Senior executives often lament, “If we only had better forecasts, we could devise better plans.” They pressure their teams to come up with more accurate projections for how their markets will evolve, competitors will respond, and consumers will react — thinking that forecast precision is the key to defining winning strategies.
In Uncertain Times, the Best Strategy Is Adaptability
To cope with volatility, companies should rethink how they approach strategic planning.
August 24, 2022
Summary.
Companies everywhere labor under the illusion that the key to a great strategy is a good handle on the future. But meteorologist Edward Lorenz demonstrated that small differences can have massive consequences or none at all, which means that unless you have a perfect, complete picture of existing conditions, forecasting the future with any precision is impossible. Instead, advises Bain’s Michael Mankins, companies should focus on making themselves better able to cope with unexpected changes. For strategy, that involves instilling an adaptive mindset among managers, building in flexibility into operations, creating dynamic plans.
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New!
HBR Learning
Strategy Planning and Execution Course
Accelerate your career with Harvard ManageMentor®. HBR Learning’s online leadership training helps you hone your skills with courses like Strategy Planning and Execution. Earn badges to share on LinkedIn and your resume. Access more than 40 courses trusted by Fortune 500 companies.
How to develop a winning strategy—and put it to work.