Where to Play
After making the critical, high-priority what is winning choices, playing-to-win strategy focuses next on the playing field—and, specifically, where to play on that field.
Recall that what is winning zeroes in on who is or should be your best and most valuable customer, and then on what specific operating business measures will create sufficient value to sustain your business. Superior value for my preferred customer ultimately has to result in sufficient value for you and your business.
Where to play picks up right where what is winning leaves off—with who is your customer—and demands a more detailed description and more specificity about your best primary customer.
One advantage small businesses typically enjoy is that they know who their customer is by name, in more detail, with more intimacy, and often in a personal relationship that complements their business relationship. All of this can be a real competitive advantage.
The mutual trust built between customers and small business/nonprofit/independent operator can be strong enough to result in a cumulative advantage for proprietors, businesses, brands, products, and services. That’s because customers know you and have established a habit of patronage, purchase, and usage that’s become part of their routine.
Despite these inherent advantages, times like these are good ones to reevaluate where to play.
Staying with customers: Are some of your current customers unprofitable, inconsequential, or not a good strategic fit, for whatever reason? Now is a good time to focus on your best, value-creating customers.
Are there currently any fast-growing customer segments that your business, product, or service could serve that it hasn’t before? Think e-commerce, healthcare, home or personal product and service providers, for example. Now is the time to ask whether your business can fulfill rapidly rising demand in industries and sectors that have benefited from the public-health crisis.
Turning to the geography of your business and the number of locations you operate. Should all of your current business locations stay open? Should some that stay open be scaled back or down? Are there opportunities to smartly and effectively expand?
Turning to distribution channels: What are your online and social media opportunities? Pivoting some more, or even all of your business from the physical to the online world would make sense at a time like this. Customers are working remotely, individuals and families are spending more time at home, and the obvious big winners so far include e-commerce, online products and services, and social media.
Turning to product and service offerings: What changes or adjustments are needed to best match your product or service with customers who have unfulfilled needs and demands?
And while this can be a little more challenging, it can pay off significantly if there is a real opportunity:
Where in the value chain should your business be playing now? Moving up the supply chain to the supplier side or down the supply chain closer to the customer may or may not make sense, depending on business opportunity and the fit with your product or service and your organization’s capabilities and experience with customers along the chain.
Where on the changing playing field is the best fit for your business and your organization right now? What changes or pivots make sense and are worth the energy, time, and effort to explore? Finally, where should you no longer play can be a critically important question especially in turbulent times. What businesses, products, services, assets, or resources should you abandon? Where not to play choices help you make better where to play choices.
AG‘s perspective: How could you abandon more than 100 brands?
When I was called back to serve a second term as CEO and chairman of P&G in 2013, I found a company that was underperforming in a sluggish global and U.S. economy. While we had abandoned legacy packaged food and beverage products (Crisco, Duncan Hines, Folgers, and many more) in the first decade of the 21st century for strategic, competitive, and performance reasons, the company’s total sales doubled, profits tripled, and free cash flow quadrupled behind expansion and growth in household and personal-care products as well as in strategic developing markets. In 2013, it was clear that winning would require more balanced, consistent, and reliable growth and value creation. And that meant we would have to significantly narrow the playing field to product categories, brands, and countries that were structurally attractive and strategically important—where the size of the prize and odds of success made the rewards of leadership worthwhile.
We refocused the company portfolio dramatically. We sold off eight major product categories (Duracell batteries, bleach, cosmetics, fragrances, hair colorants, pet food, pharmaceutical drugs, salons) and over 100 P&G brands! This enabled the company to focus on 10 core categories in which P&G was number one or a strong number two with leadership potential, and with only about 60 brands to manage. Recent-year business results reflect the power of where not to play decisions made within the where to play focus.
About the author
A.G. Lafley is the former CEO of Procter and Gamble, who worked for decades in and with large public companies. Over the last 15 years, he has turned more of his attention, energy, and time to small businesses and nonprofit organizations. He currently serves on the boards of Omeza, Snapchat, Tulco, Hamilton College, and as the founding CEO of the Sarasota Bay Park Conservancy. A.G. is the author of two best-selling books, The Game Changer about innovation and Playing to Win about strategy, as well as numerous articles on leadership, management, and business strategy for Harvard Business Review.