How Strategy Really Works is a book about strategy, written by A.G. Lafley, former CEO of Procter & Gamble, and Roger Martin, dean of the Rotman School of Management. The book covers the “transformation” of P&G under Lafley and the approach to strategy that informed it.
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. … Ultimately, this is a story about choices, including the choice to create a discipline of strategic thinking and strategic practice within an organization.
What is Strategy?
Really, strategy is about making specific choices to win in the marketplace. According to Mike Porter, author of Competitive Strategy, perhaps the most widely respected book on strategy ever written, a firm creates a sustainable competitive advantage over its rivals by “deliberately choosing a different set of activities to deliver unique value.” Strategy therefore requires making explicit choices— to do some things and not others— and building a business around those choices. In short, strategy is choice. More specifically, strategy is an integrated set of choices that uniquely positions the firm in its industry so as to create sustainable advantage and superior value relative to the competition.
Too often CEO’s allow the urgent to cloud out the important. “When an organizational bias for action drives doing, often thinking falls by the wayside.”
Rather than develop strategies, many leaders tend to approach strategy in one of the following ineffective ways:
- they define strategy as a vision;
- they define strategy as a plan;
- they deny that long-term strategy is possible;
- they define strategy as the optimization of the status quo; and
- they define strategy as following best practices.
“These ineffective approaches,” Lafley and Martin argue, “are driven by a misconception of what strategy really is and a reluctance to make truly hard choices.”
While everyone wants to keep options open as long as possible, only making and acting on choices allow you “to win.” Great organization choose to win — tough choices force your hand but, if you let them, they also focus your organization.