Strategy In Turbulent Times: How To Design A Strategy That Is Robust And Future-Proof

• Title: Strategy In Turbulent Times: How To Design A Strategy That Is Robust And Future-Proof
• Author: Professor Kurt Verweire
• Published by: Lannoo Publishers
• Where to find it: https://www.lannoo.be/nl/strategy-turbulent-times

Regardless of what industry you’re working in or indeed where in the world you operate, turbulence has become something of a status quo. Whether we’re navigating geopolitical shifts, global conflicts, pandemics or the rapidly evolving technology that is running our world, it has never been more vital for businesses to future-proof themselves against what is to come.

Fortunately, companies do not have to face this challenge alone. Kurt Verweire, a Professor at Vlerick Business School, has built his expertise in helping companies to develop and implement effective business strategies, writing award-winning case studies and developing practical toolkits such as the “Strategy Implementation” and “Six Batteries of Change”, for industry leaders to follow. Transferring his expertise into practice, he also directs the Advanced Management Programme, teaches both MBA students and executives, and leads the Strategy in Action Platform at Vlerick, connecting with and coaching business professionals through uncertain landscapes.

His latest book, Strategy In Turbulent Times: How To Design A Strategy That Is Robust And Future-Proof, expands upon his work. We sat down with him to find out more…

Can you tell us about the inspiration behind your new book? What motivated you to write it?

In my role overseeing various executive education programs at Vlerick Business School, I’ve engaged with numerous managers and executives who shared a crucial insight: while traditional strategic thinking often emphasises ‘competitive strategy’-the relative positioning against competitors-many found that their companies’ performance wasn’t solely determined by this factor.

Despite crafting sophisticated strategies aimed at outperforming competitors, they discovered that other events held greater sway. Natural disasters, geopolitical shifts, supply chain disruptions, economic volatility, or the emergence of disruptive new business models could significantly impact performance. Unfortunately, conventional strategic models often fall short of addressing these specific challenges.

This realisation led me to delve into how firms can effectively navigate such unforeseen shocks and transitions. I sought to explore methods for developing and implementing a robust strategy capable of handling turbulence-providing guidance where traditional models lack in addressing these critical aspects.

What are the key takeaways or main ideas that readers can expect to find in your book?

From this book, several key insights stand out:

Firstly, navigating turbulent times requires a distinct discipline within strategy. I introduce the concept of ‘strategy rocks,’ encompassing three pivotal challenges firms face: (1) competing effectively (competitive strategy), (2) expanding beyond their core (growth/corporate strategy), and (3) managing turbulence itself (turbulence strategy). Each of these strategic perspectives comes with its own set of tools and frameworks.

Secondly, dealing with turbulence demands a different approach to strategic analysis. The focus lies in identifying significant, impactful change drivers and envisioning potential scenarios. By exploring these scenarios, one can begin formulating strategic solutions.

Thirdly, turbulent times necessitate different decision-making compared to competitive strategy. While the latter involves choosing where to operate and how to win, turbulent times prompt firms to consider pursuing business model innovation. This could involve launching new models within or outside their core business.

Lastly, crafting a strategy for turbulent times ranks among the most challenging strategic tasks. However, difficulty doesn’t equate to impossibility. The insights shared in this book aim to equip managers with the tools and understanding needed to tackle the turbulence challenge more effectively.

Who is the target audience for your book, and how do you believe it will benefit them?

This book caters to a dual audience-first tailored for managers and executives navigating turbulent environments. It provides invaluable insights into effectively managing turbulence, offering a wealth of examples and best practices illustrating diverse strategies for handling such challenges.

The book is also highly relevant for anyone interested in the field of strategy. the book convincingly shows how strategy in turbulent times complements traditional strategic thinking. There are several books published on turbulence, but most of those books focus on tactical recommendations. This book shows how strategy analysis, strategy formulation and implementation get a different meaning in this new context.

What do you think makes this topic particularly relevant or timely in today’s business world, or for the years ahead?

The world is changing faster and becoming more complex than in the past. Strategies and business models expire faster than ever before, and change is the only constant. We just went through one of the most impactful global health crises in recent memory, while geopolitical tensions are now leading to high levels of economic uncertainty. Technological revolutions will continue to change our lives, and people’s needs and demands will further evolve… The future ain’t what it used to be. And there are no signs that this will change in the near future.

The book helps managers to look at shocks and shifts (change drivers) in a structured and systematic way.

The book also identified four different turbulence strategies-core resilience, corporate innovation, core transformation and corporate transformation, and specifies when to use each of them.

For each of the four turbulence strategies, the book provides some clear examples. Those examples are then used to identify the do’s and don’ts that firms must consider when applying these turbulence strategies. Finally, each chapter concludes with a checklist to find out whether your company is ready to implement that particular turbulence strategy.

Can you discuss any specific case studies or real-world examples from your book that illustrate its principles in action?

The book contains many case studies. One of those explores how Gillette, the market leader of grooming products, gets challenged by Dollar Shave Club, and what Gillette has done to tackle the threat of a low-cost disruptor. Gillette has not been very successful though.

Please share some practical tips or strategies from your book that readers can immediately apply to improve their business or career?

When describing the four turbulence strategies, I present some successful case studies in greater detail:

• Core resilience: Fender (guitar company), Starbucks, Intel (facing the consequences of the Fukushima disaster), and Brahma (a Brazilian brewing company that became AB InBev).
• Corporate innovation: Nowjobs (a venture of House of HR, a European temping company), Scoot (the low-cost airline company of Singapore Airlines), and Daimler (Mercedes) mobility services.
• Core transformation: Hilti Fleet Management, Tag Heuer Connected Watch, and KBC’s digital transformation efforts.
• Corporate transformation: Schibsted (Norwegian media company), AccorHotels, and Barnes & Noble.

But there are many more examples described in the book.

How does your book add to or expand existing discussions on this topic?

Many strategy books addressing turbulence and disruption tend to narrow down to specific areas. Some focus solely on sensing and fostering corporate foresight, while others emphasise business model innovation. However, few present a comprehensive strategic framework to effectively tackle turbulence. This book is the exception to the rule.

Numerous books delve into sensing and cultivating corporate foresight-an essential aspect of strategising amidst turbulence. Yet, countering turbulence threats demands more than proficient strategy and scenario analysis alone.

Likewise, there’s a multitude of innovation-focused books guiding the creation of new business models beyond a company’s core. However, these resources often overlook the crucial strategy involved in developing a new business model within the core-a transformative process distinct from mere innovation.

In short, this book offers a comprehensive view of strategy in turbulent times-from strategy to analysis, over strategy formulation (making choices) to implementation. On top of that, the strategy formulation part is also quite unique-most management books identify two turbulence strategies (launch a speedboat or change the tanker). But this is not enough; you actually have four turbulence strategies.

Finally, what book(s) written by another author would you recommend as essential reading for your audience and why?

On the topic of turbulence and disruption, I would definitely recommend the books written by Costas Markides, Professor of Strategy & Entrepreneurship at London Business School. The most relevant books are:

• Markides, C.C. (2008) Game-Changing Strategies: How to Create New Market Space in Established Industries by Breaking the Rules, John Wiley & Sons, San Francisco, CA.
• Markides, C.C. (2021) Organizing for the New Normal: Prepare Your Company for the Journey of Continuous Disruption, KoganPage, London.

Another great book was written by Peter Hinssen:

• Hinssen, P. (2020) The Phoenix and the Unicorn: The Why, What and How of Corporate Innovation, Peter Hinssen & Nexxworks, Ghent

There are several good books on sensing and building corporate foresight:

• Day, G.S. & Schoemaker, P.J.H. (2019) See Sooner Act Faster: How Vigilant Leaders Thrive in an Era of Digital Turbulence, MIT Press, Cambridge, MA.
• McGrath, R. (2019) Seeing Around Corners: How to Spot Inflection Points in Business Before They Happen, Houghton Mifflin Harcourt, Boston, MA.

And there are many more on different aspects of the four turbulence strategies (in chronological order):

• Sull, D.N. (2009) The Upside of Turbulence: Seizing Opportunity in an Uncertain World, HarperCollins Publishers, New York, NY.
• McGrath, R. (2013) The End of Competitive Advantage: How to Keep Your Strategy Moving as Fast as Your Business, Harvard Business Review Press, Boston, MA.
• Sheffi, Y. (2015) The Power of Resilience: How the Best Companies Manage the Unexpected, The MIT Press, Cambridge, MA.
• O’Reilly, C.A. & Tushman, M.L. (2016) Lead and Disrupt: How to Solve the Innovator’s Dilemma, Stanford Business Books, Stanford, CA.
• Anthony, S.D., Gilbert, C.G. & Johnson, M.W. (2017) Dual Transformation: How to Reposition Today’s Business While Creating the Future, Harvard Business Review Press, Boston, MA.
• Stadler, C., Hautz, J., Matzler, K. & von den Eichen, S.F. (2021) Open Strategy: Mastering Disruption From Outside the C-Suite, The MIT Press, Cambridge, MA.
• Yates, L.K. (2022) The Unicorn Within: How Companies Can Create Game-Changing Ventures at Startup Speed, Harvard Business Review Press, Boston, MA.

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