As described by AG Lafley and Roger Martin in their book “Playing to Win: How Strategy Really Works”, strategy has two major components: “Where to play?” and “How to win?”.
The answers to “Where to play?” are discretionary decisions by leaders in an organisation. Of course, such decisions should be informed by insights and the competitive landscape. But customers are already fulfilling their needs one way or another. So at the time of any strategic decision customers won’t know what they are missing out on. So yes, leader validation is the right way to define “Where to play”. Opening new markets. New segments. New opportunities. If Apple decides to enter the car market, it is Tim Cook’s decision.
But when it comes to “How to win?”, customers need to be at the core. Customers decide the success of a company through their actions. Their preferences. Their voices.
Many leaders do not make a distinction between these two aspects of strategy. Leader validation is also the default mode for “How to win”. Sounds familiar? “Management has decided to launch this product”. “My boss always knows better”.
It’s no surprise. Leaders often deem these decisions necessary to justify their salary. I earn my money, so I need to know. This, more often than not, leads to decisions lacking the desired customer impact. Flops. Sometimes Megaflops.
An adaptive strategy aims to shift leaders’ mindsets. Making customer validation the prevailing MO for “How to win”. Typically through hypothesis-based experimentation before spending the big bucks. Not everything will work out as expected. Major external forces can derail the marketplace so strategy needs to be adaptive. Making the customer the centre of the how is the best way to adapt and deliver success.
Today, leaders need to be aware of the strategy component they focus on or influence. This can sometimes get blurry. When they know, they need to apply the right set of behaviours. Providing answers in “where to play”, but questions in “how to win”. Questions about real customer needs or problems. Questions to their teams for ideas, solutions, metrics and (customer) evidence. Questions about the customer journey. And only if they gain enough evidence of how to win should the investment decision conclude.
This is very hard to do well. Avoiding the reflex of giving the “solutions” requires high self-discipline and empathy. But it is possible to learn.
And that’s how we can help you.