Ag Lafley Quotes

The heart of strategy is the answer to two fundamental questions: where will you play, and how will you win there?

When a strategy succeeds, it seems a little like magic, unknowable and unexplainable in advance but obvious in retrospect. It isn’t. Really, strategy is about making specific choices to win in the marketplace.

Strategy needn’t be mysterious. Conceptually, it is simple and straightforward. It requires clear and hard thinking, real creativity, courage, and personal leadership.

a strategy is a coordinated and integrated set of five choices: a winning aspiration, where to play, how to win, core capabilities, and management systems.

Two questions flow from and support the heart of strategy: (1) what capabilities must be in place to win, and (2) what management systems are required to support the strategic choices?

every line of business and function should have a strategy—one that aligns with the strategy of the company overall and decides where to play and how to win specifically for its context.

When a company sets out to participate, rather than win, it will inevitably fail to make the tough choices and the significant investments that would make winning even a remote possibility.

Where to play selects the playing field; how to win defines the choices for winning on that field. It is the recipe for success in the chosen segments, categories, channels, geographies, and so on. The how-to-win choice is intimately tied to the where-to-play choice. Remember, it is not how to win generally, but how to win within the chosen where-to-play domains.

In short, strategy is choice. More specifically, strategy is an integrated set of choices that uniquely positions the firm in its industry so as to create sustainable advantage and superior value relative to the competition.

The most powerful aspirations will always have the consumer, rather than the product, at the heart of them.

Winning means providing a better consumer and customer value equation than your competitors do, and providing it on a sustainable basis.

Six Strategy Traps 1) The do-it-all strategy: failing to make choices, and making everything a priority. Remember, strategy is choice. 2) The Don Quixote strategy: attacking competitive "walled cities" or taking on the strongest competitor first, head-to-head. Remember, where to play is your choice. Pick somewhere you can have a choice to win. 3) The Waterloo Strategy: starting wars on multiple fronts with multiple competitors at the same time. No company can do everything well. If you try to do so, you will do everything weakly. 4) The something-for-everyone strategy: attempting to capture all consumer or channel or geographic or category segments at once. Remember, to create value, you have to choose to serve some constituents really well and not worry about the others. 5) The dreams-that-never-come-true strategy: developing high-level aspirations and mission statements that never get translated into concrete where-to-play and how-to-win choices, core capabilities, and management systems. Remember that aspirations are not strategy. Strategy is the answer to all five questions in the choice cascade. 6) The program-of-the-month strategy: settling for generic industry strategies, in which all competitors are chasing the same customers, geographies, and segments in the same way. The choice cascade and activity system that supports these choices should be distinctive. The more your choices look like those of your competitors, the less likely you will ever win.

Six Telltale Signs of a Winning Strategy 1) An activity system that looks different from any competitor's system. It means you are tempting to deliver value in a distinctive way. 2) Customers who absolutely adore you, and noncustomers who can't see why anybody would buy from you. This means you have been choiceful. 3) Competitors who make a good profit doing what they are doing. It means your strategy has left where-to-play and how-to-win choices for competitors, who don't need to attack the heart of your market to survive. 4) More resources to spend on an ongoing basis than competitors have. This means you are winning the value equation and have the biggest margin between price and costs and best capacity to add spending to take advantage of an opportunity to defend your turf. 5) Competitors who attack one another, not you. It means that you look like the hardest target in the (broadly defined) industry to attack. 6) Customers who look first to you for innovations, new products, and service enhancement to make their lives better. This means that your customers believe that you are uniquely positioned to create value for them.

Mission and vision statements are elements of strategy, but they aren’t enough. They offer no guide to productive action and no explicit road map to the desired future. They don’t include choices about what businesses to be in and not to be in. There’s no focus on sustainable competitive advantage or the building blocks of value creation.

An activity system is of no value unless it supports a particular where-to-play and how-to-win choice.

