with its retailers. It also required capabilities unique to mass channel players in influencer marketing. That is, to succeed at the near-prestige price point, P&G had to learn how to work with beauty magazine editors to encourage favorable reviews of the new Olay line-up. And it needed to increase its investment in skin care R&D to industry-leading levels. Finally, in EMS, it had to develop new systems for co-investing with retailers on creating the prestige-like environment in their mass stores, which involved higher levels of trade spending than P&G’s traditional systems would have allowed.
In addition to this one-page graphical presentation of strategy, I also like one particular visualization for each of WTP and HTW.
A generic version of the WTP visualization is below:
Think of two axes that best describe your WTP choice. It could be geography & price point, or distribution channel & customer size, or, for Olay, age demographic & price point. Then show where you and your most important competitors are positioned. The smaller the overlap, the better for your strategy. If you have chosen the identical WTP as one or more competitors, it will be harder to have a distinctive HTW — not impossible, just a lot harder. If you have chosen different WTP, it is easier to find a distinctive HTW. In addition, the intensity of competition is going to be lower.
Let me use two contrasting P&G examples to illustrate. When P&G entered the orange juice business with Citrus Hill in 1982, orange juice was a great category. The two dominant players were Coca Cola subsidiary, Minute Maid, which sold mainly frozen concentrated orange juice (FCOJ), and Beatrice (and later Seagram and later still PepsiCo) subsidiary, Tropicana, which exclusively sold whole juice. Those choices produced a small overlap between the competitors. If a consumer wanted FCOJ it bought Minute Maid and if whole, it bought Tropicana. P&G entered with a WTP directly on top of Minute Maid with Citrus Hill FCOJ. P&G thought it had a strong enough HTW — a proprietary way to enrich orange juice with a calcium level as high as found in the most commonly-used source for calcium — milk. However, its entry as another FCOJ player precipitated a brutal war with Minute Maid, which, by starting to offer whole juice, had already heated up the competition with Tropicana. Citrus Hill could never overcome Minute Maid’s huge scale advantage with both retailers and consumers and P&G exited the business in 1992 without ever having turned a profit.
Contrast that with Pringles, which P&G launched in 1968 into the potato chip business which was and still is dominated by PepsiCo subsidiary, Frito-Lay. However, Frito-Lay’s WTP was whole chips delivered by way of direct store delivery (called DSD). Because of the fragility of bags of potato chips, Frito-Lay drivers deliver to each individual store rather than to a central warehouse and place the bags on the store shelves themselves, an extremely expensive form of delivery for which Frito-Lay has dominant scale. Pringles was engineered to have the least possible overlap with Frito-Lay’s WTP. It was a reconstituted chip, engineered to stack efficiently and safely in a can that was robust enough to go through traditional and much cheaper warehouse distribution. As a result, Pringles and Frito-Lay co-existed happily and profitably for decades until P&G sold Pringles to Kellogg for $2.7 billion in 2012 as part of its exit from all food businesses.
I find that this visualization of WTP helps push me to think of ways to create greater separation in WTP from my major competitors, and if that is not possible, to make sure that I have a HTW that will really win against a competitor in the identical WTP. Plus it provides a clear snapshot of my strategy versus those of competitors.
That leads to my favorite HTW visualization.
I always want to be able to characterize my strategy versus competitors on this chart. Am I able to charge more than industry average as a differentiator — which would put my strategy in one of the two right-side bars? If so, have I been able to keep my costs at a level consistent with industry averages — which would put my strategy in the winning bar the farthest right?
Alternatively, do I have appreciably lower costs than industry average as a low-cost player — which would put my strategy in one of the two left-side bars? If so, have I been able to keep my value/quality at a level consistent with industry averages — which would put my strategy in the other winning bar the farthest left?
I find this to be a helpful visualization because if I am one of the four middle bars, it signals that I am playing to play not playing to win. None of those middle bars is a rewarding place to be. It is all hard work and no reward as the players at both ends who are playing to win have the ability to jerk me around like a puppet on a string. It signals that it should be back to square one for strategy.
If you are on the receiving end of strategy, be extremely wary of long documents. If strategy can’t be summarized one page and described thoroughly in five, it is probably a plan not a strategy. As I have argued previously, a plan is a useful complement to strategy, but it is not a substitute for strategy. If it runs many pages, it is almost certainly a laudable list of non-stupid actions that do not guarantee or even make it likely that you will win. That is the classic strategy trap of a plan masquerading as a strategy. As a consequence, you likely need to start from scratch or nearly scratch on developing a real strategy.
If you are presenting a strategy that you can’t summarize in one page and describe thoroughly in five, chances are you haven’t thought hard enough about your strategy choices. Use your inability to communicate your strategy succinctly as a spur to focus on determining what distinctive choices across the strategy choice cascade that you have made and what others you need to make. To test those choices, create the above pictures of WTP and HTW to determine whether that WTP/HTW combination is truly distinctive relative to competition. If it not distinctive, go back to work until it is a truly compelling strategy. And you will know when it is because you will be able to communicate it in a single cascade chart as with Olay!