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5 essential questions to craft a winning strategy | Roger Martin (author, advisor, speaker)

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Jul 25, 2024

Guest

Roger Martin

Roger Martin, a leading expert on strategy and author of "Playing to Win," shares his insights on crafting effective business strategies. He discusses the five essential questions that drive a winning strategy and highlights why many companies fail. Martin advocates for integrating strategic thinking across all levels, not just top executives. Using examples from brands like Procter & Gamble and Southwest Airlines, he emphasizes the importance of differentiation over low cost and critiques the shortcomings of traditional strategy education.

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ADVICE

Building Moats

Create "moats" or barriers to entry, like unique capabilities or management systems, to protect your competitive advantage.
Hamilton Helmer's "Seven Powers" categorizes these moats, offering a framework for strategic thinking.

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ADVICE

Customer-Centric Aspiration

When defining your winning aspiration, focus on fulfilling customer needs.
Frame it in terms of how customers benefit, making the customer central to your strategy.

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ADVICE

Defining 'Where to Play'

Define "where to play" by specifying target customers, distribution channels, product type, and vertical stage.
Consider whether you offer a finished product, a component, or an integrated solution within the value chain.

Get the Snipd Podcast app to discover more snips from this episode

The Strategic Power of Brand Managers in Corporations

02:55 • 2min

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The Complexities of Crafting Effective Business Strategy

04:56 • 5min

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Challenging Business Strategy Norms

09:40 • 8min

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Crafting Winning Strategies

17:34 • 19min

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Building and Understanding Competitive Moats

37:01 • 2min

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Strategic Moats and Market Dynamics

39:21 • 26min

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Adapting to Change: Navigating Technology and Customer Preferences

01:05:41 • 16min

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#2089

• Mentioned in 19 episodes

Competitive strategy

Techniques for Analyzing Industries and Competitors

Michael Porter

This book by Michael E. Porter provides a detailed analysis of the competitive landscape by introducing the Five Forces framework: threat of new entrants, intensity of rivalry among existing competitors, pressure from substitute products, bargaining power of buyers, and bargaining power of suppliers. Porter also presents three generic strategies—cost leadership, differentiation, and focus—which help companies position themselves competitively. The book has been highly influential in shaping the discipline of competitor assessment and has been widely adopted by managers, analysts, and scholars worldwide.

#4042

• Mentioned in 11 episodes

7 Powers: The Foundations of Business Strategy

The Foundations of Business Strategy

Hamilton Helmer

In '7 Powers: The Foundations of Business Strategy,' Hamilton Helmer introduces a practical theory of strategy rooted in the concept of 'Power,' which are conditions that create the potential for persistent differential returns. The book outlines seven powers: Scale Economies, Network Economies, Counter-Positioning, Switching Costs, Branding, Cornered Resources, and Process Power. Each power provides a benefit to its owner and a barrier to competitors. Helmer uses real-world examples and a framework called the Power Progression to guide businesses through different phases of growth, emphasizing the importance of strategy in achieving and sustaining competitive advantages.

#1261

• Mentioned in 29 episodes

Playing to Win

How Strategy Really Works

Roger Martin

A.G. Lafley

This book teaches the 5-question Strategy Choice Cascade and the 7-question Strategy Logic Flow, frameworks developed by Roger Martin and applied by A.G. Lafley during his tenure as CEO of Procter & Gamble. It emphasizes the importance of focusing on where and how to win, using real-life examples from P&G to illustrate how these strategies can be applied across various organizations. The authors argue that companies must 'play to win' rather than just 'play to play,' highlighting the need for clear strategic goals and selective focus on winning aspirations.

#536

• Mentioned in 54 episodes

Good Strategy/Bad Strategy

The Difference and Why It Matters

Richard Rumelt

In *Good Strategy/Bad Strategy*, Richard Rumelt clarifies the distinction between effective and ineffective strategies. He argues that a good strategy is a specific and coherent response to overcoming obstacles, harnessing power where it will have the greatest effect. Rumelt debunks elements of 'bad strategy' such as equating goals, motivational slogans, and financial targets with actual strategy. He introduces the 'kernel' of strategy, which includes a diagnosis of the challenge, a guiding policy, and coherent action. The book uses diverse examples from business, nonprofit, and military contexts to illustrate these concepts and emphasizes the importance of analytical rigor and focused effort in strategy development.

Roger Martin is one of the world’s leading experts on strategy and the author of Playing to Win, one of the most beloved books on strategy. He’s written extensively for the Harvard Business Review; consulted for dozens of Fortune 500 companies, including P&G, Lego, and Ford; and written 11 other books. In our conversation, we discuss:

• The five key questions you need to answer to develop an effective strategy

• Why most companies get strategy wrong

• How to avoid “playing to play” instead of playing to win

• Real-world strategy examples from Procter & Gamble, Southwest Airlines, Lego, and Figma

• How to think about differentiation vs. low cost

• Shortcomings of current strategy education

• Much more

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Correction: Roger pointed out that he made an error during our chat. When I asked him about Richard Rumelt (~16 mins), he thought I said Richard D'Aveni.

