Blog #4: Taking Strategy from Development to Implementation

How should a company deal with uncertainty when making a decision? In this course, we have seen many examples of uncertainty causing a company to falter: lack of foresight in a rapidly-changing industry landscape; making investments prematurely based on assumptions that had a high potential to change, and then did; incorrectly holding things to be constant that are in fact variable. In each of these instances, the companies in question have implemented strategies that were developed without a thorough evaluation of the level of certainty in each assumption, which undoubtedly would lead some companies to take the approach of waiting until every factor is certain before making decisions to implement their strategy. Not only is this impossible – nothing can ever be known with full certainty – but it would also cause companies to significantly delay their decision-making, allowing competitors who have quickly made decisions an advantage over them.

Decisions must be made even if – in fact, especially if – competitors’ moves are unknown, and the dust of an emerging industry is still settling. Two of the articles this week gave instructions for how companies can evaluate uncertainty and use it to aid the decision-making process.  In the McKinsey Have You Tested Your Strategy Lately? article[i], one of the questions for detailed pressure-testing a strategy asks, “does your strategy embrace uncertainty?” Per the article, "rigorously understanding the uncertainty you face starts with listing the variables that would influence a strategic decision and prioritizing them according to their impact."  Meanwhile, the Bringing Science to the Art of Strategy article[ii] emphasizes the importance of specifying the conditions for success by describing what must be true for any of the devised possibilities to be strategically sound. This approach encourages a more collaborative environment, but it also forces people to consider how confidently they can assert their assumptions that act as the foundation of their strategy. Taken together, these two tactics should provide a platform for the company to perform a premortem that accurately assesses the level of impact and the degree of uncertainty concurrently; if the preferred strategy has the largest degree of uncertainty and the highest impact, perhaps it should not be chosen for implementation. The company can then either choose a different strategy, or, at the very least, prepare for the potential outcomes so they can act swiftly in response.

At my former employer, The Walt Disney Company, I was required to perform a premortem assessment of sorts of a strategy that had been decided by executives that would impact the day-to-day function of my team: migrating ad servers.[iii] In this case, the strategy decision had already been made (contracts had been signed), but there had not been an assessment of the level of uncertainty to account for changes in process, technology, and revenue potential.  In this premortem, I concluded that our team had six potential options for our post-migration strategy, none of which could be tested or implemented until after the migration occurred. Within two days of the launch, we were able to identify the factors that had achieved a high enough level of certainty and choose one of these six strategies I had identified. This premortem assessment of the various uncertainties ultimately allowed us to act quickly and confidently once the level of certainty was within a range that we could act upon.

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[i] Bradley, Chris, Hirt, Martin, and Sven Smit. “Have You Tested Your Strategy Lately?” McKinsey Quarterly, January 2011.

[ii] Lafley, A.G., Martin, Roger L., Rivkin, Jan W., and Nicolaj Siggelkow. “Bringing Science to the Art of Strategy.” Harvard Business Review, September 2012.

[iii] Bruell, Alexandra. “Disney Consolidates Ad-Serving with Google, Ends Relationship with Comcast’s Freewheel.” The Wall Street Journal, November 27, 2018. https://www.wsj.com/articles/disney-consolidates-ad-serving-with-google-1543341631.