Book review: The Strategy Book by Max McKeown

November 9, 2023|Kim's Blog, Management Skills, Strategy|

Being easy to read, short and jargon-free The Strategy Book (FT Publishing, 2012) is a considerable achievement bearing in mind the subject matter. I deliver and facilitate strategy workshops and it’s always good to be able to recommend strategy books to delegates. This one is equally helpful for experienced leaders and students first grasping the principles of strategic thinking. It’s unusually practical claiming to “demystify” the strategy process – comparing strategy theory with strategy in the real world. The author clarifies the strategic process while guiding the reader through it to create a new strategic mindset. I wish I’d had access to such a book when I studied for my MBA. Book review: The Strategy Book by Max McKeown

Author and book overview of The Strategy Book

Author Max McKeown, with both an MBA and PhD from Warwick Business School, is a strategy and innovation coach for leading companies. Unusually, he has accolades for both customer service and human resources. He’s clearly an advocate for scenario planning.

After describing what strategic thinking looks like, the author guides readers through the strategy process – with suitable questions to ask during leadership discussions. I really like his constant emphasis on the need to balance a planned approach with the ability to recognise and adapt to changes. There’s a satisfying emphasis on employee engagement throughout the strategy process. Guidance is provided on ways to position against the competition although there wasn’t much on the external and internal analysis you might need for this (although there are various tools listed in the toolbox for this).

There are six parts to the book and numerous chapters in each. Each section has the same structure: a description, strategic examples, strategy ratings, objectives, context, challenges, success measures, strategists’ checklist and related ideas. The brief strategy stories bring his ideas to life.

The examples are mostly products so it’s not ideal for professional services. The effort made by the author to simplify and be practical means that occasionally the material becomes either too general or hard to see how it might be applied in reality. But overall, it’s a fantastic primer on strategy development and execution.

Part One – Your strategic self

What is strategy?

“Strategy is about shaping the future”. There’s a brief description of strategy’s military origins through to early corporate strategy (Alfred Chandler, Igor Ansoff and Henry Mintzberg). Before considering the creative and analytical sides of strategy. And the differences when the market is stable or changing dynamically.

There’s a warning about over-reliance on any particular approach to strategy. Richard Whittington argues “Strategy is hard” and considers four types of strategy:

classical (maximise profit with deliberate processes)
evolutionary (maximise profit with emergent processes)
systematic (seeks plural objectives with deliberate processes) and
processual (plural objectives with emergent processes)

Basic strategy questions

“There are strategy tools and processes that can help but the real heart of strategy is the strategist”.

“Becoming a strategic thinker – a strategist – is about getting better at shaping events…You learn that reacting and responding to events is just as important as planning”.

“You use strategy to figure out how to achieve your purpose and ambitions. You move between where you want to go (ends) and what you need to do (means). Great strategy is the quickest route from means to end to shape your future”.

Look for opportunities and threats and explore them with imagination, ambition and a creative understanding of customers, products and resources. Key strategy questions:

What do we want to do? (overall purpose?)
What do we think is possible?
What do we need to do to achieve our goals?
When should we react to new opportunities and adapt plans?

There’s a warning to avoid being too inward-looking. And another that a command-and-control approach often leads to out-of-date strategy and out-of-touch leaders (See Book review: The Management Shift by Vlatka Hlupic (kimtasso.com).

Yet an evolutionary approach doesn’t really address what you need to try to do. A clever strategy is between the extremes – plan deliberate actions to shape the future but stay close to local events and react to them. I liked the idea of a learning approach to strategy – engage as many people as possible with the strategy so they can adapt and feedback to the leadership team.

(On this point, Mintzberg’s idea of combining deliberate and emergent strategies for realized strategies is the answer; Need a strategy? Let it grow like a weed in the garden | Henry Mintzberg) The way to achieve great employee engagement is addressed in this 2021 book Book review: Influential Internal Communication by Jenni Field (kimtasso.com))

Think before you plan

“Strategy is about outthinking your competition. It’s about vision first and planning second”

There’s an anecdote about Zuckerberg’s “done is better than perfect” culture at Facebook.

