In a Volatile World, Your Strategy Must Be Flexible
Summary. Although it sounds cliché, the world really is a more volatile place than it used to be. That’s because the drivers of uncertainty are more intense — there are more and more change vectors affecting outcomes and these vectors are more and more inter-related. The range of likely outcomes five and 10 years has grown much larger than it was even a decade ago, dooming traditional approaches to strategy setting and planning to failure. To have a hope of succeeding, strategy makers need to give themselves plenty of opportunities to change course and treat their strategic plan as an evolving construct rather than a fixed roadmap.
Executives routinely contend that their businesses are more unpredictable than ever before. As it turns out, they’re right. If you carefully examine the factors that drive unpredictability in complex systems, you discover that in most sectors of the economy they have intensified. The result is that the number of potential future states that executives need to account for in making strategic choices has skyrocketed. Let’s look at the two drivers of unpredictability in more detail.