Roger Martin and A.G. Lafley, Playing to Win

But it is only through making and acting on choices that you can win. Yes, clear, tough choices force your hand and confine you to a path. But they also free you to focus on what matters.

A strategy discussion is not an idea review. A strategy discussion is not a budget or a forecast review. A strategy discussion is how we are going to accomplish our growth objectives in the next three to five years.

It is far better to ask what your competitors will likely do before you proceed than to simply wait and see what happens. Only strategies that provide a sustainable advantage—or a significant lead in developing future advantages—are worth investing in.

Where-to-play choices occur across a number of domains, notably these: Geography. In what countries or regions will you seek to compete? Product type. What kinds of products and services will you offer? Consumer segment. What groups of consumers will you target? In which price tier? Meeting which consumer needs? Distribution channel. How will you reach your customers? What channels will you use? Vertical stage of production. In what stages of production will you engage? Where along the value chain? How broadly or narrowly?

A strategy is a coordinated and integrated set of where-to-play, how-to-win, core capability, and management system choices that uniquely meet a consumer’s needs, thereby creating competitive advantage and superior value for a business. Strategy is a way to win—and nothing less.

Many companies like to describe themselves as winning through operational effectiveness or customer intimacy. These sound like good ideas, but if they don’t translate into a genuinely lower cost structure or higher prices from customers, they aren’t really strategies worth having.

When thinking about capabilities, you may be tempted to simply ask what you are really good at and attempt to build a strategy from there. The danger of doing so is that the things you’re currently good at may actually be irrelevant to consumers and in no way confer a competitive advantage. Rather than starting with capabilities and looking for ways to win with those capabilities, you need to start with setting aspirations and determining where to play and how to win. Then, you can consider capabilities in light of those choices. Only in this way can you see what you should start doing, keep doing, and stop doing in order to win.

Who really is your best competitor? More importantly, what are they doing strategically and operationally that is better than you? Where and how do they outperform you? What could you learn from them and do differently?” Looking at the best competitor, no matter which company it might be, provides helpful insights into the multiple ways to win.

Focus is a crucial winning attribute. Attempting to be all things to all customers tends to result in underserving everyone. Even the strongest company or brand will be positioned to serve some customers better than others. If your customer segment is “everyone” or your geographic choice is “everywhere,” you haven’t truly come to grips with the need to choose.

Strategy can seem mystical and mysterious. It isn't. It is easily defined. It is a set of choices about winning. Again, it is an integrated set of choices that uniquely positions the firm in its industry so as to create sustainable advantage and superior value relative to the competition. Specifically, strategy is the answer to these five interrelated questions: 1. What is your winning aspiration? The purpose of your enterprise, its motivating aspiration. 2. Where will you play? A playing field where you can achieve that aspiration. 3. How will you win? The way you will win on the chosen playing field. 4. What capabilities must be in place? The set and configuration of capabilities required to win in the chosen way. 5. What management systems are required? The systems and measures that enable the capabilities and support the choices. These choices and the relationship between them can be understood as a reinforcing cascade, with the choices at the top of the cascade setting the context for the choices below, and choices at the bottom influencing and refining the choices above.

Porter noted that powerful and sustainable competitive advantage is unlikely to arise from any one capability (e.g., having the best sales force in the industry or the best technology in the industry), but rather from a set of capabilities that both fit with one another (i.e., that don’t conflict with one another) and actually reinforce one another (i.e., that make each other stronger than they would be alone).

If aspirations are to be achieved, capabilities developed, and management systems created, progress needs to be measured. Measurement provides focus and feedback. Focus comes from an awareness that outcomes will be examined, and success or failure noted, creating a personal incentive to perform well. Feedback comes from the fact that measurement allows the comparison of expected outcomes with actual outcomes and enables you to adjust strategic choices accordingly.

Choosing where to play is also about choosing where not to play. This is more straightforward when you are considering where to expand (or not), but considerably harder when considering if you should stay in the places and segments you currently serve. The status quo—continuing on in the locations and segments you’ve always been—is all too often an implicit, unexamined choice. Simply because you have made a given where-to-play choice in the past is not a reason to stay there.

