During such uncertainty as we are all currently facing in our post-pandemic world, it can be difficult to think of the future. You may be thinking along the following lines:
I had a plan, but what is the strategy now for our business, organisation, services, and teams?
How should we be responding; it is difficult to think of the future and our alternatives
Do we have any data or information from which I can gain some insight into the possibilities?
What if we choose a certain strategy or plan and it isn’t right?
How can we make decisions when we do not know, or is it too risky?
Yes, I am sure there are lots of leaders thinking of how they lead their teams, services, businesses and organisations when faced with such uncertainty. But how should leaders react?
Should they make a big bet, hedge their position, or just wait and see? How do we get to make well-informed decisions when the environment is very complex?
There are no simple answers to such complexity. It is complicated, and no one knows currently what the future holds. However, doing nothing for many of us is also not an option.
To help with our thinking about future strategy in times of uncertainty we have put together some guidance in two blogs. The first blog takes us through the things to consider in looking at future strategies and the second blog looks at the options we have in taking our strategies forward, known as strategic postures.
So, why is it important to think of the future and have a strategy, even if the future is so vague?
As Steven Covey speaks about in habit 1 - being proactive - it is crucial as a leader that we take responsibility for our own actions instead of reacting to or worrying about conditions over which they have little or no control, proactive people focus their time and energy on things they can control. So, in looking to the future, is it worth focusing on developing a strategy?
I have been reflecting on the current situation for our business, our clients, and networks and how they may be trying to think about future strategies in such uncertainty.
The current situation reminded me of the work of Hugh Courtney, Jane Kirkland, and Patrick Viguerie who talk about developing strategies in uncertainty using a 4 level framework.
Currently it is still worth considering future strategy even when faced by such uncertainty. I am sure your colleagues and teams are looking to you to guide them, but you don’t have all the answers. Thinking proactively and engaging others in similar thinking can help not only to look at alternatives and be proactive, but also to help with problem-solving as a team. We know as leaders we don’t have all the answers, but we can start to be brave and take the time to look at possible strategies that can inform how the future might look and help you lead your team or support the team to look at the art of the possible in an inclusive and engaging way.
In this blog series we are starting with thinking through the current situation and possible future strategy. Have a go at the following with a colleague, your teams or your networks. You can do this through virtual team meetings - yes, it will need some preparation, but putting time into some strategic thinking of the possible options does mean that you are taking control as well as empowering others to think about the situation, give their input and influence where you can.
Confronting Uncertainty
There is no doubt that for many of us there is currently a level of uncertainty. With the help of the framework described below we can start to analyse our situations, gain some information and knowledge and look at some of the strategic factors that might influence our thinking and help to develop our intentions and strategies over the forthcoming months.
To help you to undertake this or think through your approach, please find some steps you can take. This can be used as a self-coaching or a facilitated approach to use with your teams. The steps do not have the answers but aim to help you to think about future strategy, the possible approaches and alternatives you can consider.
Step 1. What information do you have?
It is worth considering what information you currently have or information you can assume or predict for your services or products. Here are some key things to ask or consider:
Which future products, services might be needed given the current situation?
What are the demographics telling us, what data do we currently have or need?
What are our customers saying they need? This can be current or possible customer demand. This can also be any customer, e.g. patients, the community, service users etc. How might this change in future months?
To help with this you can undertake a brainstorm using tools like PEST or PESTLE. This can help you make some assumptions, looking at each factor in turn.
The political factors to consider - what is happening, legislation, policies, guidance
What is the environment like, what do we need to think about?
The economic factors, finances, like projections, what may clients pay for, how are others responding, etc
The socio-cultural factors that need considering, attitudes, social factors, beliefs, generational shifts in attitude likely to affect what you are doing, trends etc.
The technological factors, changes in technology you need to use, infrastructure/ resources needed, what are competitors using, how can you be different?
It can also be helpful to reflect on your prior learning. Think of previous circumstances when things have not been as clear as you would have liked.
What did you do? Is there any previous learning you can bring to the current situation?
How did things work out in previous situations and how can you use the learning to help here and now?
From undertaking this analysis, some of your factors will be known. You may also be able to make some assumptions about some of the unknown.
