As 2016 ends, few would argue that most businesses are in for a roller coaster ride in 2017. The United States is set for a hard-right turn politically, the Brexit process is facing new uncertainties regarding its duration and manner, and accusations of Russian cyber espionage and China’s muscle-flexing in the Asia Pacific region foreshadow turbulence in international relations. Longer-term demographic shifts in developed and developing economies will continue to affect wealth patterns and create new consumption opportunities. What are strategists to do?
To manage this uncertainty, I offer five new year’s resolutions for competitive strategists to help navigate your companies through the bumpy road that 2017 appears ready to serve up.
- Think Critically. In an era of fake news, unsubstantiated claims, and social media echo chambers, it’s easy to forego facts and draw conclusions based on what you want to believe, not what actually may be true. Critical thinking skills ensure you connect facts and judgments, and require that you be cognizant of not only the judgments you are reaching, but how you are reaching them. There’s too much strategic risk with decisions based on what you want to believe about markets, competitors, and customers; you need to be certain that judgments and insights driving strategy are evidence-based and soundly reasoned, and be prepared to act on analytic outcomes that don’t conform to your preferences.
- Embrace Research Methods You Don’t Always Employ. Organizations should not be hamstrung by an overreliance on familiar, comfortable research approaches. We hear all the time from executives that “we are a data driven company,” which all-too often translates to a failure to consider valid information that comes from more qualitative methods. No single research approach has all the answers. Resolve to find the best data and evidence no matter the technique, not the one with which you’re most comfortable.
- Don’t Be Afraid to Be Skeptical. Former Director of Central Intelligence Robert Gates once said, “When an analyst smells flowers, he looks around for a funeral.” Ask tough-minded questions about the conclusions your analysts and external consultants are feeding you. Look for alternative explanations of existing data and challenge the conventional wisdom within your organization.
- Embrace Disruption. Though discomforting, disruptive industry developments – new regulatory structures, new entrants, new business models – are sources of opportunity as much as they are challenges to the status quo. Have contingency plans in place to counter anticipated market challenges, and look deeply for new opportunities that competitors may not spot.
- Plan Strategically. Even if you resolve to do the first four items, it doesn’t mean you’ll be successful. Success requires planning. Yet, in a recent Fuld Institute for Competitive Strategy study, 51% of companies do not have a strategic plan developed, even when they have conducted a competitive analysis and identified specific risks facing their organizations. Creating a strategic plan isn’t always sufficient; plans that fail to include contingencies for new developments or indicators for continuous vigilance work only if your desired industry future is the one that materializes (see item #1).
As markets continue to exhibit volatility and the availability of information from diverse sources continues to grow, it’s hard to find the truth about your industry, customers and competitors. But, approaching uncertainty in an organized and disciplined manner will reward your organization with objective insights based on evidence and tied to robust and flexible strategic options. Happy new year.