Introduction
Many small-to-medium businesses do not have a strategy.
They have goals.
They have budgets.
They have business plans.
They have sales targets.
They have a list of projects.
They may even have an impressive strategic planning document.
But that does not necessarily mean they have a strategy.
This is the central challenge addressed in Playing to Win: How Strategy Really Works by A.G. Lafley and Roger L. Martin.
For SME owners and leaders interested in Strategic Planning Perth, the book offers one of the most practical and commercially useful definitions of strategy I have encountered:
Strategy is choice.
Not a wish list.
Not a forecast.
Not a mission statement.
Not 47 initiatives spread across a PowerPoint deck.
A strategy is an integrated set of choices about where you will compete, how you will win, what capabilities you need, and what systems must support those choices. Roger Martin continues to describe strategy in exactly these terms, namely as a set of interrelated choices rather than a long planning document. (Roger L. Martin)
That distinction matters enormously for SMEs.
A 30-person business cannot afford to pursue every market.
A 70-person company cannot simultaneously be the lowest-cost operator, the premium service provider, the innovation leader, the most customised supplier and the fastest-growing competitor in every segment.
Resources are finite.
Capital is finite.
Management attention is finite.
Time is finite.
Strategy therefore requires choices.
And every genuine choice also requires saying no.
That is what makes Playing to Win so valuable.
It forces business owners to confront a question many strategic plans avoid:
What are we deliberately choosing not to do?
Throughout almost four decades of big corporate, being a start-up entrepreneur, and advising businesses across Australia and internationally, I have repeatedly seen that successful organisations rarely win because they do more than everyone else. They tend to win because they develop greater clarity about where they will compete, how they will differentiate, which capabilities matter most and what they must execute exceptionally well.
That was certainly true during my time leading Standard Bank Retail Collective Investments. We did not transform the business simply by setting larger growth targets. We made strategic choices around product development, distribution, market positioning, organisational capability and execution. Over time, the business increased market share from approximately 5% to 12.8%, expanded Assets Under Management by 7-fold over 5-years, and materially increased revenue and profitability.
That experience reinforced one of the most important lessons in Playing to Win:
Winning strategy is not about having more ideas. It is about making better choices.
Table of Contents
- What Is Playing to Win Really About?
- Why Strategy Is Choice, Not Planning
- The Five Strategic Choices
- Choice 1, What Is Your Winning Aspiration?
- Choice 2, Where Will You Play?
- Choice 3, How Will You Win?
- Choice 4, What Capabilities Must You Have?
- Choice 5, What Management Systems Are Required?
- Why Where to Play and How to Win Must Work Together
- Why SMEs Struggle to Make Strategic Choices
- The Danger of Trying to Serve Everyone
- Playing to Win and Sustainable Competitive Advantage
- Strategy Must Cascade Through the Organisation
- Strategy Requires Explicit Trade-Offs
- What Playing to Win Gets Right, and Where SMEs Need to Go Further
- A Practical Playing to Win Framework for SME Owners
- Practical Recommendations
- Key Takeaways
- Frequently Asked Questions
- Conclusion
What Is Playing to Win Really About? (Strategic Planning Perth)
Playing to Win was written by former Procter & Gamble CEO A.G. Lafley and strategy thinker Roger L. Martin.
The book draws heavily on the strategic choices made at P&G and uses them to explain a broader framework that can be applied to organisations of different sizes.
Harvard Business Review describes the framework as five critical strategic choices:
- What is our winning aspiration?
- Where will we play?
- How will we win?
- What capabilities must we have?
- What management systems are required to support those choices? (Harvard Business Review)
The power of the framework lies in its simplicity.
But simplicity should not be confused with ease.
The authors make the point that strategy is hard precisely because it forces leaders to choose.
That is why many organisations avoid genuine strategy.
They prefer statements such as:
Grow revenue.
Improve customer service.
Expand nationally.
Become an employer of choice.
Invest in technology.
All worthwhile.
But none answers:
Where will we play?
or:
How will we win there?
Without those answers, the organisation has aspirations, not strategy.
Why Strategy Is Choice, Not Planning (Strategic Planning Perth)
This is the most important idea in the entire book.
Strategic planning and strategy are related, but they are not identical.
Planning asks:
- What will we do?
- When will we do it?