Strategic questions are thought experiments to be done alone and in groups. The author recognises that time pressures may prevent organisations taking the necessary time to think. And sometimes organisations prefer to act than think. “Successful organisations try to have a healthy balance between thinking, planning and doing”.

Becoming a strategic thinker

I was surprised to see Simon Cowell and X Factor used as an example of strategic thinking. “It’s possible to be a strategic thinker without using any strategy tools, but it’s not possible to create brilliant strategy without being a strategic thinker”.

I observe that professional services may not adopt business school models much, but the sector does have many strategic thinkers and entrepreneurs. People who ask different kinds of question and look at old (and new) problems with fresh eyes.

The author comments on how constraints (role descriptions, departmental responsibilities and processes) can trap people to focus on short-term demands rather than the big picture and the future.

He lists great questions that prompt strategic and creative thought:

How does your industry or sector work?
What does success look like for your organization?
What would it take to do it ten times better?
What is the most important (root) issue you face? (The idea of strategy being based on a core challenge is central in this book: Book review – How to think strategically by Sola and Couturier (kimtasso.com))
What would you do with no limitations?
How many of those limitation are real?
What are older, younger, richer or poorer people doing?

He mentions Kenichi Ohmae’s classic book “The Mind of a Strategist” who argues that managers tend to focus too much on beating the competition rather than looking for new ways to create wealth based on customer needs and organisation strength.

Selling your strategy

Engage the leadership team and entire organisation. Consider what your strategy needs to work and why your organisation should care about the strategy. There are good questions to consider (e.g. What are senior managers scared of? What problems does the strategy solve? What is the informal decision-making process? Who are the strategic influencers?).

There’s wise advice that you build your own credibility before asking people to invest in bigger ideas that affect the whole company. And a reminder to react to opportunities as well.

Strategic ideas need to be clear enough to be understood but flexible enough for people to contribute to them. He suggests using stories to engage emotions (see Video – The art of storytelling – Kim Tasso explains and demonstrates), to listen and be alert to hidden games being played.

Part Two – Thinking like a strategist

See possibilities that can be shaped, notice what is happening around you and consider historic trends. The world is complex and uncertain – so look for patterns and creatively design actions now to shape the future. “Reacting is as important as planning”. There are great questions to help you notice opportunities from reactions to unplanned events.

There are observations about the annual planning cycle in organisations – often retaining the same assumptions, ignoring the plan or failing to adapt to new circumstances. The need for more fluidity. There’s a reference here to one of my favourite themes on strategy – Mintzberg’s emergent strategy. https://kimtasso.com/strategy-basics/

There’s advice to jump your uncertainty gaps by decision-making and actions which involves risk. He adds wisely “The aim of a business is to take risks and benefit from the higher returns of taking those risks”. And then adds that whilst some risk comes from outside the organisation, most is about the ability of an organisation to complete its plan. There’s mention too of Black Swans (see Be more strategic – Strategy in a post-Covid19 world (kimtasso.com))

There’s an interesting story about how Netflix was prepared to cannibalize its DVD-by-mail business – to learn from your competition rather than copying them. I like the idea of creating a competition wall. He says that you know you are getting better at looking over your shoulder when your sense of urgency increases.

With stories from Intel and Microsoft he talks about “knowing where the grass is greener”. Knowing when to jump on new markets is an important part of competitive strategy. And noticing new competitors. He mentions Porter’s Five Forces tool.

Part Three – Creating your strategy

Whether your strategy is to keep you where you are or getting somewhere else, he argues that creating strategy is seeing the bigger picture – to see beyond the immediate tasks and find advantages. “The strategy you create is never complete – it is finding a set of answers to basic powerful strategy questions”.

He shares the story of how Twitter came into existence from a big picture brainstorming day with people from a podcasting company considering tough competition from Apple and having an idea for an SMS service.

He argues you need to look forward to judge when it’s better to change whilst remembering where past successes came from. And consider the fastest-growing trends in the world. And simplify these forwards, backwards and outside views into a simplified model into which you can fit new pieces of information as they emerge. “A strategist cannot get lost in the detail”. He mentions innovation expert Clayton Christensen who suggests that success from what you are doing stops you seeing what you should do next.

