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Prima di iniziare con la rassegna degli esperti» vorrei solo fare una considerazione mia: se è vero che il mondo

appare sempre più


in tempesta e che prevedere cosa accadrà domani è sempre più difficile, che la sfida che le aziende e lepersone sono chiamate a
vincere per poter sopravvivere e prosperare è sempre più difficile visti i cambiamenti veloci e sconvolgenti che vengono sempre
più spesso messi in atto nel mondo…allora la dmanda che mi pongo non è tanto come fare per prendere parte a questa gara e
vincerla, ma piuttosto se vale la pena entrarvi e accettre la sfida!
Il vecchio proverbio marinaro dice che che il bravo mafinaio sa come affrontare la tempesta ma quello davvero bravo si trova in
porto al sicuro e al caldo mentre fuori c’è la tempesta…
Mi chiedo se oggi ha senso prendere parte della «rat race» facendosi carico di tutti i rischi del caso o se invece ha più senso
rimanerne fuori. Perché in fondo, anche se vince la gara dei topi…rimani pur sempre un topo.

Oggi la domanda non dovrebbe essere come fare per vincere questa sfida ma perché la voglio affrontare e se ne vale davvero la
pena!
Things that were self-evident for us (kindergartens, schools, open shops, sufficient, stable income, inviting
the neighbour for a beer and celebrating Easter together with the family) are suddenly no longer there or
possible. This describes very well what we understand by volatility. This extreme dynamic of change is a
catalyst for radical changes in our lives.

How often do I hear in the last days, when can I open my shop again, when are we allowed to move freely
again, when am I allowed to write my high school diploma or from the children: When can we go to the
playground with our friends again? What impact will the country's shutdown have on the economy? Will the
many small craftsmen/grocery stores/farmers still exist? These questions could be continued at will at the
moment and yet they all have one thing in common and that is uncertainty, which is currently reflected by
the second letter "U" in VUCA. Predictability of events are decreasing rapidly, forecasts and experiences
from the past as a basis for shaping the future increasingly lose their validity and relevance. Planning
investments, developments and growth becomes almost impossible.
No one can currently predict with any accuracy whether the restrictions made are the right ones and
sufficient to contain the Covid-19 virus. Different levels of these restrictions are mixed up, which tear apart
known, well-functioning relationships and make them unclear
The decisions that politicians have been making in the last few weeks have to be made on the basis of
the most complex interrelationships (spread of the virus vs. restriction of freedom vs. economic
consequences vs. social problems vs. political consequences) and it is hardly possible to make a clear
statement whether we are on the right track. The gross domestic product for this year will collapse
extremely, the unemployment figures will rise rapidly, the tourist regions around the Mediterranean will
have no holidaymakers and perhaps we too will increasingly walk through the city centres wearing face
masks in the future. Here we are at the 3rd letter "C", for Complexity.

The last letter, the "A" in VUCA, stands for ambiguity and is intended to express on the one hand
that in the rapidly changing world it is no longer possible to describe reality unambiguously, but on
the other hand that it is also impossible to find the right answer.
How do we want to deal with this?
1.we have to drive in this unknown, fast and unpredictably changing terrain exclusively on sight We
have to change our approach/plan as fast as we have new knowledge and cannot rely on long-term
plans.
2.we must not try to apply known solutions to completely unknown problems.
3.we must stop nonsensical activities and strengthen the skills we need right now and improve our
ability to learn and adapt.
VUCA - a term of the American military
In the mid-1990s, after the collapse of the socialist system, there was suddenly no longer the ONE enemy. In
American military jargon, VUCA describes the conditions of modern warfare - keywords: asymmetric
warfare, suicide bombers, jungle or street fighting. The conditions can no longer be compared with the clear
front lines of past battles in which two great armies met.

