Lafley and Martin’s Five-Step Strategy Model
Making Effective Strategic Choices
What business strategy is all about – what distinguishes it from all other kinds of business planning – is, in a word, competitive advantage. Without competitors there would be no need for strategy, for the sole purpose of strategic planning is to enable the company to gain, as efficiently as possible, a sustainable edge over its competitors. – Kenichi Ohmae.
Every day, your company competes with other companies to survive and succeed. Your competitors have the same goal as you: to win. This is why you need to think carefully about how you'll get ahead – you need to develop a winning strategy.
It's hard to do this. If you get your strategy wrong (and this includes not thinking about strategy at all), you'll fall behind your rivals, and you may never recover your position. However, get strategy right, and you can pull ahead of the competition.
So, how can you develop a winning strategy?
In this article, we'll examine Lafley and Martin's Five-Step Strategy Model, a tool that you can use to do this for your organization.
About the Model
A.G. Lafley and Roger Martin developed the Five-Step Strategy Model and published it in their 2013 book, "Playing to Win." Lafley is a former CEO of Procter & Gamble, and Martin was previously Dean at the Rotman School of Management.
According to Lafley and Martin, 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."
The authors developed a framework that decision makers can use to select the right strategic approach for their organization. They can then make operational choices that support this strategy.
To develop a winning strategy, you need to answer the following five questions in order:
- What is our winning aspiration?
- Where will we play?
- How will we win?
- What capabilities must we have in place to win?
- What management systems are required to support our choices?
Figure 1 – Lafley and Martin's Five-Step Strategy Model
Reprinted by permission of Harvard Business Review. From "Playing to Win: How Strategy Really Works" by A.G. Lafley and Roger Martin, 2003. Copyright © 2003 by the Harvard Business School Publishing Corporation; all rights reserved.
Once you've answered each question, be prepared to to revisit earlier questions to refine your answers.
Applying the Five Steps
Let's look at each of the five steps in detail, and think about how you can apply each one to your organization.
1. What Is Our Winning Aspiration?
Your winning aspiration is your organization's guiding purpose – it's the reason that it does what it does.
Lafley and Martin maintain that...