The section on position, intention and direction starts with a story about Apple struggling until it produced the coloured iMac and launched the iPod and learned it distinctive strategic position.

Strategy is about connected, cumulative tasks that are worth more than the sum of their parts. The mission statement – which he describes as a kind of strategy history – can be a powerful rallying call. He illustrates this with Apple choosing design and leadership for the best devices and Dell (financial success and relative customer experience) delivering the best customer experience. Consider the key industry characteristics and then consider which additional unique characteristics you can offer.

There are simple tips to help with positioning – like plotting whether you are low cost, low quality or high cost, high quality. Michael Porter is all about positioning and the author mentions his generic strategies: cost leadership, differentiation and focus. There are some comments about scale and mention of Jim Collins’ “Good to Great” concept of the flywheel effect. (see Classic management book reviews – The McKinsey way, Good to great (kimtasso.com)).

“Strategy is a stream of decisions and actions”. He notes that your optimism (or pessimism) will impact decisions as well as ability to make fast decisions.

The section on “Adapting to your competitive environment” discusses the relative merits of centralised and decentralised decision-making. The author observes: “You want to know more about your environment than simply its levels of competitiveness and uncertainty. You want to know how your market environment works, its particular shape, rhythm and peculiarities”. Cost and demand analysis follow.

Part Four – Winning with strategy

There are numerous examples of strategic approaches such as: out manoeuvring competitors (e.g. IBM and Smart Cities), creating new markets (e.g. Zipcar – car sharing rather than rental), being first to market, test markets, faster growth for scale economies, anticipating new competitors, confusing competitors, Intellectual Property protection, innovation (e,g Levis research and Curve D brand), brands across different price points (e.g. VW with SKODA and SEAT for the price conscious up to Lamborghini and Bentley for wealthy customers).

There’s the story of Amazon starting as an online book shop and focusing on service to move into new markets “No other competitor in retail history has managed the same amount of rapid growth and relentless innovation”.

There’s interesting questions and analyses for considering those in your strategic group and how to differentiate. And guidance on identifying new strategic spaces into which you could move. I thought the author would refer here to Red/Blue Ocean strategy but instead he suggests Clayton Christensen’s book “The Innovator’ Prescription” and the Business Model Innovation (BMI) See The Hard Truth About Business Model Innovation (mit.edu) or Reinventing Your Business Model (hbr.org)

There are organisation life cycles as there are product and industry life cycles. So the author addresses the question of how to keep your company growing regardless of its maturity.

There are questions about whether the various parts of the organisation and strategy fit and questions about whether the organisation needs to be split. And I like his question “Does your organisation have enough constructive conflict?” – suggesting that you need enough disunity for progress (Interesting that he doesn’t talk about consensus here). He says leaders need to move between autonomy and control at different times. I like the work of Greiner here and he includes it in the strategy toolbox.

Going global without going broke explores international growth strategies. He mentions how some companies (eg Coca-Cola and McDonalds) followed their armed forces during and after wars and others who became dominant first in their national market (e.g. Vodafone). He makes an interesting observation that whilst Walmart is one of the world’s largest companies and most valuable brands and is international – it isn’t global. Bartlett & Ghoshal say there are three tasks of global strategy: efficiency, national responsiveness and innovation.

Knowing what you can do best starts with a story of Google and its official strategy “organize the world’s information and make it universally accessible and useful” but mentions situations where it strays from this (e.g. social media services). This is about focusing on your strengths. Although he offers ideas on overcoming gaps and weaknesses.

He mentions Jay Barney’s Resource Based View (RBV) but doesn’t mention his VIRO analysis that is familiar to those who study marketing manager apprenticeships.

Part Five – Making your strategy work

The chapter on managing your strategy process starts with the circular process adopted by GE – customers, innovation, technology, commercial, globalisation and leader.

