Lecture Two: Reconnaissance into the future (7 February 2006)

Yesterday we learned that all knowledge of the future is provisional. But how can managers proceed forward into the fog? One approach is to conduct reconnaissance into the future. In military terms, reconnaissance (”recon” for short) consists of sending troops ahead of an advancing army to explore the terrain, enemy disposition and overall situation to discover opportunities and threats. Recon consists of five steps: plunge into the action, send out multiple probes, interrogate anomalies, pass surfaces but swarm gaps, and finish strong.

Key take away: Probe the future for opportunities and strike decisively when you locate a gap.

Readings:

Donald N. Sull, 2005, “Strategy as active waiting,” The Harvard Business Review, September. (Order a copy from Harvard Business School Publishing online).

Sarah Kaplan and Eric D. Beinhocker, 2003, “The real value of strategic planning,” 44,2 (Winter): 71-76. (Order a copy from Harvard Business School Publishing online).

Donald N. Sull, 2005, Made in China: What Western managers can learn from Trailblazing Chinese Entrepreneurs, (Boston: Harvard Business School Press), chapter three, “Conduct Reconnaissance into the future.” (Order a copy of this book from amazon.com).

Success against the Odds, chapter six, “Spearfishing.” (Download the book as a PDF file)

Worksheet:

Interrogate anomalies. Anomalies reveal gaps between your mental model and the realities of a situation in flux. Anomalies are sometimes leading indicators of an emerging opportunity. These questions can help you discover and interrogate anomalies more systematically. (Download the worksheet as a JPG file).

Book of the day:

The United States Marine Corps, 1989, Warfighting (order online). Business isn’t war and war isn’t business, but both domains require action in the face of uncertainty. In my opinion, this is one of the best summaries of the principles of strategy in uncertain markets. It draws on and distils much of the best thinking about flexible strategy from earlier thinkers including Clausewitz, Sun Tzu and Liddell-Hart.