Playing To Win
Overcoming the Integrative Strategy Challenge
Bridging Foreground & Background
The biggest outage in utilizing the Playing to Win tool for strategy is failure of integration. There are five choices — as shown — and they need to be considered both individually and as a whole. But too often, they are only considered individually, resulting in crummy strategy. So, I have dedicated this Playing to Win/Practitioner Insights piece to Overcoming the Integrative Strategy Challenge: Bridging Foreground & Background. All previous PTW/PI can be found here.
The Trickiest Thing
I always say — maybe too cavalierly — that any reasonably smart and hard-working 11-year-old could do strategy if it was fine to just go down the five boxes of the Strategy Choice Cascade one at a time and knock them off. The only thing that makes strategy hard is that you have to consider the five boxes together and make a set of choices that fit together and, even further, reinforce each other.
Despite AG and I emphasizing that requirement in Playing to Win and me repeating it in virtually every speech I give, podcast I do, or article I write, I get lots of emails and social media posts that say pretty much the same thing: “Roger, we did Winning Aspiration (WA), and then we did Where-to-Play (WTP), and now we are really stuck on How-to-Win (HTW), what should we do?” My response, always sorrowful because I hate to see people struggle to this extent with my tools, is that the reason you are stuck on HTW is not despite completing WA and WTP, it is because you have completed WA and WTP.
When you lock and load on the earlier boxes, you dramatically restrict the options on the latter boxes — to the point that there often aren’t any good options in the later boxes. And that is why and when they contact me. In response, I have to tell them that all their hard work on the earlier boxes was largely wasted.
But I have taken to heart that this integration is really hard for people. Channeling my beloved mentor Chris Argyris, who impressed on me the central importance of providing advice on which the recipient can take productive action, I know that I have to make it easier.
A Useful Metaphor
On that front, I have come upon an analogy that seems to have helped various clients — and as I have written before in this series, analogy is a valuable and underdeveloped strategy skill.
Imagine a painter — a landscape painter with (say) a forest in the background and a horse carriage in the foreground. Physically, the painter can’t paint the foreground and the background at the same time. But also, the painter must not paint them independently of one another. If the painter paints the background without regard for the foreground, the final painting will look hopelessly disjointed. And the same holds if the foreground is painted without regard for the background. Painters can’t make their work an integrated whole if they paint the individual parts individually.
But how do they overcome the problem of needing to paint the background and foreground separately but targeting an integrated solution? The answer is that successful painters keep the background in mind while working on the foreground — and vice versa.
Implications for Strategy
Be painterly! Do the same for the Strategy Choice Cascade. There are five boxes on the cascade to break the strategy challenge into chunks that are tractable for the strategist. If you just said ‘do strategy’ it would be too hard. But that chunking creates an integration challenge. To overcome the challenge, you need to be painterly. As you focus on each box, effectively you are placing it in the foreground. But while doing that you need to keep in mind the four other boxes in the background. They can’t disappear entirely from your thinking.
Winning Aspiration (WA)
When you focus on Winning Aspiration, think of it as being your foreground. You might say your WA is to be the innovation leader in our industry. But long before the proverbial paint is dry on that, you must consider the background: Is there a WTP/HTW combination that makes this WA at least minimally plausible? If not, you must return to the foreground of the WA to adjust it — and the dip into the WTP/HTW background will make you more thoughtful about what might be a more useful rather than unrealistic WA.
If instead, you have a WA offsite to begin the strategy process and build consensus around your WA, you will be in a terrible position when you figure out much later that there is no WTP/HTW combination that can make this WA a reality. You either have to tell everybody that has come to consensus on the WA that it is a dumb idea or keep the WA and have a non-integrated strategy. The latter is what I see very often — a WA (whether it is called mission, vision, purpose or whatever) that has absolutely nothing to do with the real strategy of the organization — and is subject to mockery internally and externally.
Where-to-Play (WTP)
One of the biggest weaknesses in the practice of strategy is WTP-lock. Companies, and in particular the analytically minded people in them, love ‘market mapping’ exercises (an activity that makes me nervous). ‘Strategy’ consultants love it. They make tons of profit doing market maps for companies to start their strategy processes. They show which are the big segments, the growing segments, the profitable segments, etc. They even figured out how to make it still more profitable for themselves by scraping the data from all their clients in an industry (since their business model is to work for all of them) and producing off-the-shelf market maps that they can sell at nearly 100% gross margin.
