Roger L. Martin is dean of the Rotman School of Management and co-author, with former Procter & Gamble chief A.G. Lafley, of Playing to Win: How Strategy Really Works. He spoke with Inc. editor at large Leigh Buchanan.

What do company leaders get wrong about strategy?
They think that if they have a vision or aspirations, that's enough. Years ago, I met with the CEO of a large U.S. company, the son of the founder. I asked him to send me the strategies for the five businesses it was in. There were binders and binders and binders. I had dinner with him, and I told him, "All you have are aspirations. These documents say, 'We are going to be great at this, awesome at that.' There is no identifiable strategy that will make that a reality." He said, "How long will it take to fix it?" I said, "A few years." He called me back a week later and told me he'd decided to resign. When he understood the difference between strategy and aspiration, he realized how daunting it was.

What would have made all those aspirations into a strategy?
The heart of strategy is defining where you're going to play and how you're going to win. A lot of companies don't consciously choose where not to play.

What are some how-to-win considerations?
How can we meet customers' needs like nobody else, so they will pay a premium? Do we have a superior user experience? A great technology? The other way is to have a distinctly lower cost. You may be more efficient. Southwest Airlines has one kind of jet. It flies between smaller airports. It doesn't have preassigned seating or interline baggage checking. And that decision about how to win affected its decision where to play: only in the continental U.S. Otherwise, the system didn't work.