- Who owns it?
- What will it cost?
Strategy asks:
- Where will we compete?
- Which customers matter most?
- What value will we create for them?
- Why should they choose us?
- What will we do differently from competitors?
- What capabilities must we build?
That distinction also connects with my article on working out what business you are really in and how you create and capture value.
You cannot build a strong plan until you have made strong strategic choices.
A perfectly executed plan built around weak choices merely helps you reach the wrong destination faster.
The Five Strategic Choices (Strategic Planning Perth)
The five choices form what Lafley and Martin call a strategic choice cascade.
The word cascade is important.
The choices are interconnected.
Your winning aspiration influences where you play.
Where you play influences how you must win.
How you intend to win determines the capabilities required.
Those capabilities determine the management systems needed to support them.
Roger Martin has subsequently stressed that these choices should not be treated as isolated sequential exercises. They need to be considered as an integrated whole.
For SMEs, this is particularly important because one poor choice can undermine the whole strategy.
Imagine an SME chooses to serve the premium end of the market.
But:
its salespeople compete mainly on price,
its systems are designed for low-cost volume,
its people are trained for transactional service,
and its management incentives reward unit sales rather than margin.
The business says premium.
The operating model says commodity.
That is strategic inconsistency.
Choice 1, What Is Your Winning Aspiration? (Strategic Planning Perth)
The first question sounds simple:
What does winning mean for us?
Not surviving.
Not staying busy.
Not increasing revenue for its own sake.
Winning.
For one SME, winning may mean:
Becoming the most trusted specialist provider in Western Australia.
For another:
Becoming the lowest-cost provider in a narrowly defined market.
For another:
Owning the premium segment in a specialised category.
For another:
Building a national business capable of being sold for a premium valuation.
The aspiration should provide direction.
But it must also be realistic enough to guide decisions.
Growth Is Not Automatically Winning
This is an important distinction.
Revenue can grow while value is being destroyed.
A company can win new customers while margins deteriorate.
A business can expand geographically while becoming less profitable.
Winning should therefore include more than scale.
It may involve:
- Customer preference.
- Margin.
- Market position.
- Reputation.
- Cash generation.
- Competitive advantage.
- Long-term business value.
This is where Business Growth Perth should always be understood as sustainable growth, not growth for growth’s sake.
Choice 2, Where Will You Play? (Strategic Planning Perth)
This may be the most neglected strategic question in SMEs.
Many owners say:
“We will sell to anyone who wants to buy.”
That may feel commercially sensible.
Strategically, it can be disastrous.
Where to play includes choices about:
- Geography.
- Customer segment.
- Industry.
- Product category.
- Service category.
- Distribution channel.
- Price point.
- Value chain position.
For example:
A transport company could choose:
Mining and energy customers in Western Australia.
rather than:
Anyone needing freight.
A professional services firm could focus on:
Owner-managed businesses with A$5 million to A$50 million revenue.
rather than:
Any business requiring advice.
The narrower choice may actually create greater growth because it concentrates:
marketing,
capability,
reputation,
sales effort,
knowledge,
and customer relevance.
This connects directly with sustainable competitive advantage.
If you try to play everywhere, it becomes extraordinarily difficult to develop distinctive advantage anywhere.
Choice 3, How Will You Win? (Strategic Planning Perth)
Once you decide where to play, the next question is:
Why should customers choose you rather than somebody else?
This is where strategy becomes commercially meaningful.
Potential sources of advantage might include:
- Lower cost.
- Better service.
- Specialist expertise.
- Faster delivery.
- Better technology.
- Superior convenience.
- Unique product features.
- Strong relationships.
- Brand trust.
- Better customer experience.
- Network effects.
- Proprietary intellectual property.
The key word is differentiation.
If your answer is:
“We provide quality service at competitive prices.”
you probably do not yet have a strategy.
Most competitors claim the same thing.
Your answer should connect directly with your business value proposition.
Customers need to understand:
Why you?
And ideally:
Why you instead of the obvious alternative?
That is how strategy becomes visible in the marketplace.
Choice 4, What Capabilities Must You Have? (Business Improvement Perth)
A strategy without capabilities is merely an ambition.
Suppose your how-to-win choice is:
Exceptional technical expertise and premium customer service.
Then you may require capabilities in:
- Recruitment.