Volatility describes the intensity of fluctuation over time. It is easy to understand using the example of share
prices: share prices that fluctuate strongly within a short period of time show up as "sharp jaggies" in the
progress chart. The higher the volatility, the stronger and more "jagged" the swings.
In this model, uncertainty describes the unpredictability of events. The more "surprises" the context provides,
the more uncertain it is.
Complexity is influenced by the number of influencing factors and their interdependence or interaction. The
more interdependencies a system contains, the more complex it is. The term "complex" must be distinguished
from the term "complicated" - even if both are often used incorrectly and equivalently. A complicated system
can be simplified without destroying the internal structure of the system. Example: an unclear mathematical
break is simplified by shortening. A complex system, on the other hand, is destroyed if you try to simplify it -
e.g. by disassembling it.
Ambiguity describes the ambiguity of a situation or information. Even if a lot of information is available (in the
sense of being secure and predictable), the evaluation of the same can still be ambiguous. "And what does it
mean now?" is a typical question in such situations, even when actually "all facts are on the table".
Communication situations often contain a high degree of ambiguity. To make matters worse, the people
involved are often not even aware of it.
It depends on your own values!
That still leaves the ambivalence decision. Simple trial and error, for example, helps here. The yardstick
between waiting and acting is central. If everything is already constantly changing ("panta rhei"), when do I
set off? Experience shows that there is no absolutely right time here. Rather, it is helpful to be very
conscious of the tension between change on the one hand and identity on the other. Personal values
provide the orientation. They are the compass in times of search, confusion, striving for a decision, longing
for an authentic solution. Therefore, one's own values are also the pilots in the turbulent digital VUCA
times. Today, more than ever, this is something we should be concerned with.

What to do when everything becomes completely "VUCA"?


The military is taking the path of technology - and thus relying on the strategies of the old days. More
reconnaissance, more surveillance, more drones, more robots, more ... The problem is that this is only
available at a high (not only) financial price. In some cases, companies can try to explore large databases
using big data / data mining approaches. However: the data sets often only concern the customer side (not
the competitors, employees, suppliers or other stakeholders); not all customers come in "thousands"
(which are needed for data mining); not every company has the financial resources to dig this kind of
digging in the data pile. So - what to do?
Management 4.0 and sensible navigation in VUCA times
Charles Handy, the acknowledged social philosopher and management thinker, put it even more clearly in
his keynote speech when he spoke of the rethinkable sequence of key factors for the success of a company:
People, profit and passion. They're all important but so too is the order. So it can be concluded that
traditional management has been reaching its limits for some years now. Yet even today, many managers
still follow the beliefs that have been helpful for decades. The dominant factor is still the sometimes
insufficiently reflected self-image of knowing what to do. And this is based on old experiences and "best
practice" from the times of Industry 3.0, often without having a better understanding of what is really going
on in the company - and, looking beyond the horizon - in the respective environment and the business
world. At this point, I always like to quote Klaus Doppler, who beautifully illustrated in my OE training, "that
there are managers who still fetch cows from the ice even when there are no more cows or ice".
In summary, detailed and relevant knowledge about the state of one's own organisation is often missing.
There is a lack of information about where a successful intervention can start. Bad experiences with
ineffective changes usually dominate, leadership achieves the unneeded effect and is often a signal of
missed implementation.
The "why?" and the "how?" outrank the "what?"!
This is where "old teaching" meets the new approaches. Factors that are in turn maximally touched upon
or rudimentarily considered in current management practices. What can this teach us? If you look on
Wikipedia for "The Titanic", you will read: "Its name stands for serious accidents and the uncontrollability
of nature through technical achievements." So what could be more obvious than to focus your attention
on what you have influence on? And this still includes the dialogue from person to person and the
interest in others!
VOLATILITY
We live in a world that’s constantly changing, becoming more unstable each day, where changes big and
small are becoming more unpredictable – and they’re getting more and more dramatic and happening
faster and faster. As events unfold in completely unexpected ways, it’s becoming impossible to determine
cause and effect.

UNCERTAINTY
It’s becoming more difficult to anticipate events or predict how they’ll unfold; historical forecasts and past
experiences are losing their relevance and are rarely applicable as a basis for predicting the shape of
things to come. It’s becoming nearly impossible to plan for investment, development, and growth as it
becomes increasingly uncertain where the route is heading.

