The pressure of doing business today, of beating the last quarter and making the next, is too often an impediment to deeper strategic conversations that your organization ought to be having. You need to see the big picture, and in too many organizations the big picture isn't big enough.  To develop a much broader view, ask associates to write down their ideas about the following questions. Make it clear that responses may be shared (either anonymously or with personal attribution) to stimulate group discussion about topics that the executive team really should be addressing.

1. What strategic issues are of most concern to you in your current position or more broadly for our organization as whole?  Speaking truth to power is difficult, as the grandson of former Secretary of State George Schultz learned when he questioned bold claims by start-up Theranos about using tiny blood pricks to screen for an array of diseases.  Nearly everyone tried to muffle him, including his grandpa, who got him a job there and served on the board.  In contrast, when Alan Malally became CEO at Ford, he instilled a culture of brutal honesty, with great success. 

2. What is your typical time frame for strategic decisions and long term planning? How many years out are you thinking and what is the business scope you normally consider, from local or regional to global?  Leaders have to know since they, and their boards, need to think longer term and farther afield than the management team; if not the leaders, who will? When I was at Shell's planning group in London decades ago, our global scenarios looked 10-to-20 years into the future, even though executives got reposted every 5-to-7 years.

3. What would constitute some very bad external developments or scenarios for the   business, including social, political, economic, ecological, legal and regulatory forces or technologies that are beyond your control? As Jeff Immelt wrote after becoming CEO of General Electric in 1991 "I could never have forecast so many tail-risk events hitting: 9/11, Enron, Hurricane Katrina, Fukushima, the global financial crisis." It underscores that farsighted leaders should look for black swans, weak signals and think the unthinkable.

4. Conversely, what especially good external developments or scenarios could plausibly happen over the next five years, covering perhaps the same but also different topics, forces, themes or issues?  Good news scenarios are psychologically easier to envision but can still easily be overlooked or misconstrued.  Few economic analysts, for example, anticipated the high synchronized growth rates among major economies around the world in mid-2018 which propelled equity markets to record highs.

5.  More fanciful yet, if you had a crystal ball, what would be the top three questions you would ask in order to help you better perform your current leadership responsibilities and/or help the company overall? As Voltaire counseled: "Judge a man by his questions rather than his answers." For example, in financial services, what future surprises might  be as big as PayPal or Apple Pay, or the various regulations imposed after the Great Recession? Or in terms of new technologies, will 3D-printing have more impact than say, block chains, by 2025 in your business?                                                                        

6. What are some current or upcoming strategic decisions for which some of the above scenarios and/or uncertainties are especially relevant, and why? Suppose your big upcoming decisions are about opening a new office, launching a new product, or entering   a promising strategic partnership. You now need to examine how these possible moves play out under a really good vs. bad scenario and some in-between cases as well.  In short, try to stress test your choices. For example, how thoroughly did IBM examine  possible setbacks in AI when making that promising technology a "strategic    imperative" more than ten years ago, with application in healthcare and beyond?  

7. Which external issues are the most important for you to track over the next 12 months, either for your own area or the organization more generally?  What metrics would  you ideally monitor?  Forward-looking measures are clearly better than rear-view mirror     ones. Your early warning dashboard should be tied to both your strategy and external scenarios.  If you want to track shifts in consumer preferences or service quality for instance, look at customers you lost and why. If you ask them, and know how to listen with a third ear, you can learn a great deal from them, your rivals and your own people.

8. What significant external developments were spotted too late in the last five years by you or the organization; why do you think these blind spots occurred? Also, what important developments did you spot ahead of time; what helped you or the firm stay abreast of these undercurrents? A decade ago, one major European chocolate maker was totally blindsided by the merger of Mars and Wrigley. As usual, various weak signals foreshadowed this surprise, but due to poor information-sharing the dots were not connected.  In contrast, Adobe sensed in 2008 a shift of packaged software to the cloud because its new CEO Shantanu Narayan excelled in peripheral vision, curiosity and in challenging conventional wisdom.

Once the right issues are surfaced, various approaches can then be followed to develop suitable responses, such as resolving pressing choices near term or developing a sharper strategic vision for the long term. The leader's imperatives here are to start the strategic conversation from the outside-in, make room for diverse and even unpopular inputs, develop an inclusive process, and respect uncertainty by not trying to predict what is unknowable. Then, test the robustness of any decision or strategy against multiple scenarios of how major external uncertainties could play out.  The broader these uncertainties are, the more flexibility should be built into your strategy, say by using an options approach when making large investments. Relatedly, leaders need to reward alertness to external changes and foster organizational agility, so that quick actions can be taken when needed.  The game today for any executive team is learning how to see sooner and act faster to stay ahead in an increasingly turbulent and uncertain environment.

 

 

Published on: Oct 30, 2018