How can your business prepare for the future when the future is constantly changing? It’s simple to plan the future of your business in a time when weather is stable, markets remain steady patterns are predictable and political events are predictable. Actually numerous business strategy methods like scenario planning, brain coach, and real options analysis perform well when conditions are steady. But, they aren’t helpful in the event that events change or become volatile. So, how do you prepare to be prepared for the unexpected?
in the Harvard Business Review Sept-Oct 2022 magazine article “Strategy-Making in Turbulent Times” written by Michael Mankins and Mark Gottfredson The authors recommend that managers think of strategy-making as an ongoing process that creates the possibility of a dynamic, living, and flexible strategy.
To prepare for unpredictability, they recommend applying these five steps to develop an even more flexible and agile strategy.
1) Define Extreme but Plausible Scenarios
Companies must plan for brain coach the most extreme, but plausible scenarios. What’s an extreme but feasible scenario? For instance, what would happen if the world decided to stop using oil and switched to electric power? The goal of this kind of plan is to discover novel and innovative strategies to win and compete.
One company that utilized extreme scenarios and had success is CMS Energy in Michigan. They envisioned a scenario that had abundant natural gas which prepared them for the sudden fall price of natural gas that occurred in 2014.
For more information on disruptive scenarios, think about the co-founder and CEO of Netflix Marc Randolph who disrupted the rental market. In his keynote addresses, Marc gives audiences an insight into the ways in which they were able to transform from renting DVDs on the internet to streaming movies.
2) Identify Strategic Hedges and Options
The key to planning for the unexpected is to be flexible when planning. The authors suggest that companies incorporate hedges and alternatives into their strategic decision-making. It is important to have options for strategy.
If you’d be interested in learning more Executive coaching services about planning to the next decade, think about Nancy Giordano. She is a futurist with a strategic perspective also known as a corporate strategist. Who can help businesses navigate the challenges of the ever-changing and complicated environments.
3) Run Experiments Before Locking in Investment
If you’re having difficulty deciding what direction to go you should consider conducting a test. Amazon has proven to be successful through its culture of test and learning. For instance, it was able to develop Amazon Prime into a great strategy by testing. It in select markets prior to expanding globally.