COMPLEXITY
Our modern world is more complex than ever. What are the reasons? What are the effects? – Problems
and their repercussions are more multi-layered, harder to understand. The different layers intermingle,
making it impossible to get an overview of how things are related. Decisions are reduced to a tangled
mesh of reaction and counter-reaction – and choosing the single correct path is almost impossible.
AMBIGUITY
“One size fits all” and “best practice” have been relegated to yesterday – in today’s world it’s rare for
things to be completely clear or precisely determinable. Not everything is black and white – grey is also
an option. The demands on modern organisations and management are more contradictory and
paradoxical than ever, challenging our personal value systems to the core. In a world where the “what”
takes a back seat to the “why?” and the “how?”, making decisions requires courage, awareness, and a
Tipiche risposte VUCA:
V = oggi sì è così
U = non lo so/ non ne sono sicuro
C = dal punto di vista di…/ Se consideri…
A = «Dipende/ Forse»

Where does the term VUCA come from?


VUCA is an acronym (artificial word), first used in 1987 and based on the leadership theories of Warren
Bennis and Burt Nanus, and stands for Volatility, Uncertainty, Complexity and Ambiguity. It was the
response of the US Army War College to the collapse of the USSR in the early 1990s. Suddenly, there was
no longer the only enemy, resulting in new ways of seeing and reacting.
VISION
Paint a picture of the future you want. Together; as a compass and for orientation; in order to confer
meaning and spark motivation – and to forge internal and external identity and effectiveness.

UNDERSTANDING
Understand interconnections; make them transparent. Reflect on the context. Think and plan meta-
strategically. Start from the result and work backwards. Harmonise skills. Embrace and exploit behaviours
and reactions. Convert anxiety and resistance into productive energy.

CLARITY
Simplicity. Focus on what counts and what it's really about. Trust, transparent connections and processes.
Apply energy and force exactly where they will be most effective.

ADAPTABILITY / AGILITY
Flexibility. Agility. Scrutinise hierarchical management techniques. Promote a consistent culture for making
decisions and accounting for mistakes. Interact transparently with objections. Facilitate innovation and build
up resilience.
Content
With the help of a structured moderation the participants deal with the leading question “Where are we
strong?” and formulate concrete answers to differentiating questions:
What does our organisation stand for?
Leadership: What are our values? What do we take responsibility for?
Vision/Strategy/Aims: What is our vision of the future for the organization? Which way leads us there? What
are our short-, medium- and long-term goals?
Community: Which groups of people support us in fulfilling our tasks?
Management: Which structures and processes help us to fulfil our task? What resources do we need?
Relationships: How do we maintain relationships with the groups of people that are important for our task?
The participants then use the compass to examine the strengths of the organisation, evaluate the results,
define the need for action and make initial suggestions for options for action.
The ideas that have historically guided us — hierarchical structures of society and organizations,
top-down governance, segmented industries, intellectual property, personal ownership — are
becoming increasingly irrelevant. We have never seen the volatility, uncertainty, complexity and
ambiguity (VUCA) that we are seeing today. As innovation pioneer Peter Diamandis has noted, “The
first technological steps — sharp edges, fire, the wheel — took tens of thousands of years. Now,
paradigm shifts occur in only a few years’ time.”1  And, technology isn’t the only arena experiencing
rapid change: the unprecedented shifts seen in experiential consumption, the generational
workforce, globalization and many other areas are transforming the way organizations operate and
evolve.
The acronym VUCA was coined by the US military to describe the state of the world after the Cold
War. Even though the term has been used to describe our present-day business environment, we
have been very slow to respond to change. Our practices are outdated and antiquated, and no
longer suffice in the face of a VUCA world.
L’idea che bisogna avere obiettivi chiari di lungo periodo ma massima adattabilità nel corto e medio periodo….come una
barca a vela che si muove di bolina per arrivare a destinazione. Sapere dove vuoi arrivare è paradossalmente ancora più
essenziale nel momento in cui devi aportare costantemente olteplici aggiustamenti di rotta!
If Strategic Planning is the “what” of an organization’s strategy process, and Strategic
Thinking is the “how,” then Strategic Foresight is the “why” that is so critical to success in a
VUCA world.
Strategic Foresight can be defined as the practice of exploring multiple alternative futures that
cover a range of probable, possible, provocative and preferred outcomes.
La lezione di Max Visaggio:
Come Max mi ha ricordato apparendomi in sogno, sorridendo come faceva sempre, lui che di VUCA e di incertezza e di
cambiamenti ne ha visto più di tutti…mi ha detto che ci sono 4 variabili da tenete in conto:

1) Obiettivo chiaro
2) Contesto in che contesto ci muoviamo rispetto all’obiettivo che ci siamo dati
3) Limitazioni proprie di questo contesto
4) Possibili soluzioni: giocare a prevedere più scenari possibili in modo da capire quale soluzione è la più appropriata
da mettere in campo di volta in volta.

Questo schema tiene quind conto che gli obiettivo non possono piu essere perseguiti indipendentemente dal contesto
in cui ci muoviamo, ma ne risultano assolutamente influenzati…credo che detto così il contesto assume in contorni di
quello che nel modello Grow chiamiamo R, reality…
Thomas Friedman, in his recent book, “Thank You for Being Late,” argues that most organizations
face significant environmental complexity in “the age of accelerations” and identifies three main
drivers of our contemporary VUCA environment: the exponential growth of technology,
globalization and the environment (climate change, population growth and migration), which all
are accelerating simultaneously. This “Supernova”—as Friedman calls the convergence of these
drivers—has created a VUCA environment for nearly every business and every industry.

How did the Army transform? According to Reimer, the answer is by using 5 key strategies to
position the Army for future success. These strategies have much in common with what business
leaders are doing to make their organizations more adaptive. General (retired) Dennis Reimer, a former
Chief of Staff of the U.S. Army.
2. Leveraging Technology

3. Aligning Organizational Structures. The need for flexibility and rapid response led to an
examination of how the Army was structured to be able to respond to a wide range of possible
threats. The Army has six major levels of command from largest to smallest:
Army > Corps > Division > Brigade > Battalion > Company
The Army division (10,000-18,000 soldiers) had been the force that was deployed to face known
Soviet threats, but after the Cold War ended, smaller brigade-sized forces (3,000-5,000 soldiers)
afforded greater flexibility, and they could be mixed and matched to meet specific threats. This
was no small change.
4. Establishing a Learning Organization.
As General Reimer said, “we just made the decision that we’re close enough. We’re at the 90%
solution. Let’s just take it forward. And I’m glad we did.”
Next, the Army ran a series of war game simulations to test the concepts against a variety of current and future threat
scenarios. After every exercise, large or small, all leaders used after-action reviews to learn and implement lessons learned in
future operations. The objective was to learn how the new ideas stacked up against alternative threats, to ensure the
transformed Army would embody the characteristics that would meet the challenges of this VUCA world. Additionally, Army
units incorporated the new concepts into tactical training in force-on-force simulated combat at the combat maneuver
training centers to prepare leaders and units for the new operational environment. Throughout the transformation process,
General Reimer clearly communicated the need for change and encouraged experimentation and information sharing within
the Army.

5. Leader Development. General Reimer reflected on the importance of leader development


within the Army, emphasizing the necessity for a continuous and progressive system of professional
education, training and job experiences to prepare leaders throughout the chain of command for the
management of change.
We see similarity with the Army’s concept of the commander’s intent, which flows from the leader’s analysis of the
mission and communicates to all members of the organization the what (vision) and why (purpose) of the mission. The
how is left to subordinate leaders and staff members who are closer to the action and can adjust specific actions as the
situation unfolds. Organizational learning, then, is grounded in the mission.
Two strategies for organizational learning emerged from our interviews: experimentation and learning from experience.
Woven throughout these strategies is the importance of communicating lessons learned across the organization, a
challenge that exists in most organizations but is acute for large global companies.

