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Jun 1, 2000 · When the future is truly uncertain, this approach is at best marginally helpful and at worst downright dangerous: underestimating uncertainty can lead to strategies that neither defend a company against the threats nor take advantage of the opportunities that higher levels of uncertainty provide.
- A Strategy For Uncertainty
- Flexibility Not Ambiguity
- Moving with Purpose
A scenario-based strategic planning process proactively prepares for a range of futures by: 1. defining which uncertainties the company facesand cutting through the noise by separating them into those that matter and those that don’t (see Figure 1); 2. creating a set of probable scenariosfor how the future might unfold and determining the threats—a...
Effective scenario planning requires a degree of flexibility that makes some leadership teams uncomfortable. The breadth of strategic choices seems at odds with developing a coherent strategy the organization can understand and get behind. In practice, however, preparing for a set of different futures and defining a clear strategy aren’t mutually e...
There’s another important shift most large companies face when it comes to effective scenario planning: Not only do they need to get better at monitoring the right signposts, but they also need to link those insights to strategy. When a signal trips, in other words, the most effective planners are prewired to make a decision—let’s investigate this ...
A strategic decision comes with a high degree of uncertainty, a large likelihood that things will change, difficulty in assessing costs and benefits, and a result of several simultaneous outcomes. A tactical decision comes with a clear objective, a low degree of uncertainty, and relatively clear costs and benefits.
Aug 12, 2015 · The object of strategy in uncertainty isn’t to stray far from the company’s core strengths or long-term vision. On the contrary, our experience suggests that those strengths and values provide the best compass for adapting to changing circumstances.
- Embrace the Discomfort of Not Knowing. Throughout our careers, we are conditioned to come up with the answer — as in a single, definitive, correct answer.
- Distinguish Between Complicated and Complex. Most of us use the terms complex and complicated interchangeably when, in fact, they represent critically different circumstances.
- Let Go of Perfectionism. In a complex environment, the context is continually shifting; thus, aiming for perfection is futile. Instead, aim for progress, expect mistakes and recognize that you have the ability to continually course correct as needed.
- Resist Oversimplifications and Quick Conclusions. It’s tempting to oversimplify complex challenges, so that they seem less daunting. For example, breaking a challenge into its respective components can help you to feel like you have a greater command of the challenge at hand, but it can also narrow your view and obscure critical interdependencies, leading to a false sense of security.
Aug 20, 2019 · Uncertainty is a key contextual factor that affects the decision-making of multinational corporations on many types of international operation.
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Mar 23, 2018 · By examining dozens of variables for thousands of companies over more than a decade, we identified levers that explain more than 80 percent of the up-drift and down-drift in corporate performance. Using these benchmarks, CEOs and boards can dispassionately assess a strategy’s odds of success before signing off on it.
