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WHAT’S THE FUTURE OF STRATEGY?

Strategy seeks to prepare the organisation for the future. But why can’t we see the future as clearly as we’d like?

The fundamental laws of physics are symmetrical in time — both in classical Newtonian physics and in general relativity theory. So, in principle, the past and future can be completely calculated from the laws of physics.

Unfortunately, we know that the “arrow of time” also conforms to the concept of entropy — ie: in systems of many components, the order in the system will break down as we move along this arrow.

This means that the nature of the future will change as we move closer to it. This uncertainty is what “spoils” our attempts to predict and plan for the future. So, if preparing the organisation for the future means we are unable to predict the future — what is the future of strategy?

It seems that strategy should focus on developing the organisation’s capabilities for resilience across a range of futures. Resilience is not just the ability to stand up after being knocked down — this is too costly for organisations and people’s livelihoods. Resilience becomes the ability to thrive across a range of future conditions.

This is what scenario planning does. Perhaps one of the most powerful tools for becoming anti-fragile.

PERCEPTIONS ARE NOT REALITY

Much of what we think we know is wrong! This provocative statement emerges from the latest Ipsos “Perils of Perception” study. It demonstrates that much of what we think we know across a diverse range of topics is wrong.

It seems as if there are three reasons for this phenomenon.

1) We have a reluctance to accept scientific and research evidence in a particular area. This is often because the facts are continuously evolving — knowledge and research is not static. And the science is often complex and difficult to understand.

2) We seem to have a “blind faith” in best practice and what has worked before. But all we know about complex systems suggests that these systems are highly unpredictable and each responds in a unique way. Using the same approach in different systems is likely to produce different outcomes.

3) We often rely on “hope” and “wishful thinking” in the pursuit of growth and change. Many strategies are characterised by visions to be “the best” and to “dominate” a market. These “hockey stick” strategies are often completely unrealistic, fail to use objective data, and fail to produce the expected outcomes.

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