The basis of the traditional approach to strategy is the assumption that, by utilizing the proper analytic tools, management can forecast the future accurately enough to design a clear strategy. However, this process usually underestimates the uncertainty involved with predicting future events.
Business owners and managers like to lay out a single, clearly defined strategy (for example, the current year’s plan). In uncertain times, a static plan can be marginally helpful at best, and at worst can dangerously lead to strategies that do not defend a business against outside threats or take advantage of opportunities. I have always recommended management recognize any potential uncertainties in the planning process.
By identifying uncertainties, management can develop early warning systems to identify when the plan needs revising. In some instances, the early warning process should include immediate action items in order to shorten the time between identification and the appropriate reaction.
If you would like to learn more on this topic, please read the attached article from McKinsey Quarterly by Hugh G. Courtney, Jane Kirkland and S. Patrick Viguerie titled “Strategy Under Uncertainty”.