What The 5 Choices of Strategy Are & How to Use Them

Strategizing involves making numerous choices and taking action, because of this, experts often refer to five choices that must be made when setting a strategy. The origin of this framework is Playing to Win: How Strategy Really Works by A.G. Lafley, former CEO of Procter & Gamble (P&G), and Roger L. Martin, dean of the Rotman School of Management. The authors of Playing to Win used the five-choice strategy method to transform P&G into a powerhouse.

Many leaders have since used this strategy framework to simplify the process and ensure the success of large initiatives. Learn what the five choices of strategy are and how they can help your organization grow and create value for stakeholders.

(It is important to note that the 5 Choices of Strategy should not be confused with the 5 Ps of strategy).

1. What Is Our Winning Aspiration?

Companies tend to state their aspirations in their mission or vision statement. However, these aspirations are often overlooked due to daily operational demands. Furthermore, a formal corporate statement may not resonate with front line team members, which is why leaders need to build connections and align to it on every project.

Your company’s winning aspiration should be the foundation of all your strategy plans. Additionally, clearly communicating to team members how each project supports the company’s winning aspiration increases alignment and the chances of success. When team members understand the aspiration, they focus on the bigger picture, resulting in more strategic thinking and action.

During 2000–2010, P&G’s aspiration was: “We will provide products and services of superior quality and value that improve the lives of the world’s consumers. As a result, consumers will reward us with leadership sales, profit, and value creation, allowing our people, our shareholders, and the communities in which we live and work to prosper.”

2. Where Do We Play?

“Where to play” determines what area you want to focus your goals on and where to allocate your resources.

This can include:

• The target demographic
• Product/service prices
• The problem you’re attempting to solve
• Geography
• Distribution channels
• Differentiation from competitors

These choices help you forge the most efficient path of action from the starting line to the finish line. Choosing where to play prevents you from spreading resources too thin and attempting to do more than your team can handle.

When you link a clear focus on “where to play” with winning aspirations, contributors in your organization begin to examine possibilities more strategically. For example, your team may identify avenues your competitors have ignored, leading to new opportunities and unprecedented success.

P&G chose to focus on its core strengths. The organization concentrated on its core brands, geographies, and consumers. This choice prevented the organization from diluting itself while attempting to do everything.

3. How Do We Win?

Now that your team has an aspiration and playing field, it’s time to decide how you will win. In business, this is generally done through pricing or differentiation. Consumers will come to you if you can create the same product that is less expensive than your competitors. However, there is a risk that your competitors will also lower their prices and race to the bottom.

Differentiation is offering products and services that stand out from the competition. They may be products that solve problems in innovative ways or even solve problems consumers did not realize they had. They may also offer products that are higher-quality, more attractive, or uniquely marketed. Product design, performance, and branding are a few additional ways to achieve differentiation.

P&G’s strategy for winning was to focus on scaling its brand through distinctive products and partnerships. It also took advantage of its global reach to work with different manufacturers and distributors.

Recommended: Why Is Strategic Thinking Important in the Workplace?

4. What Are Our Core Capabilities?

This choice focuses on human capital. You must determine which skills and competencies your team needs to effectively execute your chosen strategy.

• What does your team and organization do best compared to competitors in the market?
• How can you use these capabilities to ensure long term sustained success?
• Do you need to hire other contributors with the expertise to guarantee your success?

Building a team with a variety of skills is crucial for a winning strategy. Each team member’s skills should easily integrate with others and minimize friction. Strategic success does not happen due to a single person’s capability; it forms when collective capabilities work together toward long-term goal achievement.

P&G’s core capabilities were:

• Deep consumer understanding
• Innovation
• Brand building
• Go-to-market ability
• Global scale

Develop your team’s core capabilities with the five key elements of strategic thinking.

5. What Are Our Management Systems?

Once you have the what, where, and how to win, it’s time to solidify all of those components in a management system. This allows all parties to keep track of progress, ensure the strategy is being implemented effectively, and initiate relevant discussions. Effective management systems are crucial for project and organizational success.

P&G created systems that focused on:

• Strategy dialogues
• Innovation program reviews
• Brand equity reviews
• Budget and operating plan discussions
• Talent assessment and development reviews

Recommended: How to Think Strategically as Leaders

What Is the “Playing to Win” Business Model?

The “Playing to Win” framework or business model comes from the book Playing to Win: How Strategy Really Works. It’s a cascading hierarchy influenced by the five choices of strategy addressed above. The model allows each decision to influence the next for smooth project execution. Ultimately, this framework aims to help companies develop winning strategies and maximize their chances of success.

To use this framework at your organization, ask the questions in the five choices of strategy. Along the way, pinpoint how you operate and make plans to leverage your strengths and neutralize your weaknesses.

Learn about other frameworks and approaches to strategic thinking in the workplace.

Build Stronger Strategic Thinking Skills with CMOE

Leaders and contributors alike need to be able to think strategically and execute strategic plans. CMOE can strengthen your organization’s strategic thinkers with our Applied Strategic Thinking® workshop. Using theory and practice, we will help you build a team that effectively balances long-term strategy with navigating current challenges and dilemmas.

Leaders and contributors alike need to be able to think strategically and execute strategic plans. CMOE can strengthen your organization’s capabilities through our Strategic Leadership Workshop which helps leaders formulate, define and carry out strategic plans. The Applied Strategic Thinking® workshop is designed to help individuals contribute to the plan to win in a strategic way.