Excited by the market map — because it is so numbers-filled that it looks like the truth — teams tend to pick the WTP on the market map. Sadly, the chosen WTP is often the same as all its competitors because they all have the same market map purchased from the same ‘strategy consultant’ and they too pick all the segments that are biggest, fastest growing, and most profitable (that is, before they become blood baths).
On this front, I remember doing a one-day offsite aimed at developing a wealth management strategy for one of the giant Swiss Banks. They insisted that their WTP should be wealthy people — with the biggest focus on really wealthy people. I tried (entirely unsuccessfully) to explain that probably every single competitor in the wealth management space would also focus on wealthy people — particularly really wealthy ones. What a novel WTP — a wealth manager focusing on managing wealth!
Don’t lock on a WTP, regardless of how awesome it feels, without delving into the background and asking is there a plausible HTW to match the WTP. If there isn’t, then it doesn’t matter how great the WTP might look on its own: it has no utility. If you lock on a WTP before considering the HTW, you tie one arm behind your back.
Rotate from WTP in the foreground to HTW in the background until you have a matched pair for which the WTP strengthens the HTW and the HTW optimizes the WTP. If you are going to win on outspending all competitors on R&D a WTP of ‘global’ is a very good idea. If your WTP is the highest-end customers, then a HTW of extreme customization is a very good idea.
The other background to keep in mind is WA. To what extent does the potential WTP/HTW pair support the WA? If it doesn’t, then either the WA needs to shift, or the pair needs to be dropped or adjusted. Don’t waste your time honing and refining a WTP/HTW that doesn’t have an acceptable WA attached.
How-to-Win (HTW)
In some strategy processes, the company starts with How-to-Win (HTW). While it is acceptable to start with any box of the five, the key is always to keep the background boxes in mind while working on the foreground box in question. In the case of HTW, keep in mind that WTP and HTW must be a matched pair. Also, while focusing on HTW, you must consider Must-Have Capabilities (MHC) in the background. I consider MHC (and Enabling Management Systems) to be the reality check on WTP/HTW. If your HTW is not backed by MHC that competitors either can’t or won’t replicate to match your HTW, then you need to revisit your HTW (and hence WTP too).
Must-Have Capabilities (MHC)
This is interesting because resource-based view of the firm (RBV) explicitly argues that you should start with this box. What are we good at and therefore how should we formulate our strategy? The problem with RBV is that it is silent on how MHC relates to the WTP/HTW pair, which doesn’t help the foreground/background challenge.
In fact, you have to keep HTW in the background while thinking about MHC in order to avoid making a long laundry list of the many capabilities that could be construed as ‘must-have.’ Toggling back to HTW will help you narrow the list to the truly must-have ones. And bringing Enabling Management Systems (EMS) into consideration will help determine whether building and maintaining the target set of MHC is realistic — and it is only realistic if you can identify an EMS that you can put in place that would build and maintain the MHC on an ongoing basis. If it isn’t realistic, then MHC needs to change and with it, almost certainly, HTW and WTP.
Enabling Management Systems (EMS)
Finally, EMS comes to the foreground. As with MHC, the danger here is looking at it independently and making a long list of management systems, all of which are undoubtedly meritorious. And that is useless for strategy — utterly useless. The question is the management systems that need to be in place to build and maintain the MHC — because the MHC capabilities must be there for the HTW to be real, in the targeted WTP, to achieve your WA.
Practitioner Insights
When thinking about the Strategy Choice Cascade, think like a painter. The product of your work must be coherent — all five answers must fit together. If they don’t, you will expose yourself to defeat — because at least one competitor will, in due course if not tomorrow.
How to do it? Practice, practice, practice. If you think you have a plausible WTP, just ask what would that mean for WA above and HTW below? If you think you have a meritorious HTW, ask what that would mean for MHC? Can we build the necessary MHC — or not? Just practice asking about the boxes on both sides of the box on which you are working (or the one side for WA and EMS) before you lock and load on that box. Keep going back and forth across the five boxes focusing on the foreground and keeping the background in mind the entire time.
Recognize that if you must change the box on which you were working because of that consideration, it is a good thing, not a bad thing. It is not a flaw or an error. Editing is not evidence of a writing error. Editing is the process of continuous improving your writing. Similarly, finding in interesting, and perhaps non-obvious, link between the boxes is the route to strengthening your strategy. Hence it is an unalloyed good.
Through practice, get used to moving from foreground to background and back. Trust me, it makes strategy more fun while dramatically improving its effectiveness.
