There is a terrific quote in Creative Disruption by Simon Waldman about strategy. It is from Markus Reckling, the Managing Director of Corporate Development for Deutsche Post – here’s the quote plus Waldman’s interpretation:
“I used to think that strategy was about avoiding unforeseen events; now I it’s about making sure you can deal with them.” In other words, you cannot eliminate uncertainty – but if you want to be able to deal with it, it helps if you have the strongest possible core business to build from.
This is really important. A lot of the tools that we have to help build strategy don’t prepare us to deal with a dynamic environment – instead they primarily serve to reduce the perceived level of uncertainty that we face. This is a trap.
Here is John explaining a bit about why:
The danger with a lot of the tools that we use in strategy is that they seem very precise. This precision appears to reduce the uncertainty that we face. Since most of us are uncomfortable with uncertainty, this is a good thing. The problem with this is that it does not reduce the actual amount of uncertainty we face. Therein lies the danger – reducing perceived uncertainty can lead to a false sense of security, leading us to be even more vulnerable to major disruptions in our environment, or to radical innovations.
When you think about strategy, remember that it is supposed to help us compete. This means that we need to build tools that evolve, that are dynamic, and the equip us to deal with change, not to reduce uncertainty. We have discussed some approaches to doing this previously.
Here is a test for your strategy: when you think about it, does your strategy make you feel more comfortable about the future? If so, that’s a pretty good sign that you have an uncertainty-reducing strategy. If that’s the case, start working on building one that makes you uncomfortable. That’s the way to prepare for change.