The Strategic Choice Cascade
To instill intellectual integrity throughout a company—as opposed to leaving its development to chance—some kind of explicit, ongoing decision-making process is needed. At Procter & Gamble, the method we used was known as the strategic choice cascade. Each year, we asked hundreds of company leaders, at all levels, to develop choices explicitly using this framework. The cascade consisted of five interdependent choices (see Exhibit). We said explicitly that none of these choices should be treated as “silver bullets” to solve short-range problems. Nor could they be made in isolation from each other.
The first choice is that of a winning aspiration. Winning matters. Without a competitive goal, it is easy to become complacent and settle for being “good enough.” Settling for good enough means failing to make the tough choices and do the hard work of building outstanding capabilities. At P&G, we chose, at the company-wide level, to meaningfully improve the lives of the world’s consumers and, by doing so, drive consistent double-digit profit growth. Articulating a winning aspiration was not a major stretch for most P&G leaders, given the company’s long history of attempting to achieve decisive product leadership across its many categories. Nonetheless, it was a message that warranted reinforcement.
Next come the choices of “Where will we play?” and “How will we win in our chosen markets?” These are the core choices, the heart of any strategy. Choosing where to play means choosing in which markets, for which customers, in which product lines, in which geographies you will compete. Choosing how to win means figuring out how to create a sustainable competitive advantage on a specific playing field. These choices can have integrity only when they fit together consistently; that is, when the how-to-win choice is made in the context of the where-to-play choice. At P&G, our where-to-play choices focused on a core group of brands, customers, and geographic markets. We would start with market leadership in the home, beauty, health, and personal-care sectors, and position for long-term growth in emerging economies. Our how-to-win choice was to build powerful consumer-focused brands that took advantage of ubiquitous distribution and global scale.
We rethought brand and product positioning in terms of where to play and how to win as well. For example, for the skin-care brand Olay, we shifted our where-to-play from women over 50 who were targeting wrinkles, to women age 35 to 50 who were fighting the first signs of aging, which we successfully characterized as “the seven signs of aging.” How would we compete to win with this new segment? By upgrading the active ingredient, transforming the packaging, and partnering with our mass retailers to create a “masstige” (mass-prestige) in-store experience that rivaled the prestige brands in department stores. The result was a fast-growing, high-profit brand that revitalized the category.
For household cleaning, we thought entirely differently about cleaning hard surfaces. We determined that there might be new cleaning jobs around the home not served by existing products. Rather than continue to focus on well-served areas like countertops and sinks, we turned to floor cleaning. There, we pioneered an entirely new category, a new way to win in household cleaning, with the Swiffer electrostatic mop. Subsequently, with our Mr. Clean brand, the key where-to-play area became stains on household surfaces. To win, we launched the “Magic Eraser,” an innovative line of products that remove scuffs and stains easily, taking some of the hard work out of cleaning. In short, with both Mr. Clean and Swiffer, we saw a need for quick-cleaning solutions, and rather than attempt to force-fit existing products to consumers’ needs, we pursued a path with more intellectual integrity. We devised entirely new-to-the-world products, designed specifically with a consumer need in mind.