Playing To Win
Still Another Year of Strategy
A Playing to Win/Practitioner Insights Year IV Retrospective
We have reached the end of Year IV for the Playing to Win/Practitioner Insights (PTW/PI) series, and I am less surprised at that then getting to the end of Years II or III. It seems that the appetite for and subjects of PTW/PI pieces are greater than I would ever had imagined when I posted my first piece in the series on October 5, 2020. That is a bit more than four years ago (thanks to year-end summaries/commentaries in between). You can find all the previous PTW/PI here.
As I did with Years I, II & III, I am providing a recap of Year IV today.
A Recap of Still Another Year of Strategy
1) Why You Should be Afraid of ‘Great Execution’
For the second straight year, I started off with the dangers of thinking about execution as distinct from strategy. As always, most disagree, but I have to keep banging away on this front.
Inspired by a Carl Jung quote on fate, this deals with how to avoid letting untested superstitions hobble your strategy.
3) The Strategic Leverage of Where-to-Play
Where-to-Play (WTP) choices are consistently underleveraged in strategy, causing competitors to converge on an industry-favored WTP choice, which in turn drives commoditization. Seeking a unique WTP is better for you and the industry.
4) Is or Is Not the Opposite Stupid on its Face
Strategy leaders need to distinguish between choices that are operating imperatives — for which the opposite is stupid on its face — and strategic choices — for which the opposite is quite sensible for some other firm(s).
There are two very different kinds of capital in America. East coast capital seeks consistent returns with low risk. West coast capital seeks high growth and accepts significant risk to get it. You need to seek the type of capital that your strategy requires.
Celebration is an underutilized business tool. Most businesses don’t celebrate nearly enough, even though celebration is a positive driver of employee happiness.
7) The Doctrine of Relentless Utility
The winningest personal strategy is to be relentlessly useful. If you are, while it will never be clear exactly what good things will happen and when they will happen, but they will happen.
8) The Magnificent Seven Stocks
While the Magnificent Seven stocks have all performed with magnificence of late, their underlying strategies have as many differences as similarities and because of that, we should anticipate considerable divergence in performance going forward.
9) Strategy & Artificial Intelligence
Large language model artificial intelligence holds the promise of advancing the world’s knowledge through the Knowledge Funnel more quickly, but it must be understood for what it is, and that is a mean-seeking device not an innovation device.
10) Investment Strategy & Artificial Intelligence
When investing in Artificial Intelligence, it is critical to understand whether the investment is in a horizontal or vertical use case because the strategic economics of the two are completely different.
11) Michael Porter’s Three Great Strategy Contributions
Newly retired seminal strategy thinker, Michael Porter, made three massive contributions. He saved the strategy academy from being left behind by strategy consultants, bolstered strategy against planning, and provoked a shift to including the customer in strategy.
12) How to Become a Strategic Chief Financial Officer
To be a Chief Financial Officer that is a helpful contributor to strategy, you must avoid insisting on proof before action and instead ensure logical rigor of strategic possibilities.
13) Good Strategy/Bad Strategy & Playing to Win
Good Strategy/Bad Strategy is a book on strategy that is very compatible with Playing to Win and a book worth reading.
14) Strategy in Highly Fragmented Industries
Don’t use that fact that you are in a currently highly fragmented industry as an excuse to play-to-play rather than play-to-win. It may work in the short term but it is very dangerous long term.
The Goal uses a novel approach — literally and figuratively — to get across arcane production concepts in a very user-friendly way, which accounts for its outsized success.
16) How to be a Good Board Member?
The key way to be a useful and effective board member is to become an intelligent and respectful dialogue partner to the CEO.
17) Where to Start with Strategy?
The best place to start on strategy is with the biggest gaps between your actual outcomes and the outcomes you wish you were producing.
If you want to achieve a corporate purpose with any sustainability, you need to make and keep a promise to your customers that is valuable, memorable, and deliverable/auditable.
19) The Business of Strategy Consulting
The business of strategy consulting has evolved to focus on selling industry expertise, which is a very mixed blessing both for the industry and its customers.
It is important to recognize that competitive surfaces can be tougher convex ones or easier concave ones, and there are different strategic imperatives to the two.
21) Strategy & Scale
Over the past 60 years, companies have scaled to an extent almost imaginable at the start of the period, and much of the scaling has been driven by the core concepts of strategy.
22) The Downside of Scaling Strategies
Companies have supported scaling through standardization, compartmentalization, and subordination, but these approaches cause employees to feel small and insignificant.
The way to deal with the human consequences of scaling, companies need to reimagine standardization, compartmentalization, and subordination to simulate smallness.
24) How Management Can Most Effectively Use Boards
To get value from boards, management needs to design jobs for them that are doable and interesting, the output of which management really wants, and for which the board is most capable of doing.
25) Strategy & Sustained Innovation
Sustained innovation will only happen when it is core to the company’s strategy, which has been the case for champagne house Laurent-Perrier for 75 years — and counting.