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Find the transcript at: https://www.lennysnewsletter.com/p/the-ultimate-guide-to-strategy-roger-martin

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Where to find Roger Martin:

• X: https://x.com/RogerLMartin

• LinkedIn: https://www.linkedin.com/in/roger-martin-9916911a9/

• Website: https://rogerlmartin.com/

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Where to find Lenny:

• Newsletter: https://www.lennysnewsletter.com

• X: https://twitter.com/lennysan

• LinkedIn: https://www.linkedin.com/in/lennyrachitsky/

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In this episode, we cover:

(00:00) Roger’s background

(02:20) The importance of strategy

(07:00) Challenges in developing strategy

(08:30) Critique of modern strategy education

(14:00) Hamilton Helmer and Richard Rumelt

(17:40) Defining strategy

(19:12) The Strategy Choice Cascade

(23:20) Playing to win vs. playing to play

(24:57) Examples of strategic success

(30:49) Differentiation and moats

(40:23) Applying strategy to real-world scenarios

(43:47) Customer-centric strategy

(44:45) Defining the market and product

(45:59) Value chain and distribution

(48:28) Cost leadership vs. differentiation

(53:16) Capabilities and management systems

(57:14) Competitive advantage and market positioning

(01:02:41) Counterpositioning and fault lines

(01:05:53) Adapting to AI and market changes

(01:14:11) Betterment over perfection

(01:18:42) Final thoughts on strategy

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Referenced:

• Nearly 10% of S&P 500 CEOs are alumni of Procter & Gamble: https://www.bizjournals.com/cincinnati/news/2023/02/06/10-of-s-p-500-ceos-pg.html

• FigJam: https://www.figma.com/figjam/

• Figma: https://www.figma.com/

• What Is Resource-Based Theory?: https://www.igi-global.com/dictionary/the-impact-of-technological-governance-and-political-capabilities-on-firms-performances-under-economic-turbulence/67915

• Michael Porter on LinkedIn: https://www.linkedin.com/in/professorporter/

• Competitive Strategy: Techniques for Analyzing Industries and Competitors: https://www.amazon.com/Competitive-Strategy-Techniques-Industries-Competitors/dp/0684841487

• VRIO Framework Explained: https://strategicmanagementinsight.com/tools/vrio/

• Business strategy with Hamilton Helmer (author of 7 Powers): https://www.lennysnewsletter.com/p/business-strategy-with-hamilton-helmer

• Good Strategy, Bad Strategy | Richard Rumelt: https://www.lennysnewsletter.com/p/good-strategy-bad-strategy-richard

• 7 Powers: The Foundations of Business Strategy: https://www.amazon.com/7-Powers-Foundations-Business-Strategy/dp/0998116319

• Boston Consulting Group: https://www.bcg.com/

• Bruce Henderson: https://en.wikipedia.org/wiki/Bruce_Henderson

• Lego: https://www.lego.com

• Vanguard: https://investor.vanguard.com/

• Southwest Airlines: https://www.southwest.com/

• How Amazon Managed to Dethrone Walmart: https://www.nytimes.com/interactive/2021/08/20/technology/how-amazon-beat-walmart.html

• GM Lost a 10-Year Battle with Tesla, Pulling the Plug on a Long Line of EVs: https://www.forbes.com/sites/brookecrothers/2023/07/09/gm-killed-its-electric-cars-and-lost-a-10-year-battle-with-tesla/

• Westlaw: https://www.westlawinternational.com/

• What Is an Economic Moat? Why Warren Buffett Says It Matters for Investors: https://finance.yahoo.com/news/economic-moat-why-warren-buffett-160046125.html

• Salomon Brothers: https://en.wikipedia.org/wiki/Salomon_Brothers

• US Airways: https://en.wikipedia.org/wiki/US_Airways

• Four Seasons: https://www.fourseasons.com/

• Michael Dell on LinkedIn: https://www.linkedin.com/in/mdell/

• Bill Gates on LinkedIn: https://www.linkedin.com/in/williamhgates/

• Mandarin Oriental: https://www.mandarinoriental.com/en/

• Continental Lite: https://en.wikipedia.org/wiki/Continental_Lite

• Ted (airline): https://en.wikipedia.org/wiki/Ted_(airline)

• Case Study: Oil of Olay: https://www.studocu.com/es/document/universidad-de-murcia/estrategia-de-marketing/case-study-old-of-olay/95079369

• AG Lafley on LinkedIn: https://www.linkedin.com/in/ag-lafley-2381b3201/

• Jack Bogle: https://en.wikipedia.org/wiki/John_C._Bogle

• Seven Ways Windows 95 Changed the World: https://www.forbes.com/sites/ianmorris/2015/08/24/windows-95-changed-the-world/

• Where to Start with Strategy? Focus on Betterment: https://rogermartin.medium.com/where-to-start-with-strategy-bae40506304c

• Brick by brick: The man who rebuilt the house of Lego shares his leadership secrets: https://www.washingtonpost.com/news/on-leadership/wp/2016/12/08/brick-by-brick-the-man-who-rebuilt-the-house-of-lego-shares-his-leadership-secrets/

• A New Way to Think: Your Guide to Superior Management Effectiveness: https://www.amazon.com/New-Way-Think-Management-Effectiveness/dp/164782351X/

• Playing to Win: How Strategy Really Works: https://www.amazon.com/Playing-Win-Strategy-Really-Works/dp/142218739X

• The Design of Business: Why Design Thinking Is the Next Competitive Advantage: https://www.amazon.com/Design-Business-Thinking-Competitive-Advantage/dp/1422177807

• The Opposable Mind: How Successful Leaders Win Through Integrative Thinking: https://www.amazon.com/Opposable-Mind-Successful-Integrative-Thinking/dp/1422118924

• When More Is Not Better: Overcoming America’s Obsession with Economic Efficiency: https://www.amazon.com/When-More-Not-Better-Overcoming/dp/1647820065

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Lenny may be an investor in the companies discussed.

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