Self-Management If you can read just one book on motivation—yours and others: Dan Pink, Drive If you can read just one book on building new habits: Charles Duhigg, The Power of Habit If you can read just one book on harnessing neuroscience for personal change: Dan Siegel, Mindsight If you can read just one book on deep personal change: Lisa Lahey and Bob Kegan, Immunity to Change If you can read just one book on resilience: Seth Godin, The Dip Organizational Change If you can read just one book on how organizational change really works: Chip and Dan Heath, Switch If you can read just two books on understanding that change is a complex system: Frederic Laloux, Reinventing Organizations Dan Pontefract, Flat Army Hear interviews with FREDERIC LALOUX, DAN PONTEFRACT, and JERRY STERNIN at the Great Work Podcast. If you can read just one book on using structure to change behaviours: Atul Gawande, The Checklist Manifesto If you can read just one book on how to amplify the good: Richard Pascale, Jerry Sternin and Monique Sternin, The Power of Positive Deviance If you can read just one book on increasing your impact within organizations: Peter Block, Flawless Consulting Other Cool Stuff If you can read just one book on being strategic: Roger Martin and A.G. Lafley, Playing to Win If you can read just one book on scaling up your impact: Bob Sutton and Huggy Rao, Scaling Up Excellence If you can read just one book on being more helpful: Edgar Schein, Helping Hear interviews with ROGER MARTIN, BOB SUTTON, and WARREN BERGER at the Great Work Podcast. If you can read just two books on the great questions: Warren Berger, A More Beautiful Question Dorothy Strachan, Making Questions Work If you can read just one book on creating learning that sticks: Peter Brown, Henry Roediger and Mark McDaniel, Make It Stick If you can read just one book on why you should appreciate and marvel at every day, every moment: Bill Bryson, A Short History of Nearly Everything If you can read just one book that saves lives while increasing impact: Michael Bungay Stanier, ed., End Malaria (All money goes to Malaria No More; about $400,000 has been raised so far.) IF THERE ARE NO STUPID QUESTIONS, THEN WHAT KIND OF QUESTIONS DO STUPID PEOPLE ASK?

To make good choices, you need to make sense of the complexity of your environment. The strategy logic flow can point you to the key areas of analysis necessary to generate sustainable competitive advantage. First, look to understand the industry in which you play (or will play), its distinct segments and their relative attractiveness. Without this step, it is all too easy to assume that your map of the world is the only possible map, that the world is unchanging, and that no better possibilities exist. Next, turn to customers. What do channel and end consumers truly want, need, and value-and how do those needs fit with your current or potential offerings? To answer this question, you will have to dig deep-engaging in joint value creation with channel partners and seeking a new understanding of end consumers. After customers, the lens turns inward: what are your capabilities and costs relative to the competition? Can you be a differentiator or a cost leader? If not, you will need to rethink your choices. Finally, consider competition; what will your competitors do in the face of your actions? Throughout the thinking process, be open to recasting previous analyses in light of what you learn in a subsequent box. The basic direction of the process is from left to right, but it also has interdependencies that require a more flexible path through it.

strategies that allow it to command price premiums.

Roger Martin and A.G. Lafley’s Playing to Win.

no company can be all things to all people and still win, so it is important to understand which where-to-play choices will best enable the company to win.

Leveraging the familiar, even as you reinvent.

Specifically, strategy is the answer to these five interrelated questions: What is your winning aspiration? The purpose of your enterprise, its motivating aspiration. Where will you play? A playing field where you can achieve that aspiration. How will you win? The way you will win on the chosen playing field. What capabilities must be in place? The set and configuration of capabilities required to win in the chosen way. What management systems are required? The systems and measures that enable the capabilities and support the choices.

as every good marketer knows, awareness precedes trial.

