Strategy Waves - May 2020

Welcome to the inaugural issue of my strategy newsletter.  I came up with the name “Strategy Waves” while sitting on a Caribbean beach in February.  Waves has multiple meanings in this instance.  Like actual ocean waves, this newsletter will be rhythmic – or monthly.  And some researchers now contend that brainwaves move across our brain like waves in the sea, suggesting that they are an important mechanism that contributes to perception, attention, and consciousness.  Each issue will contain three components:  an original post by me; a curated short list of reads about strategy; and a summary of a book I recommend.

I’m sending out the first issue during a unique time for all of us.  As I’ve reflected about macro effects of the past two months, I’ve concluded that we’ve largely experienced roughly one significant event per decade that caused major shocks in the system of systems.  Shocks that have changed our daily lives and decision making.  In 2001, it was a national security crisis caused by an act of terrorism and the subsequent decision to enter a war.  As the decade was changing over, we were squarely in the Great Recession and reeling from a financial crisis that no one in 80 years had felt.  And now a global health crisis has brought the world economy and our social communities to their knees. 
 
I anticipate that these shocks will become more frequent than once a decade.  While the interdependence across all systems in our global economy creates some buffer from these jolts, the increasingly complexity creates greater risk.   
 
So how do organizations foresee and prepare for the next crisis in the external environment in which they operate?  I’ve selected three strategy readings to help leaders think through these challenges.  The first two provide frameworks to help leaders plan what to do before the next crisis affects their organizations.  These articles were published in 2009 as our country stumbled from a significant financial crisis.  Their lessons are still relevant today.  Published in mid-April of this year, the third article can help leaders mitigate the current crisis. 
 
Finally, I end this newsletter with a summary of Range by David Epstein, a strategy book that applies to skill development.  Many of us will look to enhance our skills to remain competitive in today’s changing labor economy.  A science writer, Epstein, tackles the commonly held belief that an elite performer is developed by specializing early and practicing intently above all else.  Parents, take note:  pushing your four-year old to practice her freestyle stroke daily is unlikely to make her the next Katie Ledecky let alone a critical thinker who can independently solve her own problems as a young adult. 

Curated Reads on Strategy

1.  “The Crisis: Timing Strategic Moves,” a McKinsey & Company paper
Published at the beginning of the Great Recession, the authors’ approach of using scenario analyses to guide whether to make strategic investments in a company now or wait until signs of greater economic recovery also applies to our current situation. 
 
2. “Seize Advantage in a Downturn,” in Harvard Business Review
In 2009, two Boston Consulting Group partners recommended stabilizing the business and only then identifying ways to capitalize on the mistakes of rivals during an economic downturn.  Their approach contains many lessons for today’s crisis.
 
3.  "Preparing Your Business for a Post-Pandemic World,” in Harvard Business Review
Two professors from the Copenhagen Business School in Denmark put forth a five-part framework to help businesses analyze and decide how to bounce back from the crisis caused by COVID-19.