Playing to win: How strategy really works

by A.G. Lafley

The objective in this step is to be inclusive rather than restrictive of the number and diversity of possibilities on the table. Here is the opportunity to encourage creative and more-unexpected strategies. In this context, a possibility should be expressed as a narrative or scenario, a happy story that describes a positive outcome. That is why we like to call them possibilities rather than options. Characterizing the possibilities as stories helps ensure that they are not seen negatively as unsubstantiated opinions. No one is yet arguing for a possibility; you and your colleagues are simply envisioning a world in which that story makes good sense.

Once a diverse set of possibilities is established, the team then needs to reverse engineer the logic of each possibility. That is, it needs to specify what must be true for the possibility to be a terrific choice. Notice, this step is decidedly not for arguing about what is true, but rather for laying out the logic of what would have to be true for the group to collectively commit to a choice.

Rather than a blanket denunciation of a possibility, skeptics in the reverse-engineering process must specify the exact source of their skepticism. This frame helps the possibility’s proponents understand the reservations and creates a standard of proof to address them.

Reservations are important and must be taken into consideration, but only in the form of conditions that would have to be true (and not as explicit criticism of the validity of the possibility).

It is important that every individual’s conditions are given equal consideration, to ensure that no one fails to engage, out of fear or embarrassment. But it is equally important that options are reverse engineered by the group, not the individual who first suggested the possibility. There is no ownership of possibilities by individuals, lest the process derail. To help separate individuals from ideas, you could have an outside facilitator to guide the team through the process, drawing out contributions from quieter voices and attempting to capture all possibilities.

Now, and only now, you can cast a critical eye on the conditions your team has identified. The task is to assess which of the conditions your team believes are the least likely to hold true. In other words, now that you’ve specified what would have to be true for this possibility to be a great idea, which of those conditions worry the team the most and seem the least likely to be true? These conditions constitute the barriers that keep you and the team from choosing that possibility. Until you know if they are true or not, you can’t move ahead.

The reverse-engineering process, by contrast, makes sure that individuals with concerns feel heard and actually are heard.

Simply put, first test the things you’re most dubious about. Take the condition the team feels is the least likely to hold up, and test it first. If the team’s suspicion is right, that possibility will be eliminated without the need to test any of the other conditions. The possibility has already failed an essential test, so no more tests are necessary. If, on the other hand, the possibility passes the first test, move on to the condition with the next-lowest confidence level, and so on. Since testing is often the most expensive and time-consuming part of the choice process, this approach can save enormous amounts of resources, reducing the number of tests that must be performed in total, as possibilities fall away after just one or two tests.

In this reverse-engineering process, on the other hand, the choice-making step becomes simple and even anticlimactic. The team needs only to review the test results and make the choice dictated by the pattern of results. In essence, the choice makes itself; there is no need for serious debate at this late juncture. So it was with Olay; the masstige option became the clear and obvious choice.

First, frame a choice. Second, explore possibilities to broaden the set of mutually exclusive possibilities. Third, for each possibility, ask, what would have to be true for this to be a great idea, using the logic flow framework to structure your thinking. Fourth, determine which of the conditions is the least likely to actually hold true. Fifth, design tests against those crucial barriers to choice. Six, conduct tests. Finally, in light of the outcome of the tests and how those outcomes stack up against predetermined standards of proof, select the best strategic choice possibility. This process broadens the possibilities up front and then systematically narrows the field. It leverages different perspectives to enrich the discussion, rather than bogging it down.

Do encourage skeptics to express concerns at the specify-barriers stage; have them articulate the precise nature of their concerns about specific conditions.

Don’t have proponents of a given possibility set and perform the tests; ask the skeptics to do it. If the skeptics are satisfied in the end, everyone else will be too.

At an impasse, an idea popped into my head. Rather than have them talk about what they thought was true about the various options, I would ask them to specify what would have to be true for the option on the table to be a fantastic choice. The result was magical. Clashing views turned into collaboration to really understand the logic of the options. Rather than having people attempt to convince others of the merits of options, the options themselves did the convincing (or failed to do so). In this moment, the best role of the consultant became clear to me: don’t attempt to convince clients which choice is best; run a process that enables them to convince themselves.

For your own company, ask (and honestly answer): Have you defined winning, and are you crystal clear about your winning aspiration? Have you decided where you can play to win (and just as decisively where you will not play)? Have you determined how, specifically, you will win where you choose to play? Have you pinpointed and built your core capabilities in such a way that they enable your where-to-play and how-to-win choices? Do your management systems and key measures support your other four strategic choices?

Remember, to create real value, you have to choose to serve some constituents really well and not worry about the others.

Even if the product in an industry is a commodity (e.g., uncoated free sheet), the offering of a firm in that industry need not be undifferentiated. The firm could differentiate its offering by providing better customer service, more consistent delivery, better integration with the downstream buyer’s operations, and so