From time to time I speak to friends of mine who have a business. One restores classic cars, a few are consultants and one is a personal trainer, coach and athlete. What they have in common is that we talk about how you plan for an uncertain future. We come up with many questions. How can we apply new ways of thinking? How do we identify actions that we have not thought about before? How do we know when to act? It all comes down to one question: how do we transform uncertainty into opportunity?
This guide follows a four-step logic that is suitable for individuals and teams. The steps are:
- broaden your perspective on what is possible;
- map your strategic choices;
- craft alternative strategies;
- decide on what to do next.
broaden your perspective on what is possible
When we want to reperceive our environment we first need to step out of existing corporate and industry mindsets. Get started by setting an appropriate timeframe within which to explore what could have the highest impact on your business. A one-year timeframe is likely to be significantly different from a five-year one. For the personal trainer, the short term highest impact is different compared to restoring cars or being in the financial business.
However, over time, the spending power of people, reliability of the supply chain and people’s attitudes towards health and happiness may become an uncertainty. The aim is not to ‘get it right’, but to think outside of the box. One way to stimulate this is to think about which factors drive uncertainty in your business. With your team, explore:
- What might a best-case scenario for our business look like?
- What might a worst-case scenario for our business look like?
Imagine yourself operating in these situations. What factors could have led to these occurring? Then, prioritize these in terms of strongest impact on your business.
It is also fine to take extreme future projections and build a scenario around it which describes how the market works, what it means for customers, and who the most important stakeholders are.
At this stage, it is important to ‘walk in the future’. Describe as vividly as you can what this future would look like. You can divide your team into smaller groups to explore:
- How did this scenario develop?
- What were key influencing factors?
- What are key turning points?
This will provide you with a shared picture of the future which is rich in detail, broadens your perspective on what is possible, and highlighted signals about futures you would not have anticipated before.
your strategic choices
It is all too easy for your view on strategic choices to be influenced by what has made you successful in the past. This is reliable in a stable environment. In unstable, unpredictable environments, being able to act on options in alternative outcomes is useful. To explore alternatives we use a strategy playbox. Start with defining strategic action fields, which represent key aspects within your control and the range of possible alternatives for your business.
As a sense check, each action field should contain an alternative that captures a choice you have already made. This further helps you to systematically map all the other choices.
craft alternative strategies
Using the same grid that you have developed in your strategy, you can identify alternative strategies that are consistent. In this step you often discover strategies from known and new rivals.
The last two steps have hopefully helped you to radically open your perspective on alternative strategies. It is key that you fight the instinct to check feasibility too early. The mindset is that true strategy is only limited by your imagination. Resource constraints only limit tactics. In strategy, missing resources and capabilities can be accessed through partnerships, built, or acquired.
decide on the next step
Finding new winning strategies under uncertainty is above all a creative process. In this creative process you should engage also your stakeholders, thought leaders you know, and discuss early ideas with your colleagues across your organization.
Under uncertainty, it is not wise to break down an overall goal into actions, as the goal and associated actions will be subject to change. Instead, you identify three different types of actions:
- No regret moves: Yields benefits in all scenarios;
- Options: Develop a way to play in a market which is interesting but not certain to develop;
- Big bets: True entrepreneurial decisions, where you trust your insights into future markets, that you are ready to bet your organization on.
Integrating these actions allows you to formulate a consistent strategy that simultaneously acknowledges the uncertainty in the environment and provides a clear set of options to pursue over time. Ultimately, what is feasible for you will depend on the metrics by which you measure success, which in turn is linked to what your organization values most.
There is no guarantee that following this process will lead to success. The length of the leap that you will be able to make will depend on:
- Ability to reperceive: How well have you managed to integrate your teams and stakeholders in the scanning process;
- Ability to see systemic change: How well you developed and leverage on the scenarios and alternative strategies, working with your colleagues across the organization and your stakeholders;
- Ability to mobilize: Creating a purpose that matters for your organization, its members, as well as the community and maybe even the planet.