Uncertainty and turbulence are what describe most global markets in recent times. A large number of companies are struggling to avoid pitfalls. They face a daunting task in adapting their strategies to cope with the latest business challenges as their well-tried and traditional approaches (analyzing trends, making forecasts and committing to only the “best” course of action) do not fit in today’s highly disruptive and fiercely competitive market environment.
A well-cited example is Kodak who failed to understand the disruptive change brought about by digital technology. In spite of Kodak’s resources, capabilities and global brand recognition, they missed the opportunity to benefit from the disruption due to a lack of an effective strategy.
It is very risky for companies to use a traditional strategy development process to cope with uncertainty and compete with new and more agile competitors. There is always the danger that classic strategy processes produce a single course of action which may very well be the wrong one. Instead, and in order to reach the top and hold your status on the top, it is vital to adopt a new strategy development approach championed by leadership that takes account of the following:
- Identifying the specific uncertainties faced by their company; filtering less serious ones and pinpointing the critical ones.
- Investigating multiple hypothetical scenarios and analyzing the possible threats and opportunities from their outcomes.
- Developing an appropriate set of strategic options while committing to a specific strategic course of action and simultaneously maintaining flexibility in order to adjust and maneuver through different future scenarios.
- Identifying a clear strategic roadmap with landmarks to highlight important changes in the environment, call for action according to what has been expected during the planning process.
Moving faster than the competition as conditions change is critical to success in an uncertain world. And that means companies have to recognize important signs of change before competitors do, thus leveraging from this advance notice interval which may be as short as a mere few months. Regardless of whether one’s company is failing or succeeding, developing a strategy for the uncertain future ahead is a must for survival.