The plan was to remake Oil of Olay—its brand, its business model, its package and product, its value proposition, and even its name.

experiencing shopping as a consumer would. Nothing else would have worked without those insights. Second, Clay Street is about building a team totally driven by the

They define strategy as following best practices. Every industry has tools and practices that become widespread and generic. Some organizations define strategy as benchmarking against competition and then doing the same set of activities but more effectively. Sameness isn’t strategy. It is a recipe for mediocrity.

To determine how to win, an organization must decide what will enable it to create unique value and sustainably deliver that value to customers in a way that is distinct from the firm’s competitors. Michael Porter called it competitive advantage—the specific way a firm utilizes its advantages to create superior value for a consumer or a customer and in turn, superior returns for the firm.

First, there would be no presentation, only a discussion of the strategic issues agreed on in advance. Second, we limited the number of folks in the room, down from twenty-five to just four or five from the business plus the CEO and the corporate leaders who would bring specific experience or knowledge on the strategy issue. Third, participants would not be allowed to bring more than three new pages of material to the meeting to share—we did not want the participants to race off and create yet another PowerPoint deck with answers to the questions raised in the letter.

The first of these questions, the capabilities choice, relates to the range and quality of activities that will enable a company to win where it chooses to play. Capabilities are the map of activities and competencies that critically underpin specific where-to-play and how-to-win choices.

strategy is the answer to these five interrelated questions: What is your winning aspiration? The purpose of your enterprise, its motivating aspiration. Where will you play? A playing field where you can achieve that aspiration. How will you win? The way you will win on the chosen playing field. What capabilities must be in place? The set and configuration of capabilities required to win in the chosen way. What management systems are required? The systems and measures that enable the capabilities and support the choices.

Strategy needn’t be the purview of a small set of experts. It can be demystified into a set of five important questions that can (and should) be asked at every level of the business: What is your winning aspiration? Where should you play? How can you win there? What capabilities do you need? What management systems would support it all? These choices, which can be understood as a strategic choice cascade, can be captured on a single page. They can create a shared understanding of your company’s strategy and what must be done to achieve it.

A company must seek to win in a particular place and in a particular way. If it doesn’t seek to win, it is wasting the time of its people and the investments of its capital providers.

A strategy that only works if competitors continue to do exactly what they are already doing is a dangerous strategy indeed.

What matters is winning. Great organizations—whether companies, not-for-profits, political organizations, agencies, what have you—choose to win rather than simply play. What is the difference between the Mayo Clinic and the average research hospital in your neighborhood? Your local hospital is, most likely, focused on providing a service and on doing good. The Mayo Clinic, though, sets out to transform the world of medicine, to be at the vanguard of medical research, and to win. And it does.

Aspirations are statements about the ideal future. At a later stage in the process, a company ties to those aspirations some specific benchmarks that measure progress toward them.

Young had to change the game-by literally giving his software away via free download-to achieve dominant market share and become credible to corporate information technology (IT) departments. In that case, Young decided where to play and how to win, and then built the rest of his strategy (earning revenue from service rather than software sales) around these two choices. The result was a billion dollar company with a thriving enterprise business.

Aspirations can be refined and revised over time. However, aspirations shouldn't change day to day; they exist to consistently align activities within the firm, so should be designed to last for some time.

To win with Olay in mass, the company had to bridge the mass and prestige markets, creating what it would come to call a masstige category. Olay needed to shift the perception of beauty care in the mass channel, selling higher-end, more prestigious products in a traditionally high-volume environment. It needed to attract consumers from both the mass and the prestige channels. To do so, the product itself was only a part of the battle; Olay also needed to shift consumer perception of the brand and channel through its positioning, packaging, pricing, and promotions.

Baby care in Asia, for instance, made great sense-since, for the foreseeable future, most of the world's babies would be born in Asia.

Winning is what matters—and it is the ultimate criterion of a successful strategy.

when it came to where to play, the company needed to define which regions, categories, channels, and consumers would give P&G a sustainable competitive advantage.

devotees.