The after-action review is a technique developed by the Army as a tool for organizational and individual learning
from experience. Across the Army—from platoons to senior staffs—work groups and teams meet after operational
actions and training events to review what worked, what didn’t work, what they learned and how they can perform
more effectively and efficiently next time. Individual and collective reflection is based on the mission and leader’s
intent, with the focus on enhancing organizational performance on subsequent events. All team members
participate, and leaders often start the discussion with a self-critique to model openness to learning. Honesty and
trust are the bedrocks of the review and hallmarks of a learning organization.

Bob Weidner, CEO of MSCI, the industrial metals trade organization, indicated—“thoughtful
companies view their people as assets in which you must invest.”
Across a wide range of business sectors—manufacturing, engineering, aerospace, financial
services, convenience stores and professional services—VUCA (volatility, uncertainty, complexity
and ambiguity) is real. Technology advancements, competition, regulations and globalization are
accelerating the rate of change and placing enormous demands on their business to be more agile
and responsive to new market forces. What are they doing to adapt?
First, they are creating, shaping and transforming their organizations’ cultures to be more
responsive to their environments. They influence their organization’s culture by articulating and
reinforcing corporate values. The executives spoke about the values of integrity, trust,
empowerment, employee and leader development, and learning as being essential in the new
normal of VUCA. Once the corporate values are articulated and shared, they reinforce them by
personal example and presence and ensure they are cascaded throughout the organization. They
also understand they need others to shape and reinforce the corporate culture; they use the values
to guide hiring decisions and personnel development processes, and they ensure that all the
The executives
organizational stressed
systems arethe necessity
aligned for having a clear
and synchronized sense of
to embody theshared purpose, an unwavering
culture.
commitment to change and a willingness to listen to all stakeholders. Celebrating small early
successes is important to build confidence in the change process and trust in the corporate
leadership.
A strategy is one of a company’s most important assets, as it lays down the long term ambitions of
the company, how competitive advantage is gained, and what needs to be done to achieve this.
With a solid strategy in place, companies can capitalise on a blueprint for a successful future, with
research by McKinsey & Company over a fifteen year period showing that organsiations with a
long-term strategy manage to outperform their peers on a range of key fundamentals: generating
47% higher total revenues and 81% higher average company economic profit.
The question is: how long-term should a strategy be? In a world characterised by volatility,
uncertainty, complexity and ambiguity (abbreviated as VUCA), a long term strategy is risky as
companies can be disrupted out of their industry in the space of a few years. 
As a result, experts are highlighting that the nature of strategic development and execution is
changing. Out goes the sloth-like long-term and fixed approaches, in comes a more scenario-
driven, modular approach, which building on agile techniques can be rapidly changed and/or
deployed. According to Marc Baaij and Patrick Reinmoeller however, “VUCA makes strategy
development and execution hard but it does not reduce the relevance of strategy.”
At the heart of the approach stand four intertwined processes:
•Exploring strategic issues. Before leaders can develop a new strategy, they need to thoroughly
understand the big issues that substantially and structurally affect their firm’s overarching
performance. This process allows them to develop with their stakeholders superior insights into the
real strategic issues, while avoiding ‘boiling the ocean’ with exhaustive and irrelevant analyses.
•Engaging employees and other stakeholders within and outside the firm in the processes of
strategy development and execution. The purpose is to mobilise these stakeholders in order to get
their commitment and support, and to avoid the weaknesses of a top-down approach and the
problems of stakeholder politics.
•Developing strategic options and choosing a strategy. The purpose here is to create winning
strategies and avoid the black box of strategy development by outlining clear routes to strategic
options. Again, business leaders will need to engage stakeholders, including the most critical ones.
•Executing the chosen strategy. With this process, leaders want to anticipate and prevent the
(typical) roadblocks to strategy execution. The authors outline how to deconstruct strategic choices
in a set of concrete actions to successfully execute a new strategy, and also how to learn from
execution to improve the strategy when needed.
The authors further contend that another advantage of the Mapping Method is the focus on the real
strategic issues. Such focus avoids ‘boiling the ocean’ and enhances the odds of generating
valuable and exclusive insights as a sound basis for strategy development. A third advantage of the
method is the clarification of three alternative routes for developing strategic options: creative
thinking as well as inductive and deductive reasoning. Further, in this method, attention to
execution does not start after strategy development but already begins with issue exploration.
Designed as a rigorous approach, the Mapping Method, they say, is not a linear method but
incorporates important feedback loops at two levels. The first level is feedback from issues, strategy
hypothesis development, and testing. The second level is feedback loops from strategy execution
back to strategy development and issue exploration. In terms of being agile, the authors also
highlight its importance.
“We acknowledge the value of agility, simple rules and learning through probing and experimenting
under high levels of VUCA,” the duo states. “The Mapping Method offers a smart way to experiment
and learn through the use of issue hypotheses and strategy hypotheses. The method treats
strategies as hypotheses and tests them before execution, thereby reducing the odds of errors and
costly failure. We acknowledge that strategy execution is the real test of a strategy hypothesis, and
we acknowledge that strategies may not survive the confrontation with a VUCA reality.”
What does VUCA mean?
To understand what VUCA really means, it is important to take one step back and understand why the
term has become so current in the last few years. George Forsythe, Karen Kuhla and Daniel Rice
describe three effect factors of a VUCA environment in their article Can You Do VUCA?:
1.Technology (the exponential growth of all the temptations and threats related to digitalization, the
internet of things, artificial intelligence, big data, robotic etc.)
2.Globalization
3.Environment (climate change, population growth, migration, etc.)
All these drivers are accelerating simultaneously and create an environment that is perceived as
uncontrollable.
Further, in order to fully understand the concept of VUCA, it is also important to know what each single
dimension of the model means. One of the best descriptions of the four dimensions of VUCA can be
found in Jeroen Kraaijenbrink’s article What Does VUCA Really Mean?. Here’s a short summary:
Volatility is connected with speed and change that is frequent and, many times, unpredictable. The
more volatile the world is, the more and faster things change.
•Uncertainty refers to a lack of knowledge, for example, not knowing if and what events will take place
or what the consequences of them might be. The more uncertain the world is, the harder it is to make
predictions.
•Complexity means that a system has many components that can interact with each other in different
ways. The more complex an environment is, the harder it is to understand and draw the right
conclusions.
•Ambiguity means that a situation is not explicitly defined, making several interpretations plausible. The
more ambiguous the environment is, the harder it is to interpret.
 Bill George, a senior fellow at Harvard Business School, created the acronym called VUCA 2.0. In this
model, VUCA stands for Vision, Understanding, Courage, and Adaptability. As beautiful as this
acronym sounds, in our opinion the solution strategies should be modified to be really useful for
innovators:
•Volatility calls for Vision: In a volatile environment, companies should build on a long-term vision
that stands above all fluctuations. A vison for product development is the customer’s Job-to-be-Done
. While product lifecycles become shorter and shorter, the customer’s Job-to-be-Done stays constant.
It has always been true that people want their homes to be secure, however, while the generic
process steps around this Job-to-be-Done have stayed the same, the solutions have evolved from
manual door locks to digital security systems. Similarly, people always want to listen to music while
solutions evolved from the gramophone and CD players to online streaming services. Processes and
products change, needs stay the same.

