BrazilUpgrade strategic planning processes to tackle uncertainties
With the world increasingly driven by volatility and disruptions, strategists more than ever need to account for uncertainties in their strategic planning processes. Martin Mommersteeg, partner at M3 Consultancy, outlines four drivers that are key to ensuring strategic planning processes get the ‘upgrade’ they need.
1. Detect signs early on
Clearly define the potential risks for each of your business components and figure out how to detect them early on. If you adopt a more expansive view of potential risks and uncertainties, you’ll develop your ability to identify them.
It’s crucial to gather a lot more information – on macro-topics such as geopolitics and the environment and business-specific topics like technology, supplier certainty, and the labour market (for staffing purposes).
The number of variables currently tracked in their strategic planning processes tends to be less than 10, but may increase to 50 or 100. Advanced modelling and interpretation tools help build early warning systems for different time horizons.
Rather than trying to confirm what you expect, be on the lookout for surprises and be proactive on outliers (as well as what they might foreshadow).
2. Be prepared
Implement processes for developing, evaluating, and prioritising strategic options that go beyond short-term problem solving and deal with several plausible future scenarios. The latter help mitigate risks and define (unused) strategic opportunities.
The goal is to understand the various eventualities you might face and identify ways in which you could respond to them. Be open to outside-of-the-box ideas on new business models (including partnerships, reshoring, nearshoring, or insourcing), alternative sources, new product offerings that help meet customer needs, and advanced digital services.
Be sure to explore the conditions for success in each case, and stress test the portfolio of strategic moves against extremes (for example, through simulations). You don’t want to eliminate options here, but it’s wise to understand the impact and complexity. That way, you’ll be fully prepared if you detect signs that indicate you should take immediate action.
3. Act decisively
Uncertainties will always remain, so make sure you rely on two things: your ability to detect signs and your well-balanced set of strategic options to quickly take specific action should these signs require it. Hedge your bets and kick off no-regret actions fast. In the meantime, you can initiate other options with a small investment and gradually expand.
Prepare strategic options by creating detailed action plans, defining clear roles and responsibilities, and mapping the fastest path to launch. That way, you can shorten implementation lead times and ensure new strategies are actionable.
4. Build resistance and resilience
Disruptions are not a one-off event. Managing uncertainties also requires an ability to bounce back: have a close look at what happened and how your organization dealt with it, and draw your lessons from it.
Mitigation plans help you regain operational stability fast without throwing your organization into chaos. Lessons learned from previous disruptions can be used to enrich scenarios and enhance employees’ preparedness for acting swiftly and embracing bold moves.
If you think ahead, your organisation will become sufficiently agile to take action should an event occur. You’ll avoid confusion and reduce the risk of errors.
Improve rather than reinvent the wheel
Strategic planning is a continuous endeavour. You don’t have to reinvent your strategic planning processes to deal with uncertainties and gain an advantage. All you need to do is improve them so you’ll get better at detecting signs, defining bold strategic options, acting decisively, building resilience, and learning from previous events.
