Start. What is strategy | 1min snip from Lenny's Podcast: Product | Growth

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

Lenny's Podcast: Product | Growth | Career

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**Start. What is strategy **

Hyper-competition is a concept that some believe shapes the current business landscape, but there are significant discrepancies between theoretical portrayals and actual business practices. The criticism of hyper-competition is rooted in the notion that it oversimplifies complex realities and doesn't align with established research like that of Mike Porter. Understanding strategy requires going beyond popular theories and examining how they relate to real-world businesses. By scrutinizing various perspectives on strategy, especially in the context of hyper-competition, one can gain a more comprehensive view of strategic planning and execution. The need for a clear definition of strategy is crucial, as it sets the foundation for effective decision-making and competitive positioning within the business environment.

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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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