Are You Playing to Win?

Named as one of the top management thinkers in the world, Roger Martin, the Dean of the Rotman School of Management in Toronto, talks about why so few of us understand good strategy and what we can do about it. Martin has written eight books, including his latest, which he co-wrote with A.G. Lafley (former CEO of Proctor &Gamble): Playing to Win –How Strategy Really Works(Harvard Business Review Press, 2013). Martin also contributes regularly to Harvard Business Review, the Financial Times and the Washington Post. He advises CEOs around the globe on strategy, design, innovation and integrative thinking. 

Q. Given all of your work over the years with leaders and organizations, what do you think makes a successful leader?

A. Good leaders recognize they have to make choices. Unfortunately many leaders take a wait and see approach to strategy, hoping that and when things become clear, they will make the choices they need to. But if things aren’t clear now, chances are they won’t be tomorrow. The great leaders that I’ve met say: “Yes there is uncertainty” and “Yes it is a complicated world,” but we have to take that and make choices. And that willingness to choose, and the recognition that you have to, is the cornerstone of great leadership. 

Q. Why is it that leaders have so much difficulty making choices? What’s holding them back?

A. Mostly it is fear of being wrong. So many people grow up in a culture that says you have to get an A+ on everything. So, leaders often want to be perfect. It is difficult to face up to the fact that they have to make strategic bets – some of which are not going to pay off.

Q. You recently wrote a blog about strategy versus planning? What’s the difference?

A. A lot of people like to plan because plans tend to be long lists of things we want to do. Planning absolves them from the need to choose implicitly. Strategy is all about choices and giving the rationale for your choice. 

Q. In the executive search business, it seems the hardest quality to find in senior leaders is strategic thinking. Is this consistent with what you see?

A. I think this concern is right. I would say only 10-15% of all chief executives I have ever met in my life know anything useful about strategy. And I underscore “useful.” They may have read a book about strategy, but that doesn’t mean they understand it. 

Q. That is a bit shocking. Why do you think the ability to do strategy is so rare in today’s leaders?

A. I would put the blame on two institutions – the first is an MBA education. The strategy that is generally taught in business schools mainly involves teaching concepts. So if a CEO says, “My business is losing market share and my profitability is going down,” using strategy concepts such as profit from the core, Blue Ocean and core competencies management will not provide the thinking process for getting you from a crummy strategy to one that works. You need an “end to end” approach. 

The second problem is a group of people called strategy consultants (of which I was one for many years). The vast majority of these consultants don’t actually want their clients to really understand how to do strategy. So leaders are left in the dark. 

Q. Are there people who are naturally good at strategy or is it mostly learned?

A. I do think that there are people who, for some reason, are good at strategy whether they even know what it is or not. Many entrepreneurs are great strategists. For instance, my father built the biggest animal feed manufacturing company in Ontario. When I asked him why he built a multi-million dollar, truck-cleaning facility when he wouldn’t spend the money to have his own office, he told me that every time a clean, well-maintained truck came down a farmer’s driveway, it gave the farmer confidence that my father’s company would always deliver. My dad understood, in intense detail, how the customer thought about their business, and how his company could meet their needs. This is strategy. 

Q. What about the 85% of leaders who are running organizations without a compelling strategy. How can they become more strategic?

A. Leaders need to practice being strategic. Start by writing down your key assumptions such as “I am doing this because I believe customers want and care about x, and my competitors won’t do y, and I can build the capabilities to z.” This way you can watch and see if your assumptions turn out to be true. If they are not true then you need to modify. Ask yourself, “What was my pattern of thinking that made me think that customers wanted x and they turned out not to?”You likely won’t get that perfect either, but you’ll start to learn. 

Q. If strategy is set by the CEO, then how can executives who are not in the C-suite influence strategy?

A. I think it is unhelpful to describe strategy as something that happens at the top and then the rest of the company executes. At the top there is a CEO responsible for making a certain set of choices, but under that person there is an EVP of a division or a head of marketing that also needs to make choices – asking where should we play and where can we win?

Q. So aren’t you really saying that good strategy is constantly thinking about and understanding why you are doing the things you are doing?

That is a very good insight. There is not a question I ever asked my Dad that he didn’t have an answer for why he did what he did. Everything was very conscious. It doesn’t mean it’s all going to be right, but it’s all very conscious.