Traditional planning, forecasting and risk assessment processes are still important but those responsible for strategy implementation would be wise to note the article ‘Plotting Strategy in a dynamic world’ where Teece et al tell us:
“Companies can no longer rely on traditional forecasting exercises to spot — and capitalize on — emerging threats and opportunities”.
They note the future is a moving target. In this era entities must have the ability to
Sense – Detect Signals from an array of sources offering clues to optimal strategy.
Organise – Establish structures and processes which can adapt to VUCA environments.
Capture Value – Focus on the right strategic priorities and not be ‘busy fools’.
Renew – Relentless focus on evolving to better, to not be afraid to reinvent.
These new dimensions of focus need to be grafted on to existing strategy development frameworks and truly embedded in the way of life of the entity, their power is most clear when the entity understands additional capability is not only appropriately prudent but also a commercial imperative.
These additional dimensions may have been overlooked in the past, but in the digital era where change happens more quickly than ever, such areas of focus are imperative. Not having this form of ‘radar’ switched on may result in a terminal event for an entity. Take Silicon Valley Bank as a potential example, what if they had sensed the EWI’s/Signals on a reversal of lower for longer interest rates and were organised with contingencies generated via extensive scenario analysis and war gaming. Could they have taken steps earlier to alter their business model and deploy funds into alternative assets than US treasuries.
SentinelReward Lesson: The smartest companies make it their business to go above and beyond traditional approaches and enhance their radar.