20/20 Foresight: Crafting Strategy in an Uncertain World [Hardcover]

However, for companies that are up-to-snuff in having a basic capacity for strategic thinking (and it's hard to understand when a company these days is not up-to-snuff, given the expense of strategy consultants and the lack of expertise that their "green" consultants possess), the tools and approaches summarized in this book are (or should be) old hat. Contrary to what the introductory chapter implies, most of the tools from so-called "recent work" have actually been around for decades and have been taught as part of MBA and other master's degree program curricula for a long time. Serious game theory dates from the late 1970s, scenario planning became more widely known in the early to mid 1980s (a decade after developed by Royal Dutch Shell), real options analysis came into its own in the late 1980s, and forecasting/monte carlo simulation have been around for a long, long time. The book also implies that the purveyors of these tools claimed to possess " *the* solution to generating and evaluating strategies under uncertainty." Well, I don't think the creators of the tools did that... that behavior is more the territory of consultants and authors published in HBR (the publication with the fewest footnotes of any journal in the field, all the better to make old ideas seem new, which is a gripe for another forum). To my knowledge, having personally received this training and kept up with the "pop" articles in each of these tool areas, very few authors have made such claims. (To this book's credit, it is heavily footnoted.)

Nonetheless, it is helpful to have much of the literature summarized together into one book for the lay executive who hasn't thought much about these issues before or who hasn't received this kind of training. The book might also be helpful to antitrust regulators, who are sometimes too eager to see monopolies in industries that are still subject to considerable flux (the Microsoft monopoly *not* being such an instance).

One other minor flaw of the book is its straw-man attack against the typical company's "strategic-planning and decision-making toolkit", which implies that this book will somehow be revelatory to business executives. This straw-man-approach-to-strategy that the book serves up as whipping boy is more than a decade out of date. As most readers recognize, the attack is a thinly veiled criticism of Michael Porter, the intellectual champion of the "positioning school" of strategy. While the attack on Porter is spot on, the book's straw-man attack on strategy-as-practiced is not. Personally, I think the attack is just "positioning" to make the book's topics look more fresh. Criticisms about the static-ness of Porter's writings have been around for many years. Thus, the particular company that this book serves up to be the whipping boy (one of the regional Bell operating companies)--which relies only on a Five Forces or Value Chain analysis--is only reflective of a company that slept through the last decade worth of strategy and that has poorly trained planners. Strategy was, is, and continues to be more than the narrow microeconomics of Porter. Thus, to suggest that the book will suddenly open the eyes of company CEOs and analysts to the tools of dealing with residual uncertainty is, I think, overstated. As stated at the top, this is a good, concise handbook, but there's not much here that's new.

* Should we shape or adapt?

* Should we begin the process now or later?

* Should we focus or diversify?

* Which new tools and frameworks are needed?

* Which new strategic-planning and decision-making processes are needed?

Of course, Courtney fully realizes that the revelations of the STI research can only guide and inform appropriate answers to questions such as these. He agrees with Mike Hammer that searching for a "silver bullet" is a fool's errand, noting that "there [is] no easy one-size-fits-all solution that could be translated from theory into practice. Business strategists needed new theory [and, in italics] new practices if they wanted to make better strategy choices."

At the height of the Cold War, I recall someone noting that Russian historians could predict the past with absolute certainty. This book's title does not suggest that if you read this book, you can see the future. ("Man plans and then God laughs.") Rather, instead of burying uncertainties in meaningless base case forecasts or avoiding rigorous analysis of uncertainties altogether, Courtney suggests that we "embrace uncertainty, explore it,, slice it, dice it, get to know it." If we do this well? "[You] will reach a wonderful goal: 20/20 foresight." The best available information serves as the basis of the most reliable forecasts which, in turn, improve the chances of devising the soundest strategies.

After summarizing the appropriate toolkit for each level of residual uncertainty (see figures 6-1 through 6-4), and having also suggested various tools and frameworks needed to develop 20/20 foresight, Courtney offers five additional tools in the Appendix: The Uncertainty Toolkit. He briefly but brilliantly explains how to use scenario planning, game theory, decision analysis, system dynamics models, and management "flight simulators." Although this book will obviously be of substantial value to senior-level executives in larger organizations, I think it will be invaluable to others such as CEOs and other decision-makers in small companies. The challenge for all of them is to "tailor strategy to the level of uncertainty," whatever the nature and extent of their competitive marketplace may be. Here in a single volume is about all they need to begin the process. Another thought: This book would be an excellent choice as the basis of a one-day or (preferably) two-day offsite executive "retreat" for strategic planning. Reading it in advance would be required. The first two chapters would be excellent for assisting situation analysis, then on to the next five chapters which could serve as the core of the agenda. (I also recommend that Hammer's The Agenda be consulted, at least by the person who leads the group discussion. And, by the way, that person should NOT be the CEO.) The session would conclude with a review of the consensus achieved, followed by a discussion of how to communicate and collaborate effectively while using various tools, including the five recommended in the Appendix.

Courtney would be the first to point out that, over time, other sources of information and guidance may become necessary. For that reason, he includes clusters of annotated "Recommended Readings" to assist his reader's selection process. Thoughtfully, he adds to their number with other suggestions within his extensive notes.

For at least some individual executives and some organizations, this may well prove to be for them the most valuable business book published during the first decade of the 21st century.

To those who share my high regard for it, I specifically want to recommend (again) Hammer's book as well as Jim O'Toole's Leading Change, Jason Jennings' Less Is More: How Great Companies Use Productivity As a Competitive Advantage, Peter Schwartz' The Art of the Long View: Paths to Strategic Insight for Yourself and Your Company, and finally, Carla O'Dell's If Only We Knew What We Know: The Transfer of Internal Knowledge and Best Practice.

Most books out there (Porter's Competetive Advantage, Co-opetition, Competing for the future, Decision Analysis books, and many more) talk about one tool/methodology or one way of resolving the strategic problem. This book takes a different path in that all good tools are used together and it is hoped that by viewing the well defined structured problem using these tools would help you come to conclusions in differing levels of uncertainity (obviously the problem context has levels of uncertainity or risk).

Four levels of certainity are defined and tools that would help under those circumstances are clearly listed. For most of the tools - how to use those tools is upto you to figure out. However, having said that the Appendix section does lists further reading, that would help you get started in learning about _some_ of the tools used in the book. I found the tools lists to be very useful. After reading the book I knew _exactly_ what tools to use under my circumstances.

If you have spent time reading strategy (Mintzberg, Ghemawat, Hamel, Kaplan et al, Porter, Prahalad, Day, systems engineering approaches...), you'll find good use on how to put togther all those analysis methodologies into one framework and come to conslusions.

I wish the book actually walked through some cases and used the tools listed to arrive at conclusions. Cases in differing levels of uncertainity would have been very helpful (hence 4 stars).

Finally, this is my first McKinsey book (McKinsey brand leveraged book) among others that walk the talk (others being Valuation and the McKinsey Way/McKinsey Mind).

Recommended.