First, Olay needed to convince skin-care-savvy women that the new Olay products were just as good as, or better than, higher-priced competitors. It began with advertising in the same magazines and on the same television shows as those populated by the more expensive brands; the idea was to put Olay into the same category in the consumer’s mind.

They had a clear and defined approach to strategy, a thinking process that enabled individual managers to effectively make clearer and harder choices. That process, and the approach to strategy that underpins it, is what made the difference.

It chooses to play in its own retail stores, with athletic wear for women. It decides to win on the basis of performance and style. It creates yoga gear that is both technically superior (in terms of fit, flex, wear, moisture wicking, etc.) and utterly cool. It turns over its stock frequently to create a feeling of exclusivity and scarcity. It draws customers into the store with staff members who have deep expertise. It defines a number of capabilities essential to winning, like product and store design, customer service, and supply-chain expertise.

Una estrategia es un conjunto coordinado e integrado de decisiones sobre dónde jugar, cómo ganar, sobre cuál es la capacidad esencial y sobre cuál es el sistema de gestión, destinadas a satisfacer perfectamente las necesidades de un consumidor, creando una ventaja competitiva y aumentando el valor para el negocio. La estrategia es una forma de ganar. Fin de la película.

The desire to win spurs a helpfully competitive mind-set, a desire to do better whenever possible.

It can be easy to dismiss new and different where-to-play choices as risky, as a poor fit with the current business, or as misaligned with core capabilities. And it is just as easy to write off an entire industry on the basis of the predominant where-to-play choices made by the competitors in that industry. But sometimes, you must dig a bit deeper—to examine unexpected where-to-play choices from all sides—to truly understand what is possible and how an industry can be won with a new place to play.

For Porter, a company’s “strategic position is contained in a set of tailored activities designed to deliver it.”9 He calls the visual depiction of this set of activities an activity system. Since “competitive strategy is about being different … [and] means deliberately choosing a different set of activities to deliver unique value,” an activity system must also be distinctive from the activity systems of competitors.10

each unit must have an activity system that supports its choices, a system that is informed by the corporate-level map. In other words, layers of capabilities occur throughout the organization, and the activity systems look at least a little different in different parts of the company.

For a corporation to have a chance of delivering greater value together than the units could individually, there must be some core activities in common—both among businesses in the portfolio and between those businesses and the company overall. It is essential that all of the systems have at least some capabilities and activities that line up with the core capabilities of the organization. These shared capabilities—the ones that run through multiple divisions or units and the organization overall—create reinforcing rods that link different parts of the organization together, just as steel reinforcing rods run from floor to floor in a concrete building to keep it standing (figure 5-2). These reinforcing rods help drive strategy forward at all levels.

Since aggregation inevitably creates costs (financial and administrative) that wouldn’t exist if the indivisible activity systems existed as separate businesses, the strategy at all levels of aggregation must contribute a countervailing benefit to those below, somehow improving their competitiveness.

Big, profitable brands such as Folgers and Pringles had to go because they were not going to benefit from company reinforcement enough to sustain competitive advantage over the long term. Both had built strong brands, but had limited opportunity for product innovation within P&G’s mass channels of distribution.

From the where-to-play and how-to-win choices follows the next question: what capabilities are required to deliver on that strategy? To understand and visualize those capabilities, you will find it helpful to prepare an activity system based on the strategy. An activity system captures the most important activities of the organization in a single visual representation. The large nodes of the map are the core capabilities, while the smaller nodes are the activities that support those core capabilities.

It went from a formal presentation (by the business to management) to a dialogue focused on a very few critical strategic issues identified in advance.

