As the old Danish proverb goes, “it’s difficult to make predictions, especially about the future.” Or perhaps that was Yogi Berra.
Regardless, when we talk about business (or any other type of) strategy, what are we talking about but an attempt to predict the future? Indeed, why develop strategy but to outwit competitors and dominate your market. We persist in believing that with the right insights and methodologies we can successfully anticipate where the market, technology or tastes are going.
Whether it’s blue ocean/red ocean, disruptive innovation or something else, business schools and industry gurus are continually coming up with the latest insight that is sure to propel your particular company to unprecedented heights.
But if history is any indication, time after time, the sustainable competitive advantages are neither sustainable nor competitive for long. Being first to market may help for a time, as would high barriers to entry or some unique, patented technology. These could be turned into lasting advantages, if only the systems in which companies operate were to remain static.
Alas, the world is not thus. Natural systems, and human ones– which ultimately are simply extensions of nature– are dynamic and complex. Solutions may be found for a point in time, often by holding a number of variables constant, but these are not lasting solutions.
So, at one extreme developing strategies appears to be an exercise in futility. And we believe that it is– for the most part. What is valuable, however, is the planning and formulation itself. The very act of thinking about where you are and where you want to go leads to realizations about your own organization that may not be as readily evident otherwise.
So strategic planning has value but the strategy itself is less useful. We would go so far as to say that anyone who believes that they have a bullet-proof strategy for doing something is somewhat naive. But as long as you engage in a strategic planning exercise with your eyes open, without believing that you are going to end up with a guaranteed path to success, you are already ahead of the game.
But let’s not abandon the idea of strategies altogether. While it’s difficult to make predictions about the future it is not impossible to prepare yourself for potential changes in the system within which your organization operates. Our experience is that it is extremely valuable to develop the capabilities to deal with uncertainty, to be able to sense and respond in an agile manner.
It is not so much about skating to where the puck is going to be– because that ultimately involves an element of luck– but having the ability to handle the puck, wherever it ends up. This is an idea borrowed from nature, where it is the organisms that are somehow best suited to their new environment that survive while their cohorts do not.
In the natural world these organisms have not actively developed the characteristics that offer them a necessary advantage, they are simply the lucky ones, who happened to possess something useful. Similarly in the market environment, we may not be able to predict the product feature or market position that is going to confer advantage, but we may be able to rapidly develop it if we are nimble and have a good foundation from which to start.
It is ultimately our agility, adaptability and openness to uncertainty that will make us successful, rather than any particular business strategy.