Visualize a baseball game. A fast runner is on first base, looking to steal second. The runner takes a lead, then plants himself in a flexible stance. He’s ready to run in either direction: to second base if he gets a chance to steal, or back to first base if the pitcher tries to pick him off. Using that stance in business is the subject of this book.
The economic outlook is uncertain—this year and in the future. Economists failed to predict the recessions of 2008, 2001, 1990 and 1982. Technology is changing faster than ever before, forcing businesses to confront different consumer demands as well as new production processes. Social attitudes also change faster in a more connected world. Gay marriage, marijuana and “pink slime” are all cases where public thinking changed rapidly. On top of these issues, government policy has moved in unprecedented directions, with highly uncertain results.
The flexible stance is hard for business leaders, who usually rose to top positions using the sprinter’s stance: focus on the tape 100 meters away, looking neither left nor right. Traditional corporate planning tries to develop the one perfect forecast of the future, then optimizes the company for that scenario. Unfortunately, the future often does not cooperate.
Techniques for a more flexible stance include evaluating everyday decisions with an eye to whether they enable adjustment to change or inhibit adjustment. Contingency plans should be developed for both upside and downside possibilities. Faster execution reduces risk. Sometimes—but not always—diversification can increase flexibility. The successful business leaders of the future will be humble about their ability to predict the future, but aggressive in developing the flexibility to thrive whatever the future brings.
1 – THE NEED FOR A FLEXIBLE STANCE
Business leaders must adopt a flexible stance, ready to advance if conditions are favorable, but also ready to retreat if the external environment turns negative.
2 – THE FAILURE OF FORECASTS–YOU WON’T SEE THE NEXT RECESSION COMING
Economists failed to forecast the last four recessions; why you cannot expect them to predict the next one.
3 – TECHNOLOGICAL PROGRESS ACCELERATES
The technologies that will impact your business in the future are difficult to anticipate today.
4 – BUSINESS IS A SOCIAL ACTIVITY
Attitudes about business products and practices are changing quickly and will continue to change in unpredictable ways.
5 – GOVERNMENT AND BUSINESS
Government’s impact on business is hard to anticipate because of polarization, complex legislation, unprecedented policy and unintended consequences..
6 – COMPETITION LESS PREDICTABLE
New competitors are popping up in many industries: Uber, Amazon and pop-up stores are examples, enabled by low capital needs, short production runs and globalization.
7 – TODAY’S DECISIONS, TOMORROW’S FLEXIBILITY
Common business decisions may increase or decrease the company’s flexibility to expand or contract in the future.
8 – MAKING PLANS THAT WILL HELP YOU THROUGH HARD TIMES
How to develop contingency plans that enable your company to survive the bust as well as to be ready to thrive in the recovery.
9 – GOOD TIMES BRING SURPRISING CHALLENGES
Good news comes with challenges of how to increase output and how to finance expansion.
10 – STRATEGY IN THE FLEXIBLE COMPANY
Traditional strategic planning was based on the one best forecast of the future. The new strategic planning recognizes the value of flexibility in an uncertain environment.
11 – FASTER IS SAFER
Business processes takes time, but bad things can happen while waiting for payment, so speed up where you can.
12 – DIVERSIFICATION AND RISK
Diversification is not as useful for reducing business risk as it is for investment risk, but some diversity can help cope with uncertainty about the future.
13 – MANAGING FLEXIBLY IN AN INFLEXIBLE COMPANY
Many bosses consider contingency plans to be defeatism. Here’s how to thrive in such an environment.
14 – PUBLIC POLICY AND THE FLEXIBLE STANCE
Governments are vulnerable to unforeseen change. Here’s what citizens should want their governments to do given the uncertain environment.