The culture-busting kickers were threefold. First, there would be no presentation, only a discussion of the strategic issues agreed on in advance. Second, we limited the number of folks in the room, down from twenty-five to just four or five from the business plus the CEO and the corporate leaders who would bring specific experience or knowledge on the strategy issue. Third, participants would not be allowed to bring more than three new pages of material to the meeting to share—we did not want the participants to race off and create yet another PowerPoint deck with answers to the questions raised in the letter. We genuinely wanted to have a conversation about the key strategic issues in the business.

the presidents came to understand that they wouldn’t be judged on whether they had every aspect of their strategy buttoned up but rather on whether they could engage in a productive conversation about the real strategic issues in their business. As a result, P&G leaders began to do more strategic thinking, to have more strategic conversations—not just at strategy reviews, but in the normal course of business—and the quality of strategic discourse improved. More importantly, the company saw better choice making, more willingness to make hard calls, and eventually better business results.

In any conversation, organizational or otherwise, people tend to overuse one particular rhetorical tool at the expense of all the others. People’s default mode of communication tends to be advocacy—argumentation in favor or their own conclusions and theories, statements about the truth of their own point of view.

The kind of dialogue we wanted to foster is called assertive inquiry.

In any organization, the choices at the top must be precisely and evocatively stated, so that they are easily understood.

Every company needs systems to support the building and maintenance of its key capabilities.

For measures to be effective, it is crucial to indicate in advance what the expected outcomes are. Be explicit: “The following aspiration, where to play, how to win, capabilities, and management systems should produce the following specific outcomes.” Expected outcomes should be noted in writing, in advance. Specificity is crucial.

P&G switched from market TSR to operating TSR. Operating TSR is an amalgamated measure of three real operating performance measures—sales growth, profit margin improvement, and increase in capital efficiency. This measure more accurately captures P&G’s true performance across the most critical operational metrics and, moreover, measures things that business-unit presidents and general managers can actually influence, unlike the market-based TSR number. The operating TSR measure integrates revenue growth, margin growth, and cash productivity and it does so regardless of the type of assets being managed—whether you have hard assets like tissue/towel paper converting machines or inventory like cosmetics and fragrance products. In other words, the measure could be equitably and usefully applied to all of P&G’s diverse businesses. And it isn’t utterly unconnected to stock performance—there is a high correlation over the medium and long term between operating TSR and market TSR. But unlike the stock price, the operating TSR measures are ones over which P&G managers have real influence in the short and medium term.

The final strategic choice in the cascade focuses on management systems. These are the systems that foster, support, and measure the strategy. To be truly effective, they must be purposefully designed to support the choices and capabilities. The types of systems and measures will vary from choice to choice, capability to capability, and company to company. In general, though, the systems need to ensure that choices are communicated to the whole company, employees are trained to deliver on choices and leverage capabilities, plans are made to invest in and sustain capabilities over time, and the efficacy of the choices and progress toward aspirations are measured.

They use entirely internal measures of progress and success—patents, technical achievements, and the like—without stepping back to consider the needs of consumers and the changing marketplace or asking what business they are really in, which consumer need they answer, and how best to meet that need.

The essence of great strategy is making choices—clear, tough choices, like what businesses to be in and which not to be in, where to play in the businesses you choose, how you will win where you play, what capabilities and competencies you will turn into core strengths, and how your internal systems will turn those choices and capabilities into consistently excellent performance in the marketplace. And it all starts with an aspiration to win and a definition of what winning looks like.

I have found that most leaders do not like to make choices. They’d rather keep their options open. Choices force their hands, pin them down, and generate an uncomfortable degree of personal risk. I’ve also found that few leaders can truly define winning. They generally speak of short-term financial measures or a simple share of a narrowly defined market.

But even the largest companies must make explicit choices to compete in some places, with some products, for some customers (and not in others). A choice to serve everyone, everywhere—or to simply serve all comers—is a losing choice.

could you configure your capabilities to enable your company to meet the needs of customers in a distinctively valuable way, underpinning a potential differentiation strategy? Or, at a minimum, could you configure your capabilities to enable the company to match competitors in meeting the needs of customers, underpinning a potential cost-leadership strategy? In other words, how could your capabilities be configured to translate to a measurable, sustainable competitive advantage?

The other half of an analysis of relative position relates to cost and the degree to which the organization can achieve approximate cost parity with competitors or distinctly lower costs than competitors.