26) The Five Deadliest Strategy Myths
The five strategy myths are that: a list of initiatives is a strategy, it can be proven correct, analytically strong people are best at strategy, it is a zero-sum game, and it is formulated at the top and executed below.
27) Positional Goods & Strategy
Fred Hirsh coined the term positional goods to refer to goods (like Hamptons beachfront property) that are worth more because if I have it, you can’t. This has implications for for strategy.
28) A Strategic Framework for Growth
In order, the four priorities for growth are: 1) Increase market share; 2) Grow market size; 3) Shift Growth Weighting; and 4) Enter Growth Adjacencies.
Artistry is critical to great strategy and the work of Eliot Eisner is seminal to bringing artistry to strategy by utilizing qualitative research, pursuing multiple solutions, and maintaining flexible purposing.
The best place to start to try and change anything — including strategy — is to thoroughly understand why things are the way they are, and not some other way.
31) The Importance of Strategic Tension
The sad case (at least for Tennis Canada) of Alejandro Tabilo demonstrates the weakness of not having sufficient strategic tension in organizations.
There will always be a tension between the need to uphold rules but recognize exceptions when applying the rule would be damaging. It highlights the tension between reliability and validity.
33) The Best Strategy Icebreaker
The best strategy icebreaker is to use the Strategy Choice Cascade to reverse-engineer the strategy of a key competitor, which is a helpful prelude to working on your own Cascade.
The book 7 Powers is popular, especially with west coast firms and has some compatibility with Playing to Win, but some incompatibilities too.
At this point in Year IV the PTW/PI series hit the equivalent of five Playing to Win’s, which shows the value of being a reflective practitioner.
36) Strategy for Start-ups — Redux
In thinking about strategy in the context of a start-up, it is critically important to understand that there are both similarities and differences between start-ups and established companies.
37) Overcoming the Integrative Strategy Challenge
To be able to overcome the integrative strategy challenge, one has to develop the capacity to work on each individual element of the Strategy Choice Cascade in the foreground, while keeping the other four in mind in the background.
38) Personal Effectiveness Strategy
The key to personal effectiveness is to find mechanisms for amplifying and dedicating resources to the signal and dampening and ignoring the noise.
The five signs of a good CEO are: is not wildly busy; spends more time with customers than shareholders; is loved by employees; can explain company strategy in less than a minute; and recognizes business is probabilistic, not deterministic.
40) The Strategic Choice Structuring Process
This piece lays out the theory and the practice of the Strategic Choice Structuring Process, which is the process for creating a strategy using the Strategy Choice Cascade.
41) Statistical Process Control & Strategy
Combining What Would Have to be True (WWHTBT) with the long-established procedure of Statistical Process Control can help you become a theory-driven rather than superstitious strategist.
42) Parenting Styles, Management & Strategy
Business leaders need to seek to establish a parenting style for their companies that is authoritative — rather than the extremes of permissive or authoritarian.
43) The Origins of Business Strategy
Kenneth Andrew’s seminal The Concept of Corporate Strategy is a helpful starting place for exploring the origins of the field of business strategy.
44) Strategy on Rugged Landscapes
It is important for executives to understand the ruggedness of the strategy landscape on which they compete. The more rugged, the more challenging it will be to find a powerful competitive positioning — but it will be worth the effort.
It is a myth that cost leadership strategies precipitate damaging races to the bottom in industries. However, copycat cost reduction — or faux cost leadership — does drive races to the bottom.
46) Generating Strategy Possibilities
The conventional wisdom that strategic options need to be mutually exclusive & collectively exhaustive (MECE) is not helpful to generating possibilities. Instead think of possibilities as happy stories — some of which will partially overlap with others.
The launch of the new Jaguar brand is an example of what never to do to your brand. There is nothing meritorious about the launch — and lots to hate.
48) Identifiability & Segmentation Strategy
The key distinction you need to make in your segmentation strategy is not whether they are business versus consumer, but rather, whether your customers are or are not individually identifiable to you.
49) Educating Extremists (plus Addendum)
The murder of the United HealthCare CEO was not a case of despite the alleged murderer’s elite education but rather because of it. And the addendum provides supporting data on educating extremists.
50) The Danger of Locking & Loading
While the Strategy Choice Cascade may appear to be a linear sequence by which you lock & load on the first box before moving to the second and so on, it is, rather, a system for which the boxes need to be worked back and forth.
The way to become productive in work and life is to be thoughtful about assigning to others jobs that are concrete, doable, and interesting. And this is the case whether the person is a boss, an equal, or a subordinate.
52) Risk Management & Strategy
To be valuable in risk management, boards have to go beyond bureaucratic pro-forma tasks (e.g., SOX 404 compliance and citing risk factors in the MD&A) to using What Would Have to be True (WWHTBT) to surface, understand, and manage the company’s real risks.
