Welcome to the bloggy home of Noah Brier. I'm the co-founder of Percolate and general internet tinkerer. This site is about media, culture, technology, and randomness. It's been around since 2004 (I'm pretty sure). Feel free to get in touch. Get in touch.

You can subscribe to this site via RSS (the humanity!) or .

P&G’s Strategy Algorithm

In response to my post on Strategy as Algorithm, Michael Migurski shared this image with me from P&G CEO A.G. Lafley’s book Playing to Win: How Strategy Really Works.

These are the five questions Lafley’s used for making major strategy decisions at P&G. In explaining why he uses this approach and why strategy is hard, Lafley explained:

In Roger Martin’s and my view, the essence of strategy is making 5 integrated — sometimes difficult — choices; so 5 choices to win. And a lot of us, a lot of human beings, don’t like to make choices, right? Choices are difficult, we want to keep our options open, choices involve taking risks, and not only risk to the business but personal risk. So I think there’s this sort of human resistance to making choices, and choices are the core of strategy.

Business Insider has a nice breakdown of what each step in the above image means and how they were used. Here, for instance, is how they explain the capabilities question:

What are my core competencies that are going to enable me to win? In order to make the above decisions work, they have to be based on and supported by the things that a company’s best at. For P&G, it was innovating quickly and understanding consumers.

Now that Lafley is back at the helm as CEO it’s interesting to take some of his more recent decisions, like the big one to divest a large number of brands, through the lens of this system.

December 4, 2014 // This post is about: , , , , ,

Comments

  • Namrata Balwani says:

    Hi Noah,
    This is a brilliant strategy model. Though it would be interesting to apply this to start-ups who sometimes have an accidental business model and sometimes have to decide who their consumers are along the way, since technology and people’s usage of it changes so quickly. Not to mention revenue sources that may change over time. Of course, asking these questions is important, seemingly simple, but distilled with great insight and experience.

  • Namrata Balwani says:

    Also, your blog comments are in the past ;-) This is Dec 10, 2014. I am all for not growing a year older though!

  • Leave a Comment

    Your email address will not be published. Don't sweat it.