Lenny Rachitsky: evaluation

Transcript context

…those competitors? To win there, where you've chosen to play to meet your winning aspirations, what capabilities do you have to have that your competitors don't, that would enable you to win that way? And then, what management systems, enabling management systems, do you have to put in place to make sure you build and maintain those must have capabilities to win, where you've chosen to play, to meet your winning aspiration? And so, I came to the conclusion, actually it was in 1995, the end of an eight-year journey, I came to the conclusion those were the five, and you had to do them together, and that is the essence of producing a strategy that compels desired customer action. I want to go through an example of a company, but before we do that, something I think that's important to talk about is, if your book is called Playing to Win, you talked about this idea of you need to play to win, and you argue that a lot of people are just playing to play, they're playing to play the game. I'm guessing most people listening, and most people developing a strategy, don't think they're doing that, they don't think they're just playing to play the game. They think they're playing to win. I'm curious what are signs that you're not actually playing to win? It would be mainly signs given to you by customers. So, if you say, we're the most innovative company in our industry, and customers... And let's say the industry distributes through a given channel, and customers come into that channel and they look at the two products and say, I could flip a coin on this one, you are not effectively playing to win. Maybe you thought you were winning, but customers don't think you are better. Or if your competitor lowers their price compared to your price, and you say to yourself, oh my God, if we lowered our price, we would make no money, but your competitor keeps on pricing there, you may think you have the low cost position, but they do, and you have to give them whatever share they desire at that lower price because you can't compete there. So, you'll know you're playing to play if you're not aiming to, and accomplishing, having either an offer where Lenny walks into the store, whatever kind of store it is, and says to the person in the store, I want that brand. An example, Lego, one of the companies I've worked with for a long time, great company. It turns out that if you do market research on kids, a store that purports to be a toy store but that doesn't have Lego is not a toy store. They would define it as not a toy. Mom, why are we here? I wanted to go to a toy store. And she said, but it says toys on here. And the kids said, uh-huh. That's an insane brand. That's an insane, insane, insane brand. And it has a price premium for anything, over any of its competitors by a long shot. It keeps growing, it actually for most years in the last decade it has had 80 or 90% of the entire category growth is Lego. And so, they're playing to win, to be distinctive in the minds of consumers. But Vanguard has got $9 trillion of assets under management last time I checked. Does it do anything distinctive? Not really. The customer bought, do they have the lowest cost position so they can charge the lowest AUMs? Absolutely. And so, there's different kinds of ways, but you'd know by the actions that customers take.…

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