When uncertainty provides the gift of competitive advantage
There are a lot of thought leadership articles circulating focused on the 3 phases to navigating the pandemic and subsequent economic impact. These include some variation of respond, recover, thrive.
In a recent discussion on the same topic I stated that the models all have one thing missing: scenario planning. No-one knows what the future holds, how long the health and economic impacts will last, what this will then mean for businesses and communities.
The government and enterprise sectors need to take a scenario planning approach in an effort to strategically make choices and navigate through a situation of such magnitude that we have no precedence on which to make decisions.
As a recent Harvard Business Review (HBR) article stated, “At the very moment when the present least resembles the past, it makes little sense to look back in time for clues about the future”.
Strategy development and renewal needs to include scenario planning in an effort to achieve strategic foresight. This needs to include possible scenarios around length of time and severity, not just the 3 phases of recovery.
It is also highly unlikely that these phases will be linear. Good scenario planning will ensure length of time includes time loops. We have seen world-wide a number of countries such as China, South Korea, Singapore, Saudi Arabia and Iran experience a second wave of Coronavirus. This is likely to continue until a successful vaccine is developed as research from King's College London indicates that any immunity to the virus is short-lived (up to 3 months). It may be that, like other coronavirus, Covid-19 could repeatedly reinfect people even with a vaccine.
The benefit of using scenario planning in strategy means that organisations will be better prepared for whatever the future may hold. In the enterprise sector, this translates to competitive advantage, and this competitive advantage can be in the form of: launching a new product or service based on projected demand, capitalising on M&A opportunities as part of your strategic foresight, or accelerated use of specific technology platforms to connect to customers and reduce costs.
This is the real crux of the matter: uncertainty is the mother of opportunity, and in opportunity lies competitive advantage.
A consequence of scenario planning is that opportunities are identified. This is precisely why it is so critical.
I was therefore pleased to see this recent article in HBR and share it with you as it provides a great guideline on how to get started.
Managing the future means managing uncertainty. Scenario planning helps to provide greater awareness of a possible future, allowing us to be the architects of our future.
Marion is a highly experienced and accomplished strategy, innovation and leadership professional with a focus on the enterprise and government sectors. She is a trusted advisor to CEOs and senior executives, providing practical and pragmatic solutions to the challenges they face. Marion is the Managing Director at Azolla Holdings Pty Ltd, a Board member, thought leader and member of an international entrepreneur association.