Michael Goitein

Cascade photo by Diana Dorčáková: https://www.pexels.com/photo/landscape-photography-of-water-falls-1262803/

A global strategy expert’s simple but effective approach to designing winning strategies

In Part I of this series, we met Roger L. Martin, became familiar with his long and successful career in strategy, and introduced the “Playing to Win” framework.

In Part II, we learned about and stepped through the Strategy Process Map, a 7-step approach combining the strengths of Design Thinking with the rigor of scientific hypothesis and testing.

Now, in Part III, we’ll dig into the crux of winning strategy formulation — stepping through the five choices that make up the Strategy Choice Cascade.

How the Strategy Choice Cascade is Different

How do strategy experts actually formulate strategy?

What kinds of questions do they ask when creating their strategies?

Interestingly, the process tends to diverge into some flavor of either a “One Idea” strategy, or a massive data gathering and synthesis exercise resulting in hundreds of pages of “strategic plans” patterned on pre-made “playbooks.”

Let’s look at each.

The “One Idea” Strategy

The “One Idea” approach is typically based on something that seems to be a “can’t miss,” genius idea.

While the history of business is littered with any number of failed startups, a recent notable example was the short-form streaming service “Quibi.” Touted as the “future of streaming content,” Quibi was the brainchild of former Disney exec and Dreamworks SKG co-founder Jeffrey Katzenberg and former HP CEO Meg Whitman.

Quibit promised to “revolutionize” short-form subscription video tailored to the mobile form factor for short-form video “on the go.”

“It’s unbelievable how many hours we all spend watching great TV content today and, separately, how much time we are consuming short-form content… so why can’t those two worlds come together in what is a new creative and business alignment?”

Jeffrey Katzenberg, Founder, Managing Partner at WndrCo, LLC

The creative part involved some interesting tech and a host of top talent, but the business viability part rapidly faltered. Within a week of launch, Quibi dropped out of the top 100 apps, and after raising nearly a billion dollars, announced plans to shut down completely within six months of launch.

COVID-19 or a Lack of Strategy?

While Katzenberg blamed the failure completely on the COVID-19 pandemic, conventional pundits converged on some variation of the classic “great strategy, bad execution” judgment for the collapse.

I’m not sure how many thousands of slides in pitch decks and business plans were ultimately produced in the years leading up to Quibi’s launch, but I would propose that the miss may have been more due to a lack of thinking through the few but crucial dimensions necessary to design a winning strategy in the first place.

And this is exactly what the Strategy Choice Cascade can help with.

But there’s another approach to strategy formulation that happens every day, in business and board rooms around the world that’s not only far more common, it’s even less helpful.

Analysis, Planning & Playbooks Posing as Strategy

Favored by global strategy consultancies, lengthy research and massive data-gathering exercises form the cornerstone of this approach.

Once the data is analyzed, encyclopedic PowerPoint presentations and slick reports are assembled that are full of very likely highly intelligent, if obvious, conclusions intermingled with budgets and Gantt charts, copied and pasted directly from one of the strategy consultancy’s pre-existing “playbooks.” (I’ve heard non-anecdotal evidence of two totally different organizations in two different industries on separate continents receiving the exact same strategic plan from the same consultancy.)

Bringing this full circle, it’s possible these hundreds of pages of data and analysis were created to sell the “brilliance” of what’s ultimately a “One Idea” strategy, through picking the data to assemble some “non-stupid”-sounding choices to support a pre-chosen strategic “playbook” plan template.

What could go wrong with that?

What makes the Strategy Choice Cascade Unique

According to Roger L. Martin, AG Lafley, and Jennier Riel, strategy isn’t Analysis or Planning, but a set of choices:

strategy is an integrated set of choices that uniquely positions the firm in its industry so as to create sustainable advantage and superior value relative to the competition.

Lafley, A.G.; Martin, Roger L.. Playing to Win (p. 11). Harvard Business Review Press. Kindle Edition.

