Where to play, and ensuring that you win

Background

This piece stemmed from an interesting discussion that I had with an investor of the start-up that I was working with. We had been hit hard by the pandemic, the entire industry was in disarray, we had almost run out of runway, and our shoulders were drooping. We had to “reinvent” ourselves and the business.

It was the investor who suggested that we need to figure where do we play, and what do we need to do to ensure that we win – and therefore, I decided to steal his words for the title of this article. I loved it because it is so direct – so in your face, something that you cannot run away from. Much later, I figured that the idea was based on a book by A.G. Lafley & Roger L. Martin.

Questions each business needs to ask itself:

(a) What is our objective? The objective has to necessarily include “winning” – you are not here to get a “participation certificate” right? But equally there is need to answer what does “winning” mean? This has to sharp, crisp and to the point – cannot be “woozy” or “global”

(b) Where do we play such that we win? Which markets, customer segments, channels etc.

(c) How do we win where we choose to play? How does the business meet its objective, or what is the game plan?

(d) What does the business need to do to win where it chooses to play? In terms of capability

(e) How can a business make winning a habit? What systems are needed to be put in place to ensure that the company continues to have the capability to win, where it chooses to play (in the manner “winning" is defined). This also means amongst others, the ability to evaluate opportunities; communicate and articulate thoughts and ideas, measure successes of our thought and action; and lessons learnt – essentially the “winning playbook”.

When answering these “nestled” questions, one has to ensure that they consistent with each other and reinforce one another. However, it is unlikely that anyone gets these right the first time, and therefore, the discussion requires multiple iterations.

Back to the questions.

1.???Objective

The objectives have to be defined clearly – what does the business really want to do, what does it stand for? All of the business’ choices and actions must emanate from the objective.

And built into the objective must be to win, and not playing to play. This requires thinking about what does it mean to win with customers? And who should it be winning against?

Playing to win has to become a part of the organisational mindset – if one does not set out to win, you probably never will. This requires making hard choices, letting go of opportunities, and making investments required for success.

2.???Where to play?

One cannot play every game and you cannot play on every possible playing field. It is therefore essential to decide how do target our energies and attention: we need to figure where do we want to play and where will we not play? Failure to choose results in scattered focus (or to put it another way, if everything is a focus area, nothing really is) and ineffective allocation of resources.

Further, as we are playing to win, we must decide the game and the field based on our “strengths” or “capabilities” and our relative position with respect to competition.

That being said, in order to determine “where to play”, we need to think of the following:

(a) Lay of the land: What and/or is there “new” reality? What does the customer want? Is consumer behaviour evolving? If so, how and what? Where is it going? Is it permanent or temporary?

(b)?Our relative strengths: Are we geared to access the opportunity?

(c) What should be our customer proposition: What do we wish to sell? In which segments of the industry? For whom? Under what conditions? Why should the (target) consumer buy us over others? Also, where do we not want to play?

(d) What should our offering look like? What should be the pricing & quantity?

3.???Ensuring that we win

Essentially, there is only 1 way: be distinct. However, there are two ways of doing this (a la Michael Porter):

Cost Leadership: Cost leadership does not necessarily mean that our offering is cheaper than others. However, it does mean that we are able to get our product to the consumer at a lower cost than competition. For example, if both the company and the competition sell similar products for INR 10, and our end-to-end cost of product to the consumer is INR 4, while the competition is at INR 5 – we become the cost leader, as we are able to plough the additional margin back into the business.

Differentiation: What can we do better than the competitors? What can we offer our customers that satisfy their needs in ways that our competitors do not? How will we ensure that our offering is special and distinctive?

It is often tempting to say, “Let’s do both”. However, it is very difficult pursue both strategies, as in each strategy, the focus is necessarily different. In a cost leadership strategy, the focus is on understanding what drives costs and modifications of operations accordingly. In a differentiation strategy, there is need to understand consumers in order to offer them something special – and that distinctiveness comes at a cost. Therefore, we have to choose.

4.???What is needed to win?

The capabilities that a business needs to execute what it wants to do necessarily flows from its choices about where to play and how to win there. And honestly, without the right capabilities, any plan is only academic.

And since, one can only win by being “distinct” (no matter what strategy you choose), the business’ capabilities too have to be distinct from others. While we may look at what others have done and try learn from them, each business will necessarily will have to chart its own direction.

While capabilities often stem from competencies, they are different – competencies are “historical”, while capabilities are specific to the “present” and the “future”, and if utilised well may lead to a win. However, competitive advantages rarely arise from any one capability, but from a set of capabilities that reinforce one another. These may include understanding consumers, innovation, branding and marketing, channel relationships, distribution network, manufacturing, etc.

5.???How to make winning a habit?

This will have to start with mindset, how individuals in the team share and discuss ideas, ask questions, and how do they work as a team. And of course, have a framework to ensure that the best ideas always win and ensure alignment of all key stakeholders.

Further, there is need to measure everything that is done and learn from the successes and failures, and change to be “tomorrow” ready.