Pressure-Test Strategic Decisions

Every leader wants to avoid major strategic mistakes, but, in a complex world, it’s hard to anticipate all the forces that might impact your goal. It’s vital to find weaknesses in your strategies before you implement them — and developing a rigorous process to do so.

In the heat of battle, strategic planning that’s incomplete or simply wrong causes leaders to revert to on-the-spot decision making. While sometimes necessary, making it up as you go is more often associated with failure and is often a symptom of ineffective or inaccurate anticipation of competitive moves or environmental shifts.

Here are some techniques that can help executives anticipate problems and change course when necessary.

Build situational awareness

In the business world it’s crucial to make sense of the environments in which we operate and foresee how different factors will affect our decisions. One way to build one’s situational awareness is to talk through alternate realities. Although this sounds like science fiction, alternative realities are basically hypotheticals. We think X will happen, but what if Y or Z happens?

To develop better situational awareness, start by forming teams and tasking them to develop alternatives based on different views of the same situation. For example, what if a new competitor enters the market earlier than expected? What could they do that would surprise and/or outmaneuver us? What if they are delayed; what types of things might they do to try to recover and penetrate the market more quickly? Could any of their actions be extreme or desperate? What actions could and should our team consider mitigating or blunting the risk in these alternate scenarios?

The next step is to compare these hypotheticals collectively and then determine what counter measures will have the most impact.

Small investments of time can result in new insights about your organization’s readiness, and your leaders’ acumen, that would have gone unnoticed until crisis.

Develop an outside-in perspective

Frequently, there are ancillary assets or capabilities that are often considered to be a “cost of doing business.” These could include a controlled global supply chain, unique abilities to test compounds, proprietary communication channels with key constituents, unique manufacturing machinery, etc. Think to yourself: In future scenarios, could any of these become new lines of business? If your environment changes unexpectedly could any of them help you to adapt?

In companies, an outside-in perspective can help shape an honest view of your organization’s strengths (and weaknesses). Customers can be a great source for this and forming a strategic advisory council is another option.

Game it out

The US Military has become an expert in preparing for combat operations using war games.

War-gaming exercises around critical decisions can be used in business. The best way to do this is to assign high performing managers to lead “opposing” teams, which should be made up of individuals with expertise across relevant functional areas. Before the exercise, make sure to prepare a background that outlines the general challenge and provides specific information and data. A best practice is to task the line area most responsible for the situation with organizing and leading the overall exercise — and to make sure that each group presents their findings at the end.

Form diverse, strategic groups

Finally, form strategic initiatives groups, and populate them with people who can analyze problems from various perspectives.