Or, does it have a scale advantage, a learning-curve advantage, a proprietary process, or a technology that enables it to have a superior cost position?

is there some competitive response that could undermine or trump the where-to-play and how-to-win choices?

The strategy logic flow can point you to the key areas of analysis necessary to generate sustainable competitive advantage. First, look to understand the industry in which you play (or will play), its distinct segments and their relative attractiveness.

Next, turn to customers. What do channel and end consumers truly want, need, and value—and how do those needs fit with your current or potential offerings?

After customers, the lens turns inward: what are your capabilities and costs relative to the competition? Can you be a differentiator or a cost leader?

Finally, consider competition; what will your competitors do in the face of your actions?

Since the goal is for everyone to buy in, weak compromises are made instead of real, hard choices. Creativity is discouraged; the pressure to converge on an answer on the basis of existing data eliminates the possibilities that are off the mainstream path. The buy-in process is long and tedious, yet it often results in only the appearance of concurrence, followed by foot-dragging by those who never truly bought in. And senior management is engaged only at the end of the process, after the strategy is buttoned up, which means that these leaders’ experience, insights, and ideas are barely taken into account (if at all). In all, it is a painful and unproductive process that produces few powerful choices. No wonder managers have little enthusiasm for the strategy process.

Asking a single question can change everything: what would have to be true? This question helpfully focuses the analysis on the things that matter. It creates room for inquiry into ideas, rather than advocacy of positions. It encourages a broader consideration of more options, particularly unpredictable ones. It provides room to explore ideas before the team settles on a final answer.

By turning instead to exploring what would have to be true, teams go from battling one another to working together to explore ideas. Rather than attempting to bury real disagreements, this approach surfaces differences and resolves them, resulting in more-robust strategies and stronger commitment to them.

Framing the issue as a choice identifies a preliminary set of options for resolving the problem; the next task is to broaden the list of possibilities. The objective in this step is to be inclusive rather than restrictive of the number and diversity of possibilities on the table. Here is the opportunity to encourage creative and more-unexpected strategies. In this context, a possibility should be expressed as a narrative or scenario, a happy story that describes a positive outcome. That is why we like to call them possibilities rather than options.

Possibilities should be welcomed at this stage, not thoroughly vetted for inclusion. Suggested possibilities should never be trivialized or dismissed, lest that discourage the inclusion of more out-of-the-box ideas in the consideration set. Within the group, there must be a fundamental commitment to openness, such that if any member of the group feels that a given possibility is worth exploring, it should automatically be included in the choice set. Culling a possibility about which a particular individual feels strongly may well cause that individual to withdraw, perhaps for the rest of the process. So inclusion, rather than exclusion, is the rule at this stage.

Once a diverse set of possibilities is established, the team then needs to reverse engineer the logic of each possibility. That is, it needs to specify what must be true for the possibility to be a terrific choice. Notice, this step is decidedly not for arguing about what is true, but rather for laying out the logic of what would have to be true for the group to collectively commit to a choice.

The difference between the two approaches cannot be overstated. In a standard strategy discussion, skeptics attack ideas as vigorously as possible to knock options out of contention, and defenders parry the arguments to protect pet options. Tempers rise, statements get more extreme, and relationships are strained. Meanwhile, little new or helpful information emerges. If instead the dialogue is about what would have to be true, then the skeptic can say, “For me to be confident in this possibility, we would have to know that consumers would respond in the following way.” This is a very different sort of statement than “That option will never work!

This process is a form of reverse engineering because the starting point is the (tentative) assumption that the conclusion is valid—namely, that this is a great possibility. The team then works to understand the conditions under which that assumption is correct. It works backward to declare the various conditions that would have to hold for this to be a great possibility.

At this reverse-engineering stage, there is absolutely no interest in opinions as to whether the conditions pertaining to a given possibility are true. In fact, expressing such opinions is counterproductive.

There is no ownership of possibilities by individuals, lest the process derail.