by Hugh Courtney, Jane Kirkland, and Patrick Viguerie
What makes for a good strategy in highly uncertain business environments? Some executives seek to shape the future with high-stakes bets. How should executives facing great uncertainty decide whether to bet big, hedge, or wait and see? Of course, managers can discuss alternative scenarios and test how sensitive their forecasts are to changes in key variables, but the goal of such analysis is often to find the most likely outcome and create a strategy based on it. That approach serves companies well in relatively stable business environments. But when there is greater uncertainty about the future, it is at best marginally helpful and at worst downright dangerous.