Uncertainty calls for Knowledge: When innovating your product pipeline or growing into new
markets, technology is rarely the biggest uncertainty factor – most of the time the real blind spot is
how customers perceive and measure value. If a company knew all the needs of its customers, it
could create the perfect solution to delight them.Outcome-Driven Innovation® does not uncover all
customer needs in a market, but of all known methodologies, it is the one that comes closest to that.
In a very systematic approach, it identifies up to 150 customer needs in most markets – this
knowledge is the basis on which to build a data model that steers decisions for years to come. 
Complexity calls for Focus: Complexity can be reduced by focusing on the few things that have
the biggest impact. Of course, this sounds easier than it is. To identify the things that really matter,
you have to carry out a comprehensive analysis first – in Albert Einstein’s words: “If I had an hour to
solve a problem, I’d spend 55 minutes thinking about the problem and 5 minutes thinking about
solutions.”This is what makes Outcome-Driven Innovation® so special: the comprehensive analysis
phase sets the baseline for all the decisions that follow, such as strategic decisions about products,
markets and innovation programs, definitions of product and service concepts, and marketing and
sales programs. All these decisions are focused on the one thing that really matters: creating value
for customers.
Ambiguity calls for Vision, Knowledge, Focus and Speed: Ambiguity is probably the trickiest
VUCA dimension. HBR article What VUCA Really Means for You describes ambiguity as “facing
unknown unknowns” and recommends experimentation as a solution strategy. We do not think that
experimentation should be part of any strategy. To get a highly ambiguous situation under control,
you have to build your growth ambitions on a strong vision, acquire all available knowledge and
focus on the most effective factors – but you also have to be able to act quickly and adapt your
decisions within the defined frame, if necessary.Again, Outcome-Driven Innovation® (ODI) is the
perfect tool to reach that. Since strategic decisions made with ODI are valid in the long term, they
allow concerted actions, from short term marketing messages and sales arguments over product
modifications to long-term R&D programs. Variations and adaptions should be made whenever
necessary – but within defined boundaries, such as identified target segments or topics that
generate the most value to these segments.
The Four Dimensions of VUCA COPYRIGHT JEROEN
KRAAIJENBRINK; Source ‘What Does VUCA Really
Mean?