- Training.
- Knowledge management.
- Customer relationship management.
- Quality control.
- Service recovery.
- Technical innovation.
Suppose your strategy is:
Lowest-cost reliable provider.
Now the capabilities change:
- Operational efficiency.
- Procurement.
- Process optimisation.
- Technology.
- Asset utilisation.
- Cost control.
This is a crucial point.
Different strategies require different capabilities.
That is why I have previously argued that critical capabilities and strategic assets are not the same thing.
Capabilities are what the organisation must repeatedly be able to do well.
Strategic assets are resources or positions that may support those capabilities.
SME owners often confuse the two.
Choice 5, What Management Systems Are Required? (Business Improvement Perth)
This is where strategy enters everyday management.
You have decided:
what winning means,
where you will play,
how you will win,
and which capabilities matter.
Now ask:
What systems make sure this actually happens?
These may include:
- KPIs.
- Management reporting.
- Budgets.
- Incentives.
- Performance reviews.
- Strategic review meetings.
- Dashboards.
- Operating procedures.
- Recruitment systems.
- Customer feedback.
This is why strategy execution depends so heavily on business improvement and performance management.
If the strategy is premium service but employees are rewarded only for volume, the management system undermines the strategy.
If the strategy requires innovation but budgets penalise experimentation, the system undermines the strategy.
If the strategy requires accountability but nobody reviews commitments, the system undermines the strategy.
A strategy becomes real when the systems reinforce the choices.
Why Where to Play and How to Win Must Work Together (Strategic Planning Perth)
These two choices are inseparable.
You cannot answer:
How will we win?
without knowing:
Where?
For example:
“We will win through superior personal service.”
Against whom?
For which customers?
At what price?
In which market?
Personal service may be highly valued in one segment and irrelevant in another.
Likewise:
“We will win through lowest cost.”
That choice may work in a price-sensitive mass market, but not in a niche where customers want tailored expertise.
This is why generic strategies fail.
Strategy must be specific enough to guide trade-offs.
Why SMEs Struggle to Make Strategic Choices (Strategic Planning Perth)
SME owners often struggle with choice because choice feels like limitation.
They fear saying:
No.
No to a customer segment.
No to a product.
No to a geography.
No to a low-margin opportunity.
No to a project.
No to a potential acquisition.
But a strategy that excludes nothing chooses nothing.
One of the most valuable questions a business owner can ask is:
What are we deliberately not going to do?
This is where independent challenge can be extremely valuable.
An experienced Business Advisor Perth can often help owners distinguish between:
opportunity
and:
distraction.
Those are not the same thing.
The Danger of Trying to Serve Everyone (Business Growth Perth)
Many SMEs become strategically diluted.
They start with a clear niche.
Then:
a customer requests something slightly different.
The business agrees.
Another opportunity emerges.
They add another service.
Then another market.
Then another customer type.
Ten years later the business offers:
everything,
to everyone,
through everyone.
Revenue may have grown.
Strategic clarity may have disappeared.
This is where Blue Ocean Strategy provides a useful complementary lens.
Strong businesses do not necessarily win by adding more.
Sometimes they win by removing complexity and becoming dramatically clearer about the value they create.
Playing to Win and Sustainable Competitive Advantage (Strategic Planning Perth)
The Playing to Win framework becomes particularly powerful when connected with competitive advantage.
Your how-to-win choice should ideally produce something competitors cannot easily copy.
For example:
A competitor can copy your price.
They may copy your website.
They may imitate a product.
Harder to copy:
- Deep customer relationships.
- Organisational know-how.
- Culture.
- Proprietary systems.
- Network effects.
- Strategic partnerships.
- Brand trust.
This is why strategy should connect with the underlying logic of sustainable competitive advantage.
The strategic question is not simply:
What makes us different today?
It is:
What could make us difficult to compete against for years?
Strategy Must Cascade Through the Organisation (Leadership Development Perth)
A strategy known only by the owner is not an organisational strategy.
It is an owner’s idea.
The leadership team must understand:
where we play,
how we win,
what capabilities matter,
and what they are personally responsible for.
Employees also need enough clarity to understand how their work supports the strategy.
That connects directly with high-performance teams.
If Sales is pursuing customers the operations model cannot serve profitably, the strategy has not cascaded.
