The Strategy Choice Cascade
Five interconnected choices that define a winning strategy for any organization
The Strategy Choice Cascade is a framework of five interrelated strategic questions that together define a complete strategy. The five choices are: a winning aspiration that sets direction, where to play that narrows the competitive field, how to win that defines competitive advantage, core capabilities that underpin the strategy, and management systems that support it all.
The cascade works as a reinforcing system where choices at the top set context for choices below, and choices at the bottom influence and refine choices above. Strategy is not a vision statement, a plan, or optimization of the status quo. It is an integrated set of choices that uniquely positions an organization to create sustainable advantage.
In larger organizations, the cascade nests across levels. A company-level cascade sets context for sector, category, and brand-level cascades. Even a frontline salesperson operates with her own cascade of choices. The framework applies to any organization regardless of size or sector.
The process is iterative, not linear. There is no checklist where you complete one box and move to the next. All five choices influence one another and must be considered together. The dynamic feedback loop between choices means you will revisit and revise as you go.
- Strategy is choice: an integrated set of choices that uniquely positions the firm to create sustainable advantage
- Winning should be at the heart of any strategy, not merely playing or participating
- The five choices form a reinforcing cascade, not a sequential checklist
- Strategy must be iterative: all five choices influence one another and must be revisited together
- Every level of the organization has its own strategic choice cascade
- Far too few companies have a clear, choiceful, and compelling winning strategy in place
- Strategy requires making explicit choices to do some things and not others
- Closing off possibilities by making choices frees you to focus on what matters
- 1. Define Your Winning AspirationSet the frame for all other choices by defining what winning means for your organization. Aspirations are statements about the ideal future that translate the abstract concept of winning into defined goals. They should be ambitious enough to inspire but specific enough to guide subsequent choices. Include specific benchmarks that measure progress toward the aspirations.Pro tipSketch a prototype of your winning aspiration rather than dwelling on perfecting it. You will return to refine it once the rest of the cascade takes shape.WarningAspirations alone are not strategy. A vision or mission statement without concrete where-to-play and how-to-win choices is one of the most common strategy traps.
- 2. Determine Where to PlayNarrow the competitive field by choosing which markets, customers, channels, product categories, and vertical stages you will compete in. This is the set of choices that defines your strategic playing field. No company can be all things to all people and still win. Consider geographies, demographic segments, channels, product lines, and where in the value chain you will participate.Pro tipAsk what is core to your organization. Focus on core brands, geographies, channels, technologies, and consumers as a platform for growth before extending into adjacent areas.WarningDo not attempt to capture all consumer, channel, geographic, or category segments at once. This something-for-everyone approach prevents you from creating real value anywhere.
- 3. Determine How to WinDefine the choices for winning on your chosen playing field. This is not how to win generally, but how to win within your chosen where-to-play domains. Determine what will enable you to create unique value and sustainably deliver it to customers in a way that is distinct from competitors. The how-to-win choice must fit with and reinforce the where-to-play choice.Pro tipWhere-to-play and how-to-win choices must be considered together. No how-to-win approach is appropriate for all where-to-play choices. In great strategies, these two choices fit together to make the company stronger.WarningDo not define strategy as following best practices or benchmarking competitors. Sameness is not strategy. It is a recipe for mediocrity.
- 4. Build Core CapabilitiesIdentify the map of activities and competencies that critically underpin your where-to-play and how-to-win choices. These are the capabilities you must have in place to execute your strategy. In isolation, each capability may be strong but insufficient. The way capabilities work together and reinforce each other is what generates enduring competitive advantage.Pro tipLook for a reinforcing activity system where capabilities strengthen one another. A great innovation capability combined with strong brand building and global distribution creates a combination that is hard for competitors to match.WarningDo not stop at defining capabilities in the abstract. You may need to deepen existing capabilities and build entirely new ones to support forward-looking strategic choices.
- 5. Design Management SystemsCreate the systems that foster, support, and measure the strategy. These systems must be purposefully designed to support the choices and capabilities. They should ensure choices are communicated throughout the organization, employees are trained to deliver on choices, plans invest in and sustain capabilities over time, and progress toward aspirations is measured.Pro tipThis is the most neglected box in the cascade. Without supporting systems and measures, even brilliant strategic choices will fail to translate into action.WarningDo not treat management systems as static. As strategy evolves, systems must evolve too. Every system should be regularly assessed for whether it still supports the current strategic choices.
P&G used the Strategy Choice Cascade to transform a fading Oil of Olay brand into a multi-billion dollar powerhouse. The winning aspiration was market share leadership and one billion dollars in sales. Where to play was a new masstige segment in mass retail channels targeting women aged thirty-five-plus. How to win was through genuinely superior anti-aging products, powerful marketing, and partnerships with mass retailers to create prestige-like experiences. Core capabilities included consumer insights, innovation, brand building, and retailer partnerships. Management systems included talent development, tracking systems for consumer response, and innovation team structures.
At the company level, P&G defined winning as delivering the most valuable brands in every category it competed in. Where to play focused on three choices: grow from core businesses, extend into beauty and personal care, and expand into emerging markets. How to win was through consumer understanding, brand building, innovation, go-to-market partnerships, and global scale. These five core capabilities reinforced one another to create a combination competitors could not easily match.
The Strategy Choice Cascade grew out of the strategy practice at Monitor Company and became the standard process at Procter and Gamble during its transformation between 2000 and 2009 under CEO A.G. Lafley with strategy advisor Roger Martin. Over the course of that decade, the framework was applied across a wide range of businesses, geographies, and functions at P&G, demonstrating how strategic choices at every level of an organization can create sustainable competitive advantage. Intellectual influences included Michael Porter, Peter Drucker, and Chris Argyris.