As illustrated in the picture above, in a purely volatile (but not


uncertain, complex and ambiguous) world, there is a lot of fast,
but predictable change. On the other hand, in a purely
uncertain (but not volatile, complex and ambiguous) world, it is
just hard to tell how things develop. And in a purely complex
(but not volatile, uncertain and ambiguous) world, things are
hard to untangle and understand. Finally, in a purely ambiguous
(but not volatile, uncertain and complex) world, things are just
hard to discern.’
Volatility - Volatility refers to the speed of change in an industry, market or the world in general. It is
associated with fluctuations in demand, turbulence and short time to markets and it is well-documented in the
literature on industry dynamism. The more volatile the world is, the more and faster things change.

Uncertainty - Uncertainty refers to the extent to which we can confidently predict the future. Part of uncertainty
is perceived and associated with people’s inability to understand what is going on. Uncertainty, though, is also a
more objective characteristic of an environment. Truly uncertain environments are those that don’t allow any
prediction, also not on a statistical basis. The more uncertain the world is, the harder it is to predict.

Complexity - Complexity refers to the number of factors that we need to take into account, their variety and
the relationships between them. The more factors, the greater their variety and the more they are
interconnected, the more complex an environment is. Under high complexity, it is impossible to fully analyze
the environment and come to rational conclusions. The more complex the world is, the harder it is to analyze.

Ambiguity - Ambiguity refers to a lack of clarity about how to interpret something. A situation is ambiguous,
for example, when information is incomplete, contradicting or too inaccurate to draw clear conclusions. More
generally it refers to fuzziness and vagueness in ideas and terminology. The more ambiguous the world is, the
harder it is to interpret.
we are going, but one we are creating. The paths are not to be found, but made. And the activity of making them changes both t
It is logical to assume—and the research confirms it—that in general terms, all survival techniques
in the VUCA world are connected with the principle of 
continuous adaptation and permanent learning of organizations.
Henry Mintzberg in his book Strategy Safari: A Guided Tour Through The Wilds of Strategic
Management divided strategy into two groups. The first one is prescriptive and the other group is
descriptive schools

