I have read this book recently. Its called “Playing to Win: How Strategy Really Works” by A.G. Lafley (former CEO of P&G), the man who increased Procter & Gamble market value by more than $100 billion. It’s also co-written by Roger L. Martin (Dean, Rotman school of management).
It has inspired me to understand more how we should link analytics to business strategy.
So I decided to share the most important concepts I learned in this book. As I’m more connected to the online business world, I will try to apply the book strategy concepts to the digital business.
At the beginning, What is the strategy?
Strategy is choice. Choices to do somethings and not others – and building a business around those choices.
Strategy is the answer for these five questions:
What are your aspirations (Purpose)?
To answer this question, we should write statements about the ideal future. The purpose of your enterprise/business, mission, vision and objectives.
We should be aware that too modest aspiration (goals) is far more dangerous than a too-lofty one. So you must do play to win, rather than simply to compete. The most ideal example here is Larry page’s shoot the moon concept.
Last idea here is start with consumers, rather than products. Focus on the problem that they have and you are going to solve!
Where will you play?
The heart of strategy is the answer to two fundamental questions: where will you play (this question), and how will you win there (the third question)?
You should think about which regions/cities, categories/products, channels and consumers give the company sustainable competitive advantage.
You should think where to compete, and where not to compete.
Geography: In what countries? cities will you seek to compete? so you will focus your marketing focus on these areas.
Product type: what kind of products and services will you offer?
Customer segments: what group of customers you will target? gender? ages? industry? interests, etc. this should help you design more relevant ads, content, etc.
Distribution channel: How will you reach your customers? what channels will you use?
Mobile? Game? what type of game? app? what is the best app? website? Marketing channels?
Its important to know that choosing where to play is choosing not to play.
How will you win? The competitive advantages.
What is your competitive advantage? What will enable you to create unique value and sustainably deliver this value to customers in a way that is distinct from the competitors. For example: How is your site speed compare to your competitors? how checkout is easy compared to your competitors? how is your positions on search engines compared to your competitors? How is your online reputation compared to your competitors? etc.
All successful strategies take one of these two approaches, cost leadership or differentiation. – How to win choices determine what you will do on that playing field. For example, Apple is taking the differentiation concept while Dell used the cost leadership by selling directly to the consumers.
What capabilities must be in place?
Now, you have a big mission, goals and you know where you want to play (focus) and you have discovered the competitive advantage that you want to use. The question now is what are the capabilities (Qualities, skills and activities) that you need to win? Do you have them? if not, how to get them?
What are the capabilities that you need to gain to win? For example, if you decided to differentiate your website as the most easy checkout process among your competitors. Do you have the developer team that can develop that?
An organization’s core capabilities are those activities that, when performed at the highest level, enable the organization to bring its where-to-win choices to life.
Note: As Lafley mentioned, These steps are iterative. In other words, you may be at question 3, then update your answers at question 2 and so on.
Manage what matters?
Here is the role of analytics in the business strategy. To measure the performance of your choices. As the popular management quote says: “you can’t manage what you can’t measure!”
Without measurement to your strategy choices, strategy remains a wish list.
Avinash’s Digital Marketing and Measurement Model will be so helpful here. It helps design the measurement framework to measure your digital strategy performance.
Finally, How these concepts can help digital analysts?
1- It should lead to a better communication between analysts and managers/business owners.
2- It should help analysts identify the most important KPIs, the KPIs that describe company strategy.
3- It should help analysts to visualize KPIs that matters! and answer strategic questions.
4- It should help analysts analyzing data better I.e. You will know exactly what segments you need to create!
5- .. hmm what do you think more 🙂 ?