Wednesday, April 6, 2016

Playing to Win

Both The Coherence Premium and Seven Ways to Fail Big reminded me of A.G. Lafley’s “Playing to Win”--a book recounting P&G’s strategy during Lafley’s tenure as CEO. This book significantly reinforces most of the principles noted in both readings.

In The Coherence Premium, for example, the authors propose “a system of mutually reinforcing capabilities...that support the company’s strategic purposes” (Carroll & Mui, 2010, p. 3). Lafley mirrors this logic in a chapter titled “Playing to Your Strengths,” noting that “powerful and sustainable competitive advantage is unlikely to arise from any one capability (e.g., having the best sales force in the industry or the best technology in the industry), but rather from a set of capabilities that both fit with one another (i.e., that don’t conflict with one another) and actually reinforce one another (i.e., that make each other stronger than they would be)” (Lafley & Martin, 2013, p. 112). Lafley ultimately describes P&G’s core capabilities as (i) consumer understanding, (ii) brand building, (iii) innovation, (iv) go-to-market ability, and (v) global scale.

Seven Ways to Fail Big then covered the dangers of acquisitions (among other issues). Notably, companies mistake opposing strengths for complementary strengths or completely disregard other strategic considerations when joining forces with another firm (Carroll & Mui, 2008, p. 2-3). In this context, Lafley notes P&G’s three criteria for acquisitions:
First: “Any acquisition had to be ‘growth accretive--in a market that was growing (and likely to continue growing) faster than the average in its space and in a category or segment, geography, or channel where we thought that we could grow as fast as the market, if not faster’” (Lafley & Martin, 2013, p. 106).

Second: “The acquisition had to be structurally attractive--a business ‘that tended to have gross operating margins above the industry or company average’” (Lafley & Martin, 2013, p. 106).

Third: “Once those two hurdles were cleared, there was a final criterion--one that too few companies consider systematically: how the potential acquisition would fit with the company’s strategy--its winning aspiration, its choices of where to play and how to win, its capabilities, and its management systems” (Lafley & Martin, 2013, p. 106).

This final criterion seems particularly relevant in reference to the reading. Not only did P&G assess how the potential acquisition would fit its capabilities, it also considered its choices of where to play and how to win and its management systems. A similar breadth of analysis likely would have helped prevent some of the missteps noted in Seven Ways to Fail Big.


Carroll, P.B., & Mui, C. (2008). Seven Ways to Fail Big. Harvard Business School Publishing.

Lafley, A.G., & Martin, R. (2013). Playing to Win: How Strategy Really Works. Harvard Business School Publishing: Boston, MA.

Leinwand, P., & Mainardi, C. (2010). The Coherence Premium. Harvard Business School Publishing.

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