Prescriptive schools of the strategy have been dominating the business community since the 50s. It
is a program where the stages of planning and execution were two different tasks separated in
time. Such a strategy could become outdated even before its very implementation. This approach
could be effective in a stable environment, but it is absolutely inconsistent with the demands of the
VUCA world.
Among the descriptive schools of strategic management, there was at least one based on the
principles of continuous adaptation and permanent learning – the Learning School. The ‘father’ of
this school, Charles E. Lindblom, introduced to the world the method of successive comparisons
operating with a limited number of alternatives, on the basis of which an effective temporary
solution can be made.
This flexible method became known as incrementalism.
Incrementalism
Incrementalism is a management approach consisting of regular small steps and decisions. This is
a pragmatic way of interacting with reality and balancing opportunities and risks. The logic of
incrementalism was at the heart of some descriptive schools of a strategy and also was close to
the principles of Japanese Kaizen system of continuous incremental improvement, pioneered by
Toyota in the 1970s.
Incrementalism implies that the leader forms the way in general terms. They should clearly
develop the final goal and intermediate results – the stages of goal achievement. Assuming that
several goals can lead to one goal, and that selection efficiency is a derivative of specific external
circumstances, the incrementalism approach leaves room for maneuvers and a wide choice of
methods for the goal realization.
Incrementalism is highly effective in the conditions of the VUCA world due to the following
reasons:
•it uses chains of small changes
•small steps are clearer for the task performers and do not cause their resistance
•small changes can lead to the goal faster than large ones
•it eliminates big risks
•it provides organizations with the higher level of flexibility and adaptability
The weak points of incrementalism are fragmentation and the lack of precise rules of its
application:
•the solutions are used to solve problems, not to use opportunities
•the solutions are local, often unrelated, and may even contradict each other
•Incrementalism is characterized by ‘Strategic drift’: gradually, without even noticing it, an
organization may deviate from the adopted strategy.
Essentially, incrementalism has one major drawback – instead of developing resources and
preparing for market breakthroughs, the company is tempted to take small steps. Let’s call this
avoidance of big bets. Without the ability to make big bets, the competition will constantly eat up
the company’s profits right up to its bankruptcy. Incrementalism becomes dangerous for a
company when risk avoidance becomes its norm.
The weaknesses of incrementalism were eliminated by the similar concept “logical incrementalism”,
proposed by James B. Quinn, in particular, due to its constant focus on strategic goals,
organization milestones and the integration of the proposed changes.
In one of his interviews, Nassim Taleb called the loss of contact with reality as one of the key
problems of our time. 

The VUCA world requires a revision of how businesses collect and analyze information, make strategic
decisions, develop plans and implement them.
1- Speaking of the first stage – data collection and analytics: VUCA world requires consideration of
greater amount of factors and expansion of the planning horizon. As a result, there’s a growing
popularity of forecasting methods, which can be united under the concept of foresight.
Foresight is different from the traditional predictive models called forecasting. While forecasting is
based on the forward projection of past experiences. Foresight includes more advanced methods of
anticipation logic which allow making possible scenarios based on weak signals, emerging trends,
coexisting presents and potential paths of evolution. Strategic foresight is especially useful in
situations that are characterized as a VUCA context.
The foresight process is closely related to another important tool in the VUCA world – scenario
planning. As it was already mentioned, one goal can be achieved in different ways. When developing
a strategy, management team chooses the most likely turn of events based on the available
information, resources, skills, etc. At the same time, any strategy bears the imprint of information
incompleteness and subjectivity, such as cognitive predispositions of decision makers. However, what
if things don’t go as planned?
The scenario is a holistic plan, a set of assumptions that describes an alternative view of the future,
which is then used to develop or to test a strategy. Scenario planning is mainly focused on answering
two questions: ‘What can happen?’ and ‘What impact will it have?’ The company’s readiness for
several future development options will allow it to be less fragile.
The second stage, crafting a strategy, is the most subjective one and in many schemes is depicted
simply as a black box. This is a stage when the strategy itself is created. In most cases, it is a plan
of initiatives based on a chain of goals – a scorecard implemented in Balanced Scorecard
(BSC) approach, introduced by Robert S. Kaplan and David P. Norton.
At this stage, strategists may face many challenges: treating the symptom vs. sorting around,
making false assumptions, making a false