It is likely that there is still some uncertainty and this is okay. The uncertainty that remains after the best possible analysis has been undertaken is what we call residual uncertainty.
To help determine the residual uncertainty, Hugh Courtney talks about thinking about this as a 4-part framework to help with determining the level of uncertainty. Using the four levels of residual uncertainty can help you understand where you are and possible approaches to determine your next steps.
Step 2. The four levels of residual uncertainty
The following 4 level framework can help you to determine the level of uncertainty you are facing. Look at each level of uncertainty to understand.
Level 1: A clear enough future
At level 1, leaders can develop a single forecast of the future that is precise enough for a strategy to be developed. It is felt that at level 1, the residual uncertainty is irrelevant to making strategic decisions. To help determine the strategic intentions, teams can use tools such as Michael Porter's force field analysis to help develop your strategy.
Level 2: Alternative futures
At level 2, the future can be described as one of a few alternate outcomes, or discrete scenarios. Analysis cannot identify which outcome will occur, although it may help establish probabilities. Most important, some, if not all, elements of the strategy would change if the outcome were predictable. When this is the situation you may need to think through several future alternatives/scenarios and the best possible outcome for each. Here you will need to look at a range of factors, the 4 P’s, what your competitors are doing or likely to do within each alternative, and what might be the best actions for you?
Once you have a few alternatives it is worth considering, from these alternative strategies, what are the risks in each alternative and what do you need to think about doing next. It is important to have some next steps which can help you think about the approaches you may use etc. Once decided upon these it can be good to ask:
when you will look again at each alternative?
What will help you reach the best alternative scenario/outcomes?
It is important at this time you monitor the environment/competitors/the risks to each and do some modelling of each situation carefully and when ready choose the outcome you feel is more likely.
Level 3: A range of futures
At level 3, a range of potential futures can be identified. That range is defined by a limited number of key variables, but the actual outcome may lie anywhere along a continuum bounded by that range. There are no natural discrete scenarios. As in level 2, some, and possibly all, elements of the strategy would change if the outcome were predictable.
As you did in level 2 you need to discuss a set of scenarios which describe the possible future outcomes. Deciding upon your scenarios can be more difficult at level 3, we would advise to keep this as simple as possible by developing no more than 4 alternatives that you feel would be appropriate to the future from what you know now from your situation and analysis undertaken. Once these are developed you can look at each description of the possible future outcomes. Once these are developed look at each one and ask albeit roughly
Which one of these might be the likely outcome?
What are the strengths, opportunities, threats, weaknesses, and risks for each scenario we have looked at?
What are the things we need to focus on so we are kept alert and understand other possibilities or outcomes that will affect each scenario?
When and how do we do this?
Level 4: True ambiguity
At level 4, multiple dimensions of uncertainty interact to create an environment that is virtually impossible to predict. Unlike in level 3 situations, the range of potential outcomes cannot be identified, let alone scenarios within that range. It might not even be possible to identify, much less predict, all the relevant variables that will define the future. Level 4 situations are quite rare, and they tend to migrate toward one of the other levels over time. Whilst it is difficult to determine the variables, as Covey states, taking control and trying to think of probable alternatives is better than doing nothing.
In level 4, it is worth thinking through variables and some likely alternative futures. This will mean that you can then do some analysis of identifying patterns indicating possible ways that things may evolve and what strategies will be required in order for you to understand the situation and when it is best to re-look at things, so you are equipped and ready to respond quickly. Like the questions outlined in the other levels, you may want to ask:
When and how will we need to look at the information and the alternative futures?
What information do we have now, and what information is needed to help us understand the possible scenarios/possible outcomes/actions needed?
How will we do this? When will we do further broad scanning? When should we meet again to explore our options, etc?
Once you have analysed your future possibilities it is worth now thinking of the next stages. When you are ready, you can move on to our second blog which can help you think about your next move, otherwise known as your strategic postures. If you would like to speak to us about how you can undertake this with your team, why not get in touch at information@weareprospect.com or email jackie@weareprospect.com
Jackie Barringer – Senior Associate
References
Steven Covey - The 7 Habits of Effective People
Harvard Business Review, November-December 1997, Strategy in Uncertainty byHugh Courtney,Jane Kirkland, andPatrick Viguerie