Playing to Win

Product Strategy to build winning products

Playing to Win — How Strategy Really Works is a book written by A.G.Lafley (Former Chairman and CEO of Proctor and Gamble) and Roger.L.Martin (Dean, Rotman School of Management). Through this book they showed leaders of organizations of all sizes as to how they can guide everyday actions with larger strategic choices. The playbook for winning has a set of five essential strategic choices that, when addressed in an integrated way, will move you ahead of your competitors.

Though the framework defined in the book is primarily around strategy, the book at various points talks about Design Thinking, Jobs to be Done, Customer Discovery and Business Models etc… and how they played a key role in the strategy of Proctor and Gamble.

Today, we all know how frameworks and concepts like Business Models, Lean Startup, Customer Insighting and Discovery, User Centred Design, Design Thinking, Jobs to be Done, Product-Market-Price fit etc… act as key tools in the Product Managers arsenal. The book has examples, though not explicitly, on how these have been applied at Proctor and Gamble for different products and markets.

This is an attempt to understand how product strategy is approached mostly, where the gaps are and how the Playing to Win framework can be used to create a product strategy that is differentiated and defensible. We will do a deep dive on how playing to win strategy framework is used to define a product strategy.

Product Strategy Vs Product Plan

Most of the times we fall trap of thinking about Product Strategy as a plan to build certain features and capabilities. Even in cases where some thought is put into strategizing, it is restricted to using a series of analytical tools rather than a complete process for creating strategy. We often say our Product Strategy are things like:

• “To create a platform that allows you to connect and chat with friends online.”
• “To create a system to host files so that all your content is in one place .”
• “To create a web-based office suite that customers can use without having to install.”

This isn’t a strategy; this is a plan. Plans, unlike strategy do not account for uncertainty or change. We usually end up having a plan to understand customers, product design and technology, brand building, innovation, go-to-market etc… These in isolation are strong but might not be good enough to generate true competitive advantage. Product Strategy defines an integrated approach for all of them to work together and reinforce each other.

The Playbook: Five Choices, One Framework, One Process

The playing to Win playbook provides us with five choices, one framework and one process, which we can use to work on the product strategy. They define strategy as a coordinated and integrated set of five choices: a winning aspiration, where to play, how to win, core capabilities and management systems.

The five choices are aided by another tool, the strategy logic flow, a framework that will help analyse and inform the five strategy choices.

Finally, the reverse engineering process to make sense of conflicting strategic options.

Similarly, Product Strategy can be defined as strategic choices that you make to align the team, resources to achieve desirable outcomes for the customer, business and all stakeholders.

Winning Aspirations

The first question is what is the winning aspiration? It can be about delivering the most value to your customers, gaining maximum market share, achieving sustainable competitive advantage, delivering value to all the stakeholders in the ecosystem, achieving superior financial returns etc…

The winning aspiration starts with customers/ consumers rather than products. This will define what you aspire to deliver to your customers, business and stakeholders. This in turn will define what will be the vision and goals for your products.

The aspiration drives all the subsequent choices. To set aspirations properly, it is important to understand who you are winning with and against. It is therefore important to be thoughtful about the business you are in, your customers and your competitors.

Think about winning relative to competition. Think about your traditional competitors, alternatives and substitute products when setting your winning aspirations.

Where to Play

The choice of where to play defines the playing field for the product. It is a choice about where to compete and where not to compete. Understanding, this choice is crucial, because the playing field you choose is also the place where you will need to find ways to win.

The choice of where to play can be geography, consumer segment etc… These define the Go-To-Market strategies and how you position the product and communicate with your customers. The where to play choices should again start with the consumer. Who is the consumer? What does the customer want or need? To win the customer it is important to uncover unmet and unexpressed needs. All these finally help you decide on how to segment, arrive at the target group, position and go to market.

How to Win

Winning means providing a better consumer and customer value equation than your competitors do and providing it on a sustainable basis. As Mike Porter first articulated more than three decades ago, there are just two generic ways of doing so: cost leadership and differentiation.

In cost leadership, as the name suggests, profit is driven by having a lower cost structure than competitors do. The low-cost player doesn’t necessarily charge the lowest prices. The alternative to low cost is differentiation. In a successful differentiation strategy, the products are perceived to be distinctively more valuable to customers than competitive offerings.

In the differentiation strategy, different offerings have different value equations and different prices associated with them.Both cost leadership and differentiation require the pursuit of distinctiveness. You don’t get to be a cost leader by producing your product exactly as your competitors do, and you don’t’ get to be a differentiator by trying to produce a product identical to your competitor.

Cost leaders can create advantage at many different points — sourcing, design, production etc… Differentiators can create a strong price premium on brand, experience, on quality or an unique feature.

Play to your Strengths

An organization’s core capabilities are those activities that, when performed at the highest level, enable the organization to bring its where to play and how to win choices to life. Harvard University professor Michael Porter noted that powerful and sustainable competitive advantage is unlikely to arise from any one capability but rather from a set of capabilities that both fit with one another.

For Porter, a company’s “strategic position is contained in a set of tailored activities designed to deliver it.”

The capabilities can be your ability to understand customer needs, uncover unmet needs, designing solutions for these needs better than competitors, creating and building brand, innovating — new solutions, products, business models etc… designing unique experiences etc… You will have to understand how the activities together create distinctiveness under specific where to play and how to win choices.

Manage what Matters

Every company needs systems to support the building and maintenance of its core capabilities. In addition to this it is important to establish the right metrics to measure the objectives, goals and review the where to play and how to win strategic choices.

It’s an old saying that what gets measured gets done. There’s more than a little truth to this. If aspirations are to be achieved, capabilities developed, and management systems created, progress needs to be measured.

You might need to develop new capabilities to understand customers, innovation, brand building etc…It is important that these are monitored and built so that the other strategic choices of where to play, how to win are addressed.

The success of your product might be measured by customer acquisition, retention, engagement, sales growth, profit growth, customer loyalty, repeat purchase etc… It is important that these are measured and kept in line with the other strategic choices.

All the above five choices are guided by the strategy logic flow. You need to think about where to play and how to win along four dimensions. These four will provide the required insights for you to define the where to play and how to win.

1. The Industry — What is the structure of your industry and the attractiveness of its segments?

2. Customers — What do your customers and end consumers value?

3. Relative position — How does your product fare, and how could it fare, relative to the competition?

4. Competition — What will your competition do in reaction to your chosen course of action?

The Playing to Win framework should help you to define a very differentiated and defensible strategy. It should guide you to arrive at a holistic strategy and help you achieve sustainable competitive advantage.

The other tools and frameworks like Business Model Generation, Customer Insighting, Design Thinking, Jobs to be Done etc… can be used in tandem to provide insights and guide the where to play and how to win strategic choices.

Reference: Playing to Win — How Strategy Really Works — A.G,Lafley and Roger.L.Martin

https://melissaperri.com/blog/2016/07/14/what-is-good-product-strategy