Management Systems are the fifth and final level of the Strategic Choice Cascade in the Playing-to-Win framework. They describe the structures, processes, metrics, and incentive systems necessary to execute the chosen strategy in daily operations and to keep the built capabilities alive. Without appropriate Management Systems, strategy remains a document sitting in a drawer.
Management Systems encompass: reporting structures (What is measured and how often?), meeting rhythms (Where are strategic topics discussed?), incentive systems (What are employees rewarded for?), decision processes (Who decides what at which level?), and planning cycles (How is the strategy regularly reviewed and adjusted?). A company that has chosen differentiation through innovation as its How-to-Win needs different Management Systems than one pursuing cost leadership: innovation requires space for experiments and tolerance for failure, while cost leadership requires strict efficiency metrics and tight process control.
The concept comes from the Playing-to-Win framework by Lafley and Martin. The most common mistake: the strategy is cleanly thought through on the upper four levels, but the Management Systems remain unchanged and work against the new direction.
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