A.G. Lafley - Playing to Win: How Strategy Really Works

Praise for Playing to Win

Reading Playing to Win is like having prime seats at the Super Bowl of strategy. Youll learn the strategies consumer goods powerhouse Procter & Gamble uses to get its innovative products into millions of homesplus tested methods for winning your own marketplace contests. If youre a marketer or a leader, you need to read this book.

Daniel H. Pink, author, Drive and A Whole New Mind

This is the best book on strategy I have ever read. Lafley and Martin get to the heart of whats important: how to make choices in order to control events rather than allowing events to control your choices. Everyone wants to win; this book sets down with calm authority the steps you must take to turn aspiration into reality.

Sir Terry Leahy, former CEO, Tesco

Lafley and Martin teach us how to develop and then how to deploy strategy. Their recommendations apply at every levelcorporation, business units, products, and teams. This is a great book.

Clayton M. Christensen, Kim B. Clark Professor of Business Administration, Harvard Business School; author, The Innovators Dilemma

Most authors conduct research before they write a book. Lafley and Martin went out and did something. They used their simple, subtle frameworkWhere will we play? How will we win?to double the value of one of the worlds greatest businesses. And now theyre showing you how to do the same. Read this book before your competitors find it.

Chip Heath, coauthor, Decisive: How to Make Better Choices in Life and Work

Playing to Win is a rare combination of depth of thinking and ease of use. It clearly explains what business strategy is and isnt, and how to develop it. Lafley and Martin distill their hard-won experiences and offer insights, practical hands-on tools, and tips that will inspire and allow you to think strategically in new ways about your own business.

Jrgen Vig Knudstorp, CEO, Lego Group

A great CEO and a renowned educator join forces to create a must-read for anyone thinking about strategy.

Jack Welch, former Chairman and CEO, General Electric

Here is business strategy through the eyes of the man who led Procter & Gambles stunning turnaround and success in the 2000s and the strategist who advised and worked with him. Lush with insights that show the what and the how of two master strategists.

Scott Cook, cofounder and Chairman of the Executive Committee, Intuit

Lafley and Martin have invested their respective careers in understanding the complexity of strategy. What has emerged in this seminal work is a simple and rich framework that can help business leaders think through strategic choices. It is an eminently helpful guide to choice making, which is the most essential part of leadership.

James P. Hackett, President and CEO, Steelcase Inc.

Playing to Win is an insightful do-it-yourself guide that demystifies what it takes to craft, implement, and continuously improve effective business strategies. Using relevant, real-world examples, Lafley and Martin offer proven techniques for competing and winning in todays challenging global business environment.

Jim McNerney, President, CEO, and Chairman, Boeing

I love this book; it is thought provoking and acts as a catalyst to ask questionsabout ourselves and our business life course. In a day and age when information and instant communication are relentless components of business and our lifestyle, A.G. Lafley and Roger Martin suggest we take an important pause to actually question our strategic road maps and the associated plans we need in order to succeed in this marketplace.

Thomas Tull, founder and CEO, Legendary Pictures

A.G. LAFLEY
ROGER L. MARTIN

HARVARD BUSINESS REVIEW PRESS

Boston, Massachusetts

Copyright 2013 A.G. Lafley and Roger L. Martin

All rights reserved

Printed in the United States of America

10 9 8 7 6 5 4 3 2 1

No part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording, or otherwise), without the prior permission of the publisher. Requests for permission should be directed to , or mailed to Permissions, Harvard Business School Publishing, 60 Harvard Way, Boston, Massachusetts 02163.

Library of Congress Cataloging-in-Publication Data

Lafley, A.G. (Alan G.)

Playing to win : how strategy really works / A.G. Lafley and Roger L. Martin.

p. cm.

ISBN 978-1-4221-8739-5 (alk. paper)

1. Strategic planning. 2. Success in business. 3. Organizational change. 4. Procter & Gamble Company. I. Martin, Roger L. II. Title.

HD30. 28. L34 2013

658.4012dc23

The web addresses referenced in this book were live and correct at the time of the books publication but may be subject to change.

Inspired by Peter Drucker (19092005), mentor and friend

Inspired by Peter Drucker (19092005), mentor and friend

Contents

Contents

Introduction

How Strategy Really Works

T his is a book about strategy, written by a former CEO and a business school dean. When we met, we were neither of those things. More than twenty years ago, when we first worked together on a study of P&Gs distribution channels, it was as a category manager in P&Gs laundry business and an outside consultant from a small but growing strategy firm called Monitor Company. Working on that assignment, we formed the basis of a very productive and very long friendship. By the time we became, respectively, CEO of P&G and dean of the Rotman School of Management, we were true thinking partners on strategy and worked together in earnest on the transformation of P&G between 2000 and 2009. This book is the story of that transformation and the approach to strategy that informed it. (Details on the results of the transformation may be found in .)

This approach grew out of the strategy practice at Monitor Company and subsequently became the standard process at P&G. Over the course of our careers, we worked to develop a robust framework around our strategic approach, a way to teach the concepts to others, and a methodology for bringing it to life in an organization. Within Monitor, Michael Porter, Mark Fuller, Sandi Pocharski, and Jonathan Goodman played important roles in advancing this thinking. At P&G, Tom Laco, Steve Donovan, Clayt Daley, Gil Cloyd, and dozens of other business and functional leaders (including those whose stories are told in this book) all contributed substantially to the work of sharpening the strategy of the company. Along with Michael Porter, academics Peter Drucker and Chris Argyris were seminal influences who shaped our thinking and work.

Ultimately, this is a story about choices, including the choice to create a discipline of strategic thinking and strategic practice within an organization. Though we use P&G as our main example, this doesnt mean that our approach to strategy can only be effective in a global consumer goods company. Weve seen it powerfully used in all manner of industries and all sizes of organizations, including start-ups, not-for-profits, and government agencies. But it was at P&G that we were really able to use this approach across a wide range of businesses, geographies, and functions and over a decade (and to see where it worked and didnt work)so that is the story we have chosen to tell. We will use P&G brand, category, sector, function, and company examples to illustrate the strategy concepts and tools throughout the book. Of course, not all companies look like P&G. But it is our hope that through examples from across P&Gs diverse businesses, organizations, and levels, the lessons for your organization will become clear.