If Finance is cutting costs that destroy the customer proposition, the strategy has not cascaded.
If Operations prioritises efficiency while Marketing promises customisation, the strategy has not cascaded.
Alignment is not an abstract management concept.
It is the condition in which functions make decisions that reinforce the same strategic choices.
Strategy Requires Explicit Trade-Offs (Strategic Planning Perth)
One of the reasons Playing to Win remains valuable is that it refuses to allow strategy to become a list of universally desirable aspirations.
Every business would like:
higher revenue,
higher margin,
better customers,
better employees,
faster growth,
less risk,
more innovation.
But strategy asks:
Which of these matter most, in which markets, and through what specific choices?
Trade-offs are uncomfortable.
They also create clarity.
You cannot always maximise:
customisation and efficiency,
premium service and lowest cost,
central control and local autonomy,
growth and cash conservation,
short-term earnings and long-term investment.
Leadership involves deciding which matters more.
That is why Fractional CEO Perth work often involves helping owners make choices they have delayed precisely because every option has consequences.
What Playing to Win Gets Right, and Where SMEs Need to Go Further (Strategic Planning Perth)
I regard Playing to Win as one of the better practical strategy books.
It gets several things particularly right.
Strategy Is About Choice
This may be its most important contribution.
Where to Play and How to Win Are Central
These two questions force commercial clarity.
Capabilities Must Support Strategy
The book rightly moves beyond aspiration into organisational capability.
Management Systems Matter
Execution is built into the framework rather than treated as an afterthought.
But SMEs Need to Add Several Things
The framework is not a complete management system.
SME owners also need to consider:
- Cash flow.
- Funding capacity.
- Governance.
- Key-person dependency.
- Succession.
- Risk.
- Owner objectives.
- Valuation.
- Family dynamics where relevant.
For a listed multinational, capital may be relatively accessible.
For a 25-person family business, one poor investment may threaten the company.
That difference matters.
So I would use Playing to Win as a strategy framework, not as the entire management architecture.
A Practical Playing to Win Framework for SME Owners (Strategic Planning Perth)
If I were applying the book in a small-to-medium business, I would use the following process.
Step 1, Define Winning
What does success look like over three to five years?
Step 2, Choose Where to Play
Define:
customers,
geography,
products,
channels,
segments.
Step 3, Define How to Win
Why should the chosen customer prefer you?
Step 4, Identify Critical Capabilities
What must the business be exceptionally good at?
Step 5, Identify Strategic Assets
What resources, relationships, technology, brand or intellectual property support the strategy?
Step 6, Build Management Systems
What KPIs, meetings, incentives and reports reinforce the strategy?
Step 7, Define What You Will Not Do
Make the exclusions explicit.
Step 8, Stress-Test the Choices
Ask:
What assumptions are we making?
What could invalidate them?
Step 9, Cascade the Strategy
Ensure managers can explain it.
Step 10, Review Quarterly
Strategy should be stable enough to guide action but flexible enough to respond to evidence.
Practical Recommendations for SME Owners & Leaders (Strategic Planning Perth)
- Stop calling every plan a strategy.
- Define what winning means for your business.
- Choose the customer segments you most want to serve.
- Identify markets and services you will deliberately avoid.
- Write one clear sentence explaining how you intend to win.
- Identify the five capabilities most critical to that strategy.
- Align KPIs and incentives with the strategy.
- Remove initiatives that do not support the strategic choices.
- Test whether your management team can explain the strategy consistently.
- Review whether your business model actually supports the strategy.
- Ensure sufficient capital and cash flow exist to execute the choices.
- Use Board and independent advisory challenge to test assumptions.
- Review strategy regularly, but do not change direction impulsively.
Key Takeaways
- Strategy is choice.
- A business plan is not automatically a strategy.
- Winning requires clarity about where to play and how to win.
- Strategy requires saying no.
- Capabilities must support competitive choices.
- Management systems must reinforce the strategy.
- Strategic choices must work together as an integrated system.
- Growth without strategic clarity can dilute competitive advantage.
- SMEs should combine Playing to Win with governance, financial discipline and risk management.
- A strong strategy should guide everyday decisions throughout the organisation.
Frequently Asked Questions About Playing to Win
Who wrote Playing to Win?