The Strategy Choice Cascade provides a systematic framework for eliciting the right set of choices in an intentional order to unlock the elusive but crucial “integrated set” that form the foundation of winning strategies.

By stepping progressively through the Strategic Choice Cascade, teams engaged in strategy creation can not only come up with new strategic possibilities, but even submit their current strategy to an in-depth understanding, and put them all on the same level playing field.

Real-World Strategy Success

Grounded in Design Thinking, and honed over years of practice and reflection across many industries, the Strategy Choice Cascade directly contributed to the success of many products you know and use every day, and the company that innovated them — Procter & Gamble.

Many of the examples of effectively using and iterating through the Strategy Choice Cascade framework are outlined in A.G. Lafley & Roger Martin’s book, “Playing to Win.”

These strategies, together with Lafley’s executive leadership and Martin’s strategy consulting partnership, led directly to doubling P&G’s sales, quadrupling their profits, and increasing their market value by $100 billion to emerge as the dominant global consumer goods brand leader.

And it really does boil down to just five choices.

The 5 Choices of the Strategy Choice Cascade (“SCC”)

1. What is your Winning Aspiration?
2. Where to Play?
3. How to Win?
4. What Must-Have Capabilities will you need to be in place?
5. What are our Enabling Management systems?

We’ll go through each below, and use one of my favorite products, the OŪRA ring, as an example for each.

(Note that I don’t know anyone at OŪRA, and am mostly making my best assumptions, using the Strategy Choice Cascade to capture existing publicly-available or inferred information, together with my own familiarity with the product.)

Choice #1 — Winning Aspiration (“WA”)

Many organizations start with a “Mission” (the organization’s “reason for being”), followed by a “Vision” (a word picture of how the world will be different in the future once the Mission has succeeded).

For Roger Martin, these are interesting but ultimately useless fluff.

You can’t figure out a strategy unless you can clearly state what Winning looks like, and most especially, what winning looks like for your context and your organization.

OŪRA Ring Example for Choice #1 — Winning Aspiration (“WA”)

Be the activity and sleep tracking wearable device of choice for affluent young professionals.

Choice #2 — Where to Play? (“WTP”)

Once we have a clear picture of our destination, we can now start to identify our playing field.

We break this down into the different mental or physical constructs that would create different ways to identify the playing field –

1. Geography — What area or region will you focus on?
2. Customer — Which customers or Personas will you provide compelling value?
3. Channel — Through what ways will you reach your target customers or Personas?
4. Offer — What is the service or Product you’ll be selling in a differentiated way?
5. Stages of Production — Have you thought through what you’ll do yourself, end-to-end, and what you’ll handle with other partners, contractors, suppliers?

Thoughtfully working through each of these areas in your “WTP,” and how they directly relate to your “HTW” choices will radically focus your team and your offering.

OŪRA Ring Example for Choice #2 — Where to Play? (“WTP”)

1. Geography — Global sales
2. Customer — Young, affluent weekend and top-flight athletes, skewing slightly towards female Personas
3. Channel — Sell direct to consumers through ouraring.com
4. Offer — Offer a discrete, beautifully-designed ring & polished companion mobile phone app that rapidly pairs with the ring. Easy charging, good battery life.
5. Stages of Production — Handle everything, end-to-end — Ring design, Hardware Manufacture, Marketing, Sales, and Support

Choice #3 — How to Win? (“HTW”)

Now that we know “Where to Play,” it’s time to focus on how we believe we can Win in these markets, and with these customers (HTW).

The focus at this point is to understand how you will position your offering against competitors in your playing field, and for that, there are only two real ways to win — either offer a lower-cost alternative in a way that you can afford and make a profit with, or, alternatively, differentiate through a new and better offering.

The goal will be to choose a clear winning value proposition that fits well together with your “Where to Play” choices.

When strategy teams put more effort into the heart of their strategy, clearly defining well-matched sets of Where to Play & How to Win choices, that alone would radically reduce risk and put them ahead of the competition.

While the Quibi team might have thought through several of these choices, it’s possible they might not have identified them all in terms of matched sets of choices.

OŪRA Ring Example for Choice #3 — How to Win? (“HTW”)

Sleep-clinic-level sleep tracking and activity tracking with seamlessly integrated hardware and software in a discreet wearable. Offers continuous firmware upgrades. Crunches tons of sleep, activity, and heart rate data into two actionable numbers:

1. Readiness Score — How ready are you to “seize the day?” What can take on? What can you do to take it easy when necessary, and be more active when you can?
2. Sleep Score — How well did you sleep?

We’re not done with our strategy choices yet

Many organizations make it to Choice #3 and stop, saying the work of strategy creation is complete.

But Martin intentionally adds two more crucial choices as part of the matched set. It’s unlikely any organization can effectively “activate” their strategy until they can answer the Strategy Choice Cascade’s final two questions:

Can the organization actually do what’s necessary to win, and do they have a way to manage it, going forward?

Choice #4 — Must-Have Capabilities (“MHC”)

With Must-Have Capabilities, we’re being asked to clearly understand which of our organization’s strengths will result in activities that will allow us to deliver our “How to Win” on our chosen “Where to Play” playing field.

What do we do better in this area, or what do we do well enough that we can improve that will allow us to win? Important here is to take a realistic assessment and differentiate between the organizational capabilities that allow us to “play” in this area, vs. those that can allow us to actually compete at a high level and win.

OŪRA Ring Example for Choice #4 — Must-Have Capabilities (“MHC”)

• Design and manufacture distinctive, elegant ring hardware
• Write and continuously update ring firmware
• Design, create, and continuously update ring apps across Android and iOS
• Effectively manage terabytes of customer data safely and privately
• Rapidly analyze nightly ring sleep data to provide unique customer Sleep and Readiness scores through the mobile app
• Continuously improve functionality, sleep, and activity tracking and battery life
• Roll out new features

These may be great capabilities, but are they distinctive, and can they be continuously improved over time? This is where Choice #5 comes in.

Choice #5 — Enabling Management Systems (“EMS”)

Having established all four choices, we now need to apply management rigor to maintain the ability to follow through and deliver on our strategy choices.

“A company needs management systems that build and maintain the distinctive capabilities that underpin a unique how to win in the chosen where to play that meets its winning aspiration.“

Roger L. Martin, The Role of Management Systems in Strategy

Enabling Management Systems encourage us to think through the pieces of our business that can provide consistency, management, oversight, and allow us to continuously deliver on our distinctive choices.

Done effectively, Enabling Management Systems not only keep us on track, but allow us to improve our Must-Have Capabilities over time, as well as continue to revisit our entire Strategy Choice Cascade again to either iterate elements to stay on-course, or design an entirely new set of choices as conditions change.

OŪRA Ring Example for Choice #5 — Enabling Management Systems (“EMS”)

• Ring hardware design team
• Ring hardware manufacturing capabilities
• Ring firmware design and updates team
• Mobile app design, development, and continuous update teams
• Overarching Product Management expertise to turn client pain points and opportunities into future roadmap items to boost Retention and repeat sales
• Big Data and Insights, Analytics
• Sales, Customer Success, Marketing

The focus on management systems allows companies to identify and support those areas of their business most crucial to delivering their winning strategy.

Cascading the choices to work together

I feel it’s important to highlight two subtle but important things Roger Martin brings forward in his Strategy Choice Cascade illustrations:

1. Note how the pieces lock together like puzzle pieces. I believe this is an intentional choice to demonstrate that the choices have to be chosen together, and designed to work together. In direct opposition to a SWOT analytical exercise, all Choice 1 questions wouldn’t be answered for all strategic potential possibilities, followed by Choice 2, etc..
2. Note also that it’s not just downward arrows, but there are also dotted upward arrows leading back up the chain. Roger Martin specifically encourages strategy practitioners to continuously “Toggle back and forth among the five boxes,” and not think about it as a deterministic, one-way exercise.

Both of these points help maximize the value of the choices, and their ability to work together to create a great strategy.

Connecting the Map and The Choices

Now that we have reviewed the seven steps of the Strategy Process Map, and are able to use the Strategy Choice Cascade to make our choices, let’s review how the two work together.

Cascading across the Strategy Process Map

One of the strengths of the “Playing to Win” framework is the increasing strategic clarity teams create going through the Strategy Choice Cascade at three points during the Strategy Process Map journey, each with a distinctive purpose in the flow:

At Step #1, “Identify the Problem,” only by running our existing Strategy through the Strategy Choice Cascade can we begin to identify what might not be working as intended. This will allow us to to identify the main customer-centric Problem against which we can frame our “How Might We” strategic question.

At Step #3, “Generate Possibilities,” after Diverging on multiple sets of Strategic Possibilities, we start to bring in rigor by Converging, running each of those Possibilities through the Strategic Choice Cascade.

And finally, at Step #7, “Choose,” we run the chosen set of Strategic Possibilities through the Strategic Choice Cascade to help us clarify our future strategy.

The dotted arrow that ties Step #7 back to Step #1 is also not accidental — it illustrates the continuous, iterative nature of the framework.

While we’re comfortable our chosen strategy is the best set of choices for now, we remain open to going back through the process as conditions change.

Summary & Takeaways

While the Strategy Choice Cascade is simple, it’s far from easy.

Through understanding and systematically answering each of the five cascade prompts with your team, it provides a deceptively powerful way to create the integrated set of strategic choices that will increase your odds of a winning future.

Regardless whether your playing field is global consumer goods, world tennis, entertainment, or your own career, the “Playing to Win” framework has a proven track record of results that can demystify, simplify, and make winning strategies within anyone’s grasp.

This is Part III in a series.

The first article introduced the “Playing to Win” strategy framework.

In Part II, we reviewed the “Strategy Process Map,” using Design Thinking and Divergent and Convergent to create winning strategies.

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References

Quibi calls it quits: Key takeaways from a lesson in how not to build a streaming brand

https://www.marketingdive.com/news/quibi-calls-it-quits-key-takeaways-from-a-lesson-in-how-not-to-build-a-str/587550/

Strategic Choices Need to Be Made Simultaneously, Not Sequentially

Roger L. Martin on HBR
https://hbr.org/2017/04/strategic-choices-need-to-be-made-simultaneously-not-sequentially

On the Inseparability of Where-to-Play and How-to-Win

Roger L. Martin on Medium
https://rogermartin.medium.com/on-the-inseparability-of-where-to-play-and-how-to-win-181c2ea5c463

The Role of Management Systems in Strategy

Roger L. Martin on Medium
https://rogermartin.medium.com/the-role-of-management-systems-in-strategy-571583546fbe

Strategic Choice Chartering

Roger L. Martin on Medium
https://medium.com/@rogermartin/strategic-choice-chartering-3d56d8962ec3

Decoding the Strategy Choice Cascade

Roger L. Martin on Medium
https://rogermartin.medium.com/decoding-the-strategy-choice-cascade-475d40555eb1

A Cascade of Choices

AG Lafley on Medium
https://medium.com/@leadingtowin/a-cascade-of-choices-718852795536

The IDEO U Designing Strategy Course

I highly recommend the IDEO U Designing Strategy course, where you can learn the “Playing to Win” framework in an online, cohort-based course. The IDEO U faculty does an amazing job facilitating, and the material and most of the video lectures are personally led by Roger L. Martin and Jennier Riel.

It’s an excellent course, and not only takes you, step-by-step, through the entire “Playing to Win” strategy framework, it allows you to go in-depth on key aspects of the Strategy Process Map and Strategy Choice Cascade.

More info on the course

Designing Strategy Course Overview

How to Create Winning Strategies — blog post & podcast with Roger Martin

Strategic Planning: How to Get Started — blog post & podcast with Roger Martin & Jennifer Riel