This is part 4 of a series on strategy fundamentals and how the concept will evolve.
Here are the previous posts in case you missed it.
So far in this series, we’ve covered concepts that focus on strategy design which is the process of clearly defining what your organization chooses to do and what not to do. We will now move to strategy execution which is bringing that design to life.
Playing to win
The best framework I’ve seen to bridge the gap between design and execution is playing to win. Written by A.G. Lafley, former CEO of Procter & Gamble, the method forces you to spell out the choices you’ve made in your design and think about how you’ll execute on them. It’s not perfect but after having used it over a dozen times, it works. It’s simple and intuitive for anyone to grasp.
Here is a quick summary
Strategy is a coordinated and integrated set of five choices – a winning aspiration, where to play, how to win, core capabilities, and management systems – that uniquely meet a consumer’s needs, thereby creating competitive advantage and superior value for a business.
It can also be described visually
Winning aspiration is setting an ambitious north star and what you want to achieve. Setting a big hairy audacious goal might seem a bit cheesy for some but it can add drive so much value. The best and brightest want to work on hard intractable problems.
Where to play represents the set of choices that narrow the competitive field so that you can devote disproportionate resources to achieve your goal. Here, think about customers, geography, distribution and product.
You don’t have unlimited means, so this is where choices are narrowed.
To determine how to win, an organization must decide what will enable it to create unique value and sustainably deliver that value to customers in a way that is distinct from the firm’s competitors. We covered designing sustainability and competitive advantage in previous posts in greater detail.
The next two focus categories focus on execution, core capabilities and management systems. Core capabilities are the mutually reinforcing capabilities needed to successfully execute. Building out your flywheel is a good way to approach the question.
Management systems are the organizational design part of the puzzle. How you create and track objectives, how you reward people, how you hire and fire all come into play.
Once you’ve crafted your play to win, you need to start putting it into action.
Strategy vs. Operations
The biggest factor to consider when you are executing on your strategy is how much you need to improve what you are doing today VS. build new stuff & innovate for the future. It’s one hell of a blurry line that is constantly changing.
Improving your product and current operations can be a great source of value and strategic by its own right (thus the confusion).
For some organizations oftentimes that are more mature, all the low hanging fruit of their product has been captured and only incremental improvements remain. In these situations, segmenting more explicitly strategy vs. operational improvements can be super important.
I’ve written about the dichotomy between strategy and operations before and made a key point here.
This is an important question because working on strategy is always important yet rarely urgent. Leadership teams often don’t prioritize working on issues of strategic importance. This is particularly true in small to medium size organizations. Working on executing your strategy should be a big deal. If you don’t, you’re going to be stuck doing the same thing over and over again. Working on your strategy also means working towards taking your company to the next level – whatever that level is.
Execution is always context specific. At our firm, we help companies put in place agile strategic planning with our software. I won’t pretend it’s a panacea but it does work quite well for mid-market firms and high growth technology companies. My biggest suggestion is find what’s right for you. Tracking progress on a regular basis be it with OKRs or project management tools is better than nothing. Execution is about discipline and getting things done.
On the next post, we’ll conclude the series with three key items
- Aligning the team and creating feedback loops
- Scanning and monitoring the environment
- The future of strategy