A.G. Lafley and Roger L. Martin wrote Playing to Win: How Strategy Really Works.
What is the main idea of Playing to Win?
The central idea is that strategy is an integrated set of choices designed to position an organisation to win.
What are the five strategic choices?
They are winning aspiration, where to play, how to win, required capabilities and supporting management systems. (Harvard Business Review)
Is Playing to Win relevant to SMEs?
Yes. The framework is particularly useful for SMEs because limited resources make strategic choice and focus even more important.
What does “where to play” mean?
It means choosing the markets, customer segments, geographies, products, services and channels where the business will compete.
What does “how to win” mean?
It means defining the basis on which customers will prefer your business over alternatives.
Why is strategy about saying no?
Because resources are finite. Choosing everything means prioritising nothing.
What capabilities are required to win?
They are the organisational skills and competencies needed to execute the chosen strategy.
What are management systems?
They include KPIs, incentives, reporting, meetings, budgets and governance mechanisms that support strategic execution.
Is strategic planning the same as strategy?
No. Strategy determines the choices. Planning organises how those choices will be implemented.
Can a business have too many strategic priorities?
Yes. Too many priorities usually weaken focus and execution.
Does Playing to Win address competitive advantage?
Yes. The framework strongly encourages leaders to define a clear and defensible how-to-win proposition.
How often should an SME review its strategy?
Quarterly strategic reviews are useful, with a deeper annual review, while avoiding constant impulsive changes.
What is the biggest mistake SMEs make with strategy?
Often, they confuse goals, budgets and projects with genuine strategic choices.
What is the most important lesson from Playing to Win?
Perhaps this:
If you cannot clearly explain where you will play and how you will win, you probably do not yet have a strategy.
Conclusion: If You Are Not Making Choices, You Are Not Doing Strategy (Strategic Planning Perth)
Playing to Win deserves its reputation as an important strategy book because it removes much of the unnecessary mystery surrounding strategy.
It reminds leaders that strategy is not fundamentally about:
complexity,
consulting language,
large planning documents,
or grand statements.
It is about choice.
Where will we play?
How will we win?
What must we be good at?
What systems will support those choices?
Those questions are simple.
Answering them well is not.
Throughout almost four decades of big corporate, being a start-up entrepreneur, and advising businesses across Australia and internationally, I have seen the same pattern repeatedly.
Businesses become stronger when leaders make choices.
They become weaker when leaders continually defer them.
At Standard Bank, meaningful transformation required choices around product range, distribution, organisational capability, market position, leadership and execution. The results were substantial, but the outcomes were the consequence of disciplined strategic decisions, not simply larger ambitions.
At Blue Horizon Global Asset Management, we confronted a very different strategic problem.
We were a relatively small new entrant competing against some of the largest and most established investment managers in the market.
We could not realistically replicate their brand awareness, balance sheets, technology or established distribution.
So we chose a different way to win.
We built strategic alliances and joint ventures with organisations including Invesco, ABSA Bank and Sanlam, created proprietary products and expanded distribution through partnerships rather than trying to build every strategic asset ourselves.
That is Playing to Win in practice.
Not:
“How do we become more like the large competitors?”
But:
“Given where we are, where should we play, and how can we win differently?”
That is the strategic question every SME owner should ask.
Because you do not need to be the biggest business in the market.
You do not need the largest budget.
You do not need the most employees.
But you do need clarity.
You need to know:
where you will compete,
why customers should choose you,
what capabilities matter,
what you will stop doing,
and how the organisation will execute consistently.
That is why Playing to Win is a book I would recommend strongly to SME owners and leadership teams.
It converts strategy from a theoretical exercise into a disciplined set of choices.
And perhaps its most important lesson can be reduced to one sentence:
If everything is a priority, nothing is strategic.
Call to Action
If your business has a strategic plan but your leadership team still struggles to explain where you will compete, how you will win and which capabilities matter most, it may be time to revisit the strategy itself.
As a Business Advisor Perth, Fractional CEO, Non-Executive Chairman and Coach & Mentor, I work with SME owners, Boards and leadership teams to develop clearer strategies, test assumptions, improve strategic alignment and convert strategic choices into disciplined execution.
Because successful strategy is not primarily about producing a better document.
It is about making better choices, then building the organisation capable of executing them.