He mentions that many companies don’t have a strategy management process – and those that do often restrict this to 3-6 months ahead of the next financial year – driven by the top. But he argues “the strategy process should engage the hearts and minds of the whole company continually throughout the year”.

He acknowledges the challenge of finding the time for strategy. He suggests accelerating and deepening the strategy process and co-creating a strategy model. I liked his checklist here – balancing governance with engagement – and recommending the use of external facilitators (I’m available for hire! Many of my clients ask for help in designing and facilitating strategy days).

There is some good advice for creating strategy meetings where there is a meeting of minds and there’s an exciting case study of how Disney organised a series of breakfast meetings where stories were used to discuss the direction, performance and strategy of the company. There are some great tips for facilitating (see How to facilitate groups – 2 (Herding cats in professional services) (kimtasso.com)) including having some creative activities.

I like that he extends to strategy execution and implementation. He starts a chapter with “Most strategy involves change. People will have to change something they are doing to make the strategy come to life. You need to be able to translate your strategy into actions, tasks and projects”.

He describes McDonald’s “Change to win” strategy – instead of growing locations they improved experience. He continues by explaining the importance of making the strategy engaging and listening to feedback from stakeholders. He notes Chris Aryris’ observation about defensive routines.

He tackles what can go wrong with your strategy by describing Shell’s use of scenario planning. And the issue of “the long emergency” where people suspect there will be an issue with the strategy but do little to prepare for it.

Strategies can become obsolete or self-destruct or may be successful and lure people into complacency. Lack of clarity, commitment, creativity, skills and discipline are other reasons for failure.

He advocates regular reviews of assumptions and “Strict obedience to a detailed plan for action”. It’s reassuring that he again suggests getting everyone involved in strategy development both for feedback and to get advance notice of where there might be implementation issues. It’s a useful exercise to look at: What could go wrong? How could we respond? How can we prepare? He refers to Larry Bossidy and Ram Charn on execution.

He shares the Ford turnaround story from simply asking “Did you realise we are losing money?”. And stresses again that its crucial to adapt to the demands of the external environment. Noticing the threat is the first part – reacting fast is the second. “Growth (and healthy) business does not come from cost cutting alone. You can cut your way to oblivion” followed by “Improving marketing and innovation is essential” and notes Donald Hoffman on generic strategies for restructuring and recovery.

Part Six – Strategy Book toolkit

At the end of the book (p 165 – 225) core strategy models and frameworks are listed with a brief description although it doesn’t devote much coverage of when and how to use each framework. (There’s more analysis of most of the models in The Marketer’s Handbook: Reassessing marketing techniques (kimtasso.com)) and many are covered here: Marketing planning in a nutshell – simple and complex plans (kimtasso.com)).

Basic (powerful) strategy questions
SWOT Analysis
Porter’s Five Forces of competition
Porter’s Generic Strategies
Burgelman’s strategy dynamics model
Porter’s Value Chain
Core competencies and resource-based view
Nonaka and Takeuci’s knowledge spiral
McKinsey’s 7-S Framework
Scenario planning Book – Chaotics – marketing in turbulence (scenario planning) (kimtasso.com)
Ansoff’s growth grid
Boston Consulting Group (BCG) product portfolio matrix
Kim and Mauborgne’s blue ocean strategy Blue ocean strategy for professional service firms (kimtasso.com)
Griener’s growth (and crisis) model
Treacy and Wiersema’s value disciplines
Cummings and Wilson: orientation and animation
Lewin’s Force Field analysis
Kotter’s eight phases of change
Kaplan and Norton’s balanced score card Using Kaplan and Norton’s Balanced Scorecard in a PSF (kimtasso.com)
Hrebiniak’s model of strategy execution
Hammer and Champy’s business process redesign
Michaud and Thoenig’s strategic orientation
Burgelman and Grove’s strategy bet model
Arguris’s double and single loop learning
Mintzberg’s deliberate and emergent Strategy basics – Mintzberg (kimtasso.com)
Johnson’s white space model
Pralalad’s bottom of the pyramid
Stacey’s strategy from complexity
Mckeown’s strategic thinking styles (Fluid or Fixed)