Managing Uncertainty: Strategies for Surviving and Thriving in Turbulent Times

Chapter 2

Strategic anticipation

The capability to determine and the ability to implement a strategy that is highly responsive to an unpredictable and potentially volatile environment

The real risk is to be certain about anything.

Sandy Thomas, Foresight, UK Government Office for Science

There is maybe too much rigidity in the American system and therefore sometimes it misses the forest for the trees.

Ravi Kant, vice-chairman, Tata Motors

HOW QUICKLY AND EFFECTIVELY did companies respond to the financial crisis of 2008? What lessons did they learn about managing uncertainty? What does this tell us about their ability to anticipate and respond to uncertainty in the future?

The managing uncertainty survey carried out for this book found that most companies were late to spot the crisis. They did not believe the situation was serious until the fall of Lehman Brothers, a financial services firm, approximately one year after they should have known. Furthermore, most companies took another six months to respond, leaving an 18-month gap between observation and action (see Figure 2.1). Speed was a critical factor in how companies measured the effectiveness of their response. People who thought they made the right decisions usually made decisions quickly. People who thought they did not make the right decisions usually did not make decisions quickly.

FIG 2.1 Awareness of the impact of the financial crises

Source: © PA Knowledge 2011

The survey also found that the best companies consciously ...