CONFIDENTIAL: Uncorrected WIP proof, NOT for circulation or distribution. Pearson Education.

Shaping the future

Strategy is about shaping the future. Corporate strategy is about
shaping the future for an organisation. 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
to get there (means). Great strategy is the quickest route from
available means to desirable ends to shape your future.
Frequency: Every problem, every opportunity!
Key participants: The whole organisation.
Strategy rating: Strategy6

The Cheesecake Factory has grown into a billion dollar corporation.

Its recipe for success is based on a small number of strategic
ingredients. The founder created a unique concept with the
broadest, deepest menu in casual dining and the best cheesecake
he could make. They spend $2000 per employee just on training
to make sure people deliver the best customer experience.
They open new restaurants when they find wonderful new
locations, rather than just because they have money to spend or
bonuses to earn. They focus improvement efforts on increasing
taste, with quality homemade cooking and fast preparation,
rather than reducing cost. This patience and discipline is about
doing what makes long-term sense.
These are strategic decisions. They are not accidental, although
they did not all come from planning. They are part of a strategic
package. They shape the competitive environment. They stop
copycats. And they shape the future in ways that are desirable
and believable to customers, investors, managers and employees.

Objective
Shaping the future of an organisation involves every part and
everyone. Strategy considers things inside and outside the organisation that will make a difference to its success. The strategist also

M01_MCKE4404_02_SE_P01.indd 4

9/11/15 4:26 PM

CONFIDENTIAL: Uncorrected WIP proof, NOT for circulation or distribution. Pearson Education.

Shaping the future

looks for opportunities and threats to the future of the organisation. Ideally these are explored with imagination, ambition and
a creative understanding of customers, products and resources.
To shape the future requires a combination of thinking, planning
and reacting to events that emerge along the way. These provide
key strategy questions:

What do we want to do?

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?

What do we want to do?

This establishes a sense of what is desirable. Organisations tend to
have an overall purpose. Sometimes the purpose is very precise and
deliberately agreed. Sometimes the purpose of the organisation is
very ambiguous. There may be many different opinions about what
the organisation is for and what it should do. These opinions may
conflict and compete with each other. This is all of interest to the
strategic thinker.

What do we think is possible?

This introduces some sense of practicality. You look at opportunities in the world contrasted with the resources that the organisation either has or can obtain. But looking at opportunities
can also expand a sense of what is possible beyond what has
been done in the past. What do the achievements of others and
trends in technology and consumer desires allow your company
to do next?

What do we need to do to achieve our goals?

This includes the necessary strategic moves to achieve the overall
goals of the organisation. It includes the style of leadership, the
structures and processes of the organisation. And the projects,
tasks, roles, products and services that have to be done to achieve
organisational aspirations. Ideally these actions work together in
some more or less harmonious way so that the sum of actions is
greater than their parts.

M01_MCKE4404_02_SE_P01.indd 5

9/11/15 4:26 PM

CONFIDENTIAL: Uncorrected WIP proof, NOT for circulation or distribution. Pearson Education.

Your strategic self

When should we react to new opportunities and adapt plans?

Our views of the future are incomplete. When we write our plans
or decide on an overall purpose we dont really know what is going
to happen next. Small and big events will happen that challenge
the existing strategy. New opportunities will emerge that are bigger, better or just different from those we thought of the first time.

Context
Shaping the future depends on context. You cant control the
waves of human desire and endeavour with strategy, but you can
create strategy that surfs those human waves, contributing to
them or benefiting from them. It follows that you need to understand the context for any attempt to create strategy.
There are probably some low competition, high stability places in
the world. But it is safer to assume that the external context your
strategy will face will be high competition, low stability. So this
book will make the same assumption and give advice on strategy
that can be effective in such a world.
Each section answers questions that are needed to create a strategy
that can be used to shape the future. There are sections that
explain how to create strategy, think like a strategist, win with
strategy, make your strategy work, build a strategic organisation
and troubleshoot your strategy whenever it stops working.

Challenge
A lot of organisations still set in motion grand plans to a better
future. The larger the organisation, even now, the more likely it
is that they have a strategic planning team who produce strategy
documents as a result of lengthy financial analysis.
This plan is then cascaded or passed down the hierarchy until it
reaches middle management, at which point it often disappears.
The front line may have to work in structures, processes or role
descriptions that were designed as part of the plan. This planning,

M01_MCKE4404_02_SE_P01.indd 6

9/11/15 4:26 PM

CONFIDENTIAL: Uncorrected WIP proof, NOT for circulation or distribution. Pearson Education.

Shaping the future

command and control approach often leads to out-of-date strategy and out-of-touch leaders.
Some people argue it isnt even possible to plan because events
are so unpredictable. They claim it is better to just organise as efficiently as possible. Then you just hope evolutionary market forces
(what people want interacting with what people sell) will be a
natural fit to whatever you are doing.
The trouble with this evolutionary approach is that it doesnt
really address what you need to try to do to make it more likely
that your company is a natural fit. And thats why clever strategy
is somewhere between the extremes. It does try to plan deliberate actions to shape the future, but also tries to stay close to local
events and to react to them. In this way, strategy is transformed
into a learning process that becomes at its best smarter through
experimentation.

Success
Progress is made when the organisation moves towards strategy
that learns its lessons and adapts to new opportunities. In this
way, you can benefit from strategic thinking that is clever rather
than one-size-fits-all strategy. You will also see people at all levels
more involved because managers are interested in what is really
happening at the front line.
Your strategy efforts will use strategic principles and tools to better
prepare the organisation for shaping the future. Your strategy will
craft a response to external waves, needs of customers and actions
of competitors. Your strategy will consider the nature of the
business (its purpose, style and products) and the ways that it
organises internal resources, processes and people.

Strategists measures of success

Understand (and apply) the main strategy questions.
Use the differences between planning, coping, adapting and shaping
covered throughout this book.

M01_MCKE4404_02_SE_P01.indd 7

9/11/15 4:26 PM

CONFIDENTIAL: Uncorrected WIP proof, NOT for circulation or distribution. Pearson Education.

Your strategic self

Consider a wide range of internal and external aspects.

Accept the need to build a strategic organisation to achieve shared
purpose.
Establish a flexible, continuous approach to strategy.

Pitfalls
Its important that efforts to introduce more strategy dont lead to
less strategic thinking (or worse results). There are lots of naturally
strategic people who see opportunities, see new patterns and
adjust the work of the organisation to take advantage of these.
Its also important not to simply replace one set of words with
another. The idea of strategic thinking is to improve results.

Strategists checklist
Remember that inward-looking planning is not sufficient

because of the high levels of external change and competition.

Work your way through the strategy questions (see page 165)

and answer them for your business. This provides a valuable

template for developing creative strategy that is straightforward
enough for all sizes of business.
Understand the importance of a learning approach to strategy.

This means that as many people as possible are engaged with

strategy so that they can adapt what they do to support the
purpose of the organisation. And so that they can feed back
valuable information to their leadership team in order to adapt
the official strategy.

Related ideas
For Professors Howard Thomas and Taeb Hafsi, strategy is a
mixture of rules of thumb and creative methods. It helps people
understand and transform reality. This means that strategy tools

M01_MCKE4404_02_SE_P01.indd 8

9/15/15 1:41 PM

CONFIDENTIAL: Uncorrected WIP proof, NOT for circulation or distribution. Pearson Education.

Shaping the future

are only valuable if they stay close to reality. Some techniques

are useful only for making specific decisions. The most powerful
tools will help people navigate the process of shaping the future.
Without this, strategy is nothing. Its worth remembering that
the actions of people in organisations can be the result of habits,
hypothesis or heuristics. Any of these actions can have strategic
consequences. This is particularly true for deep patterns of actions
that shape what and how an organisation behaves.
As an example, research by Bingham and Eisenhardt, professors
at North Carolina and Stanford, introduces the idea that organisations develop a portfolio of heuristics. These are lessons, helpful and unhelpful, that come from experience that shape actions.
Some of these lessons become an embedded and unquestioned
part of culture. Hypothesis can help challenge both habits and
heuristics where necessary.
For similar reasons, Richard Rumelt argues, in his best-selling book
Good Strategy, Bad Strategy, that the key thing is to have a diagnosis
and guiding policy connected to a set of coherent (real world)
actions. He concludes that bad strategy is fluff, while good strategy
is logic although you should note that smart strategy is often
ultimately a form of fuzzy logic that must adapt to messy, real world
situations.

M01_MCKE4404_02_SE_P01.indd 9

9/15/15 1:41 PM