PTW/PI All-Stars Book Club – Chapter Four
Decoding the Strategy Choice Cascade
Welcome to Chapter Four of the Playing to Win/Practitioner Insights (PTW/PI) book club. Again, in the spirit of a book club discussion, I have responded to all comments and will continue to attempt to do so. Of the 37 all-star pieces out of the 260 in the series, the randomizer picked as fourth chapter Decoding the Strategy Choice Cascade. This one is from the biggest category – practical advice on an element of either the Strategy Choice Cascade (SCC) or Strategic Choice Structuring Process (SCSP). You can find the whole PTW/PI series here.
My Reflections
This was the first and only PTW/PI piece dedicated entirely to an array of reader questions. Many other pieces addressed a single question from a reader or client. But this piece worked through a whole list of them. When I did the readership statistics, the piece turned out to be very popular. And this piece, which answered reader questions, generated still more questions, which I will discuss in the second section below. Net, I probably should have done more of pieces like this one. Live and learn!
The original piece tackled three clusters of reader questions.
1) Questions about the number of boxes.
Why are there five boxes in the SCC? Isn’t strategy just the first three (Winning Aspiration (WA), Where-to-Play (WTP) and How-to-Win (HTW) and execution the last two (Must-Have Capabilities (MHC) and Enabling Management Systems (EMS))?
Sorry, you need all five boxes. In fact, one of the biggest problems in the practice of strategy is seeing it as only the first three boxes. That is, the prevailing view is that the first three boxes are true job of senior management and more junior people can follow up the strategy exercise by doing the less important work of filling in the last two boxes. That profoundly arrogant view enables senior management to blame ‘bad execution’ for their failed strategies. Worse still, it is self-defeating in that it produces failing strategies by not performing the reality check on strategy: can we create the MHC and EMS necessary to win where we have chosen to play? That is a question that must be asked before locking and loading on the first three boxes, not as some kind of afterthought! I never let arrogant senior management off the hook by blaming ‘execution.’ I blame them for crappy, incomplete strategies that miss the last two boxes.
If you find five to be too many boxes, you can group the five and think of the SCC as having three elements: the Motivation for Strategy; the Heart of Strategy; and the Reality Check on Strategy.
The Motivation for Strategy is the WA, the reason for wanting to pursue the strategy and the standard by which you will judge success.
The Heart of Strategy is the matched pair of WTP and HTW. It is impossible to have a great strategy without a great Heart. And WTP and HTW need to be a matched pair. The more they are considered separately, the weaker the resulting strategy will be.
The Reality Check on Strategy determines whether your Heart of Strategy is worth a damn. The WTP/HTW pair is only useful to the extent that you have both the MHC to deliver the WTP/HTW and the EMS necessary to both build those MHC and maintain them on an ongoing basis. Importantly, the MHC must pass the ‘can’t/won’t test’ for the strategy to have any sustainability.
I have used the SCC since 1995 and haven’t changed it because I can’t find a better way to array the strategy task. I have changed the words a bit. Under the always helpful influence of AG Lafley, I changed the first box from Aspirations & Goals to Winning Aspiration. And more recently, I have expanded the descriptions in the last two boxes from Capabilitiesto Must-have Capabilities and from Management Systems to Enabling Management Systems, respectively.
The constancy of the SCC is not because I am resistant to change. My process tool, the SCSP, has changed a lot, as I have documented earlier in the series. It even changed during the five years of the PTW/PI series.
2) Questions about the order of the boxes
There are always questions about the order of the boxes, for example, why WTP is before HTW and not the other way around?
Readers tend to obsess about box order and I wish they wouldn’t. I believe the obsession stems from two factors. First, they think that the methodology ordains that they must work their way down the cascade from upper left to lower right. Second, they think that is how I do it.
Neither is correct. The ordering of the five boxes is based on level of abstraction from the greatest level of abstraction to the greatest level of concreteness. And to be clear, more abstract is not better! Sometimes more is too much. That is why I don’t spend much time on WA up front – sometimes none at all. I often start with the Heart of Strategy (WTP/HTW) and toggle back to WA to see if there is a credible WA that fits with a Heart of Strategy possibility.
To me the SCC is a logical structure that must be completed, not a series that must be stepped through. The overall key is to toggle back and forth across the five boxes. If you use the SCC unidirectionally, you will produce a bad strategy – guaranteed.
3) Questions about the shape of the diagram
Why is it not a circle? Why is it a downward stair-step? Isn’t this the strategy equivalent of the dreaded waterfall approach in software?
The fans of John Boyd (everybody who reads this book is/will be) want it to be a circle like Boyd’s famous OODA (Observe-Orient-Decide-Act) loop. But the SCC isn’t a loop because EMS doesn’t lead directly into WA (as Act does into Observe in the OODA loop). In contrast, the SCSP is indeed a circle because the last box – Choice – naturally begets the next generation of Problems to solve – the first box.
With respect to the waterfall questions, Agile people hate anything waterfall – their bête noir – and they tend to think the SCC looks like a waterfall. But it isn’t. There are feedback loops between each box. In a sense, it is anti-waterfall.
As I said above. I would love to make it better. But I have not found another way to describe the thinking that seems to work better.
Reader Comments
The biggest theme in the reader comments on Decoding the Strategy Choice Cascade was on the toggling point. As I typically say in my speeches, the need to toggle back and forth so that the five choices fit with and reinforce one another is the only thing that makes strategy too hard for an average 11-year-old.
This need for fit and reinforcement was stated prominently in Playing to Win, but it goes so heavily against the fundamentally reductionist approach to modern education that I think users of the SCC framework have a hard time toggling. It runs against everything they have been taught, especially if they have gone to business school. Because it doesn’t feel at all natural to them, it makes strategy harder than it should be. It is not so much intellectually hard as it violates their educational indoctrination.
I was pleased to see in the comments lots of uptake and reflection on MHC/EMS and thinking of them as a pair, not unlike WTP/HTW.
There was one interesting comment on complexity. The reader pointed out that with five questions and individual connections between each of them, you have a decision with many possible combinations – so many that you can’t brute force it by running through all the possible combinations, or even a tiny fraction of then. That is a good observation! That is why you need to develop a personal heuristic for strategy, as I have argued previously in this series. That is why I say that in 45 years of watching, I have never seen a great natural strategist. I have only seen great strategists who have practiced intensively – and reflected on their practice.
Perhaps my favorite comment on Medium was from Phatala (that single name is all I know about her/him): “When Waterfall started, it was similarly understood that iterative validation was required. People practiced it incorrectly and then declared that it was broken.” What a classic story. And it is a favorite in the academic world: misrepresent a theory and then claim that the theory is invalid. Useless and stupid stuff.
Without further ado, the original article…
Chapter Four
This piece was spurred by a reader question about the order of the boxes in the Strategy Choice Cascade. It is one of many great questions I get about the structure and functioning of the five boxes in the Cascade that deserve answers. Hence, I am dedicating my 11th Year III Playing to Win Practitioner Insights (PTW/PI) piece to Decoding the Strategy Choice Cascade: Author Answers to Reader Questions. You can find the previous 121 PTW/PI here.
The Range of Questions
I get three kinds of questions about the Strategy Choice Cascade:
First are questions about the number of boxes. Why are there five boxes? Isn’t strategy the first three (Winning Aspiration (WA), Where-to-Play (WTP) and How-to-Win (HTW) and execution the last two (Must-Have Capabilities (MHC) and Enabling Management Systems (EMS))?
At first glance the SCC doesn’t look too complicated, but when you start integrating the 5 choices it quickly becomes complex. Which I like 😋
I also feel like this is something that will be more difficult for an AI tool to do, then the statistical approach to get to a “strategy” (list of goals, budgets and planning) that most people think about when trying to find a strategy.
When you try to find a good WTP/HTW combination. How much time do you spend looking at what competitors are doing? As in, how much emphasis do you give the competition in that phase?
Great reflections on the SCC Roger. So many business leaders need to learn it urgently.
I've seen for most business leaders that don´t know the SCC that when they start to use it break their minds, because they over the years are used to follow a model or a guide to do things.
When they finish their reflections on one box and start another one, if you tell them "you need to revise the previous one (or the next one) because they don't reinforce each other", they go like: whaaaat???? I need to revise the other ones?!... and the answer is: YES you need to do it!
Why business leaders are used to step models? guides to do things? Tips like models? Are business leaders becoming lazy to think? Are they getting used to social-media-seconds-videos for solving highly complex problems?
I think yes.
The pretext I hear always is: "I do this because I don't have time".