Does your life seem more uncertain today than it did before? With the talk of inflation, tariffs and DOGE cuts; with wars raging in Ukraine and the Middle East; with violent summer weather and AI poised to disrupt everything, if you’re like me, you might be feeling a bit overwhelmed.
Turns out, it isn’t just your imagination. The World Uncertainty Index shows baseline uncertainty at 5x what it was in 1990. In the U.S. it has increased 5x in just the past year. High-uncertainty events are occurring more often and each major spike is more severe than its predecessor. The charts below, from the Federal Reserve Bank of St. Louis, illustrate global and United States uncertainty levels since 1990.[1]
Global Uncertainty Index:
United States Uncertainty Index:
For business leaders, and especially strategy leaders who are responsible for making coherent choices/bets that create value for their organizations, the increasing uncertainty and complexity of the business environment has made that task even harder.
A recent McKinsey article, “How Strategy Champions Win” discusses how the best companies manage uncertainty. [2] In McKinsey’s research, two key differences emerge between Strategy Champions and other organizations.
Leverage Strengths in Mobilizing Resources in Stable Environments
Within a framework of three strategy phases – design, mobilization, and execution – Strategy Champions are better at the mobilization phase – translating strategic choices into organizational readiness by allocating resources and aligning leadership teams. This runs counter to the widely accepted notion that strategy is only about making choices and execution.
In times of low uncertainty (i.e.: more stable environments) Strategy Champions leverage that strength and explore bold moves that can disrupt the status quo, relying that ability to mobilize resources and develop capabilities to change the competitive dynamics.
Identify and Align on Strategic Challenges in Uncertain Environments
In times of high uncertainty when multiple futures seem plausible, Strategy Champions recognize that changing business dynamics increase risks and generate new opportunities. They shift their focus to aligning on the strategic challenges – monitoring to identify and understand patterns in the changing landscape, and socializing them with their leadership teams. This enables them to align on the developing risks and opportunities and move more quickly and capably than competitors when the time is right.
In my world, we see clients shift from projects that deeply explore pre-identified opportunities and move toward programs that continuously monitor and report on the changing environment. In doing so, they help align their leadership teams to identify and take advantage of the evolving risks and opportunities.
So, what should you do if you are a strategist during these turbulent times? A Strategy Champion would think less about how to outmaneuver and outperform the competition with big, bold investments and think more about how to outsmart the competition by identifying and aligning on emerging risks and opportunities before rivals do.
About Line of Sight Group
Line of Sight Group is a leading market and competitive intelligence agency connecting market, competitive and industry insight to strategic business challenges since 2002. Through our advanced and proven competitive, market and industry intelligence, we help organizations better understand their business opportunities and threats, and guide them on where to play, how to win and how to get there.
Before founding Line of Sight, Steve worked in research and strategy groups at three Minnesota corporations including Optum where he led the market research and intelligence function. Today, he manages a team of highly-trained business sleuths who help clients see beyond the noise and move ahead of their competition.
Our Analysis services provide in-depth market and competitive analysis while our Intelligence services provide ongoing monitoring of your markets, competition and external business environment. Visit our website to learn more. www.lineofsightgroup.com
[1] https://fred.stlouisfed.org/series/WUIGLOBALSMPAVG#
[2] https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/how-strategy-champions-win?cid=wkndrd-eml-nsl-mip-mck-ext—–&hlkid=52156dc300e04abd9edc3f94a7d93bb1&hctky=14715009&hdpid=6dcf1676-6a9f-47f6-96b3-5209f5e55d30