Monday, September 19, 2005

Strategy in uncertain markets requires active waiting

Strategy in uncertain markets requires active waiting. That is what Donald N. Sull says in HBR of September 2005. Furthermore, he identifies a number of management principles for surviving and thriving in unpredictable markets. These principles, taken together, define "active waiting":
  1. Keep the vision fuzzy and the priorities clear.
  2. Conduct reconnaissance into the future. Send probes and watch for anomalies and gaps.
  3. Keep a war chest. Save cash for when disaster strikes or when faced with a golden opportunity.
  4. Maintain the pressure. During the waiting, focus on improving operational efficiency.
  5. Declare the main effort. Decide and communicate. Focus all resources on the golden opportunity.

Doing active waiting well requires from leaders that they are patient, disciplined and alert during the waiting process, and courageous and bold during the rare times of major disaster or major opportunity. Not many people are capable of aligning their leadership behavior to these crucial external circumstances.