Companies With Successful Business Strategies

This article is an excerpt from the Shortform book guide to "Playing To Win" by AG Lafley. Shortform has the world's best summaries and analyses of books you should be reading.

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What is the Strategic Choice Cascade strategy from Playing to Win? Why do companies struggle to employ this strategy in practice?

In Playing to Win, the cascade strategy involves answering five questions, each leading to the next like a cascading waterfall. If used properly, the cascade strategy can help your business succeed. However, there are many misconceptions about this strategy that prevent businesses from adopting it.

Keep reading to learn about Lafley and Martin’s Cascade Strategy, how it works, and some common misconceptions around it.

The Cascade Strategy

In Playing to Win, Lafley and Martin outline their concept of a “good” strategy that involves making winning choices—the Strategic Choice Cascade: an action plan for success in business. 

The authors’ Playing to Win cascade strategy entails answering five questions:

  1. What is your business’s vision and purpose, or your “winning aspiration”?
  2. What are your target markets?
  3. How do you succeed in those markets? 
  4. What capabilities does your company need in order to “win,” or achieve its purpose?
  5. How should you manage your company in order to achieve its purpose?

Starting at the highest level, each question informs the next (hence the waterfall analogy) while also helping to refine the answers to the previous questions. As you work through the cascade and gain new insights, you’ll revisit and refine your answers to previous questions.

Keep Your Answers Concise

While these five questions form the foundation of Lafley and Martin’s Strategic Choice Cascade strategy, it’s important not to get bogged down in pursuing too many different answers to them. Pursuing too many options, or options that work against each other, is a common reason many business strategies fail. Instead, make only a few specific choices that, taken together, form a clear and cohesive strategy to reach your goal.  

The authors add that, in large companies, many individual choices and broader strategies function at once and in conversation with one another. For example, one employee’s strategy could play into a brand strategy, which in turn connects with a larger sector strategy, which forms part of the overarching company strategy. Each strategy flows together to form a cohesive strategy that determines the overall success of the company—the authors call this a “nested cascade,” a waterfall made up of smaller waterfalls.

(Shortform note: In his business guide Good Strategy/Bad Strategy, Richard Rumelt asserts that simply having a strategy gives you an advantage over many other companies, who operate reactively or with only vague long-term goals. In other words, no matter what your specific strategy is, having a clear set of goals and guidelines puts you in a stronger position by default than many of your competitors.)

Misconceptions About Strategy

Lafley and Martin believe that businesses often struggle with strategy because they misunderstand what it is. They describe several common misconceptions:

1. Strategy is just a vision. Vision statements are good, but often there’s no action plan to back them up. There’s no point in having a vision if you don’t have a way to realize it.

(Shortform note: In Good Strategy/Bad Strategy, Rumelt adds that companies sometimes think vision and motivation are all you need for a good strategy, as if you can realize your goals through sheer dedication and force of will. Like Lafley and Martin, he says this approach is incorrect: Dedication and determination are excellent values, but they’re not aspects of strategy.) 

2. Strategy is just a plan. A step-by-step plan is fine, but it’s not enough on its own to secure an advantage in the marketplace. A good strategy is goal-oriented and flexible enough to adapt to changing circumstances.

(Shortform note: Rumelt says that, in creating a goal-oriented strategy, it’s important to choose appropriate goals (he uses the term “objectives”). Like Lafley and Martin, Rumelt warns against splitting your focus among too many different goals, and he adds that each of your goals should be a clear step from your current situation to your desired situation.)

3. A long-term strategy is a waste of time. Many people think the world changes so quickly that long-term planning is impossible. This makes them reactive rather than proactive, which puts them at a disadvantage against more strategic competitors. 

(Shortform note: In creating a long-term strategy for your company, there are certain challenges that you’re sure to face, such as competition, distribution, and advertising. Rumelt says that one common planning pitfall is failing to clearly and specifically identify inevitable challenges, which makes it impossible to overcome them.)

4. Strategy works within the status quo. A lot of companies try to optimize their strategy for the current situation, or else rely on “best practices,” instead of innovating new approaches to anticipate and meet customer needs. Again, this makes them reactive instead of proactive.

(Shortform note: One reason this is such a common strategic pitfall is that people tend to resist change—we’re inclined to uphold the status quo even if we know that better alternatives are possible. Therefore, companies are unlikely to pursue bold strategies that break with currently accepted theories and best practices.)

Playing to Win: Cascade Strategy Overview

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Like what you just read? Read the rest of the world's best book summary and analysis of AG Lafley's "Playing To Win" at Shortform .

Here's what you'll find in our full Playing To Win summary :

  • Why the cascade strategy will help you become victorious in your chosen field of play
  • Why you should make every choice with the purpose of not just competing, but winning
  • How to develop a system of decision-making for your company

Hannah Aster

Hannah graduated summa cum laude with a degree in English and double minors in Professional Writing and Creative Writing. She grew up reading books like Harry Potter and His Dark Materials and has always carried a passion for fiction. However, Hannah transitioned to non-fiction writing when she started her travel website in 2018 and now enjoys sharing travel guides and trying to inspire others to see the world.

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