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Recommended Readings: Business Strategy


Strategy Under Uncertainty by Hugh Courtney, Jane Kirkland, and Patrick Viguerie

The traditional approach to strategy assumes that by applying a set of powerful analytic tools, executives can predict the future of any business accurately enough to allow them to choose a clear strategic direction. But what happens when the environment is very uncertain? The authors argue that uncertainty requires a new way of thinking about strategy. All too often, executives take a binary view: either they underestimate uncertainty and come up with very accurate forecasts or they overestimate it, abandon all analysis, and go with their gut instinct.

The authors draw a crucial distinction among four discrete levels of uncertainty that any company might face. They then explain how a set of generic strategies-shaping the market, adapting to it, or reserving the right to play at a later time-can be used in each of the four levels. And they illustrate how these strategies can be implemented through a combination of three basic types of actions: big bets, options, and no-regrets moves.