Devine Marion - Managing Uncertainty: Strategies for surviving and thriving in turbulent times

MANAGING UNCERTAINTY

Guide to Analysing Companies

Guide to Business Modelling

Guide to Business Planning

Guide to Cash Management

Guide to Economic Indicators

Guide to the European Union

Guide to Decision Making

Guide to Financial Management

Guide to Financial Markets

Guide to Hedge Funds

Guide to Investment Strategy

Guide to Management Ideas and Gurus

Guide to Managing Growth

Guide to Organisation Design

Guide to Project Management

Guide to Supply Chain Management

Numbers Guide

Style Guide

Book of Business Quotations

Book of Isms

Book of Obituaries

Brands and Branding

Business Consulting

Business Strategy

Buying Professional Services

The City

Coaching and Mentoring

Doing Business in China

Economics

Emerging Markets

Marketing

Megachange

Modern Warfare, Intelligence and Deterrence

Organisation Culture

Successful Strategy Execution

The World of Business

Directors: an AZ Guide

Economics: an AZ Guide

Investment: an AZ Guide

Negotiation: an AZ Guide

Pocket World in Figures

The Economist

Strategies for surviving and thriving in turbulent times

Michel Syrett and
Marion Devine

Strategies for surviving and thriving in turbulent times

Michel Syrett and Marion Devine

PublicAffairs

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Copyright The Economist Newspaper Ltd, 2009

First published in 2009 by Profile Books Ltd. in Great Britain.

Published in 2014 in the United States by PublicAffairs, a Member of the Perseus Books Group

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Library of Congress Control Number: 2014932070

ISBN 978-1-61039-513-7 (EB)

First Edition

To our partners Suzy and Stephen

Case examples: Capital One Bank, GlaxoSmithKline, Procter & Gamble, RBS, Singapore government, Tata Group

Case examples: Balfour Beatty, Capital One Bank, Cochrane Collaboration, Ford Motor Company, Honda Europe, HSBC Rail (UK), Marsh, Nokia, Random House, RBS, Simmons & Simmons, States of Jersey, SunGard India, Wipro Infocrossing

Case examples: Balfour Beatty, Cisco Systems, GlaxoSmithKline, Netflix Random House, RBS, Simmons & Simmons

Case examples: Ceridian, Ford Motor Company, GlaxoSmithKline, Honda Europe, Lloyds TSB, Random House, Royal Dutch Shell, Simmons & Simmons, States of Jersey

Case examples: Best Buy, Burberry, Diageo, GlaxoSmithKline, Ford, W.L. Gore, HCL Technologies, Marsh, Random House, Wipro Infocrossing

Case examples: Ceridian, Cisco Systems, Deutsche Bank, IBM, Walmart

IN PRODUCING THIS BOOK, we have been helped by a number of individuals and organisations that require acknowledgement.

First and foremost, we would like to acknowledge PA Consulting Group (PA), which undertook in collaboration with the authors a survey of 205 international businesses in spring 2011. The results of this survey provided us with statistical evidence on which to base our conclusions and contact with the majority of the senior executives whom we interviewed for the book.

In particular, we are grateful for the support and encouragement of Mark Thomas, a business strategy expert at PA, instigator of the survey and a published author in his own right on the topic of strategic determination in an age of uncertainty; Jackie Howell, senior global marketing manager; and Melanie Albury, a PA consultant, who oversaw the survey design and analysis.

We would like to acknowledge the support and encouragement of other thought leaders on this topic, most notably Donald Sull, a professor at London Business School, and Eric Beinhocker, a senior fellow at the McKinsey Global Institute, who contributed their thoughts and insights to this book.

We would also like to thank the many senior executives who allowed us to interview them for the book. Their names appear throughout the text but the organisations they represent span Ashridge, Balfour Beatty, Capital One Bank, Ceridian, Ford, GlaxoSmithKline, Honda Europe, London Business School, IMI, Marsh, McKinsey, Random House, Royal State of Jersey, Simmons & Simmons, SunGard India, Wipro Infoprocessing and the UK governments Foresight project.

On the editorial side, thanks to Stephen Brough and Penny Williams; and thanks to Sally Harper for her private editing support. Lastly, we would like to thank our partners, Suzy and Stephen, for putting up with long weekends of us being chained to the computer and immersed in mutual deliberation.

IN THE AFTERMATH of the global financial crisis, we face a business challenge that is unprecedented in our lifetimes. With the continuing euro-zone crisis, the return of several major economies to recession and the real possibility of a hard landing in China, it is clear that uncertainty remains with us.

When PA Consulting Group launched its managing uncertainty survey, it was with the conviction that the unfamiliar business environment would continue for years to come. Our aim was to analyse executives responses to the crisis to understand what worked and what didnt. The results were striking: we found that the conventional response to a recession, battening-down the hatches as it was often put to us, had actually been the losing strategy. We had expected to see a trade-off between speed and quality of decision- making; what we saw was that those who understood the nature of the crisis responded both faster and better. Most importantly, we found that the winning mindset was neither optimistic (optimists tended to underplay the significance of the crisis) nor pessimistic (pessimists tended to be too defensive in their responses) but one of proactive realism: facing the possibility of drastic change, and seeking the opportunities within the chaos.