Myths of strategy: Challenging assumptions and rethinking business

THIS decade has had a rough start, with many challenges to face. The global pandemic has caused significant disruptions, and conflicts such as the war in Ukraine have added to the crisis. This has led to problems with food, energy, and other issues that continue to affect the world today.

As we approach the final quarter of 2023, we face a mix of new and familiar risks. “Old” risks such as geopolitical tensions, inflation, rising living costs, and social unrest are compounded by new problems like unsustainable debt levels, slow growth, de-globalisation, and the growing impact of climate change. All of these factors make for potentially tumultuous and uncertain times for the rest of the decade.

By this virtue alone, today’s business leaders must equip themselves with the right tools to anticipate and react well to new challenges that may arise. Many popular beliefs that leaders swear by may now only be partially right – or downright wrong in a world that continues to shapeshift.

Livin’ la vida Vuca

We live in a world of volatility, uncertainty, complexity, and ambiguity, commonly referred to as Vuca. The US military originally coined the acronym to describe the unpredictability of the international political environment since the end of the Cold War. It continues to exist in the minds and argot of political and business leaders in typifying the landscape in which they operate. It has also become accepted that business leaders operate in an increasingly Vuca environment. Many leaders believe it is impossible to think strategically in an environment of Vuca, which is a grand misconception.

But, has the business world really become more Vuca over time? While there is academic research on this topic, findings have yet to be conclusive. Some studies have shown that performance persistence has decreased over time, while others have found that it has not changed. A recent study by Victor Bennet in Strategic Management Journal finds that the likelihood that a successful firm will remain at the top of its industry has even increased since the 1970s. In short, there is no evidence that there had been less Vuca previously, but more likely that it has always been Vuca, just in differing aspects.

If the business world has always been Vuca, thinking strategically is just as possible now as ever. Each of the four Vuca components represents a unique challenge requiring a targeted response. Business leaders must also decide whether to respond to each Vuca challenge reactively or proactively.

So if Vuca is more of a constant as opposed to a timed phenomenon as many would perceive, what other misconceptions might business leaders have that could hinder actual growth – irrespective of Vuca.

When perfect vision isn’t, and doesn’t need to be, 20/20

It is well known that a vision gives a firm impetus. It helps spot opportunities that might have gone unnoticed if operations had remained at status quo. This is why companies typically emblazon their vision statements on physical and digital real estate to serve as a clear reminder to employees to consciously and sub-consciously align with.

However, looking beyond these polished amalgamations of snazzy buzzwords and inspirational verbiage, the question begs to be asked: does the quality of the vision matter? Or is it the mere existence of a vision that provides the firm with its strategic impetus?

Managers are surprised when CEOs explain that they are neither visionary nor persistent. Yet in a world where it is increasingly difficult to predict what will “work”, a trial-and-error approach is the best.

Andy Grove, former CEO of Intel, once described his job as follows: “None of us have a real understanding of where we are heading, I don’t… But decisions don’t wait for that picture to be clarified. You have to make them when you have to make them.” He also believes in acting on temporary convictions as if they were firm beliefs, but also being willing to change course very quickly when one realises they are wrong – without getting too depressed.

Similarly, the late founder of Singapore’s Creative Technology, Sim Wong Hoo, said this when asked about his convictions. “People said, how? I said, somehow. They asked me, what was I going to do. I said I didn’t know yet, somehow. Because I had the conviction, I believed in it. So, I call this looking for cracks in the universe. So you are trying to bash through a wall, but you couldn’t bash through because this is a wall. So I looked for cracks. So there was a crack there, I squeezed through the crack and I managed it.” Creative invented the personal music player and famously sued Apple for patent infringements in developing the iPod.

If CEOs of world-renowned companies can admit that they don’t have a real understanding of where the company is heading, it may be safe to assume that many other business leaders around the world are of a similar disposition. Business leaders are expected to project confidence, steadfastness, and trustworthiness. Being unsure of where the company is headed, while incongruent with a leader’s expected traits and behaviours, is sadly a reality they grapple with inherently, and away from the public – or employees’ – eyes.

In closing, there is a solid need to convey a vision that employees can subscribe to and believe in. However, having to be a visionary is a myth. Business leaders can and are entitled to not always be visionary nor persistent. In a Vuca world, a trial-and-error approach may be just as beneficial. In saying so, business leaders should not see Vuca as a new phenomenon. It is an inherent trait of the business landscape that mimics the uncertainty we constantly face in the world. Leaders need to be able to break Vuca down into its individual components and devise strategies towards addressing each unique challenge.

The writer is dean of executive education and professor of strategy and management at ESSEC Business School, Asia-Pacific. His latest book, Myths of strategy (Kogan Page, 2023), debunks the most common strategy myths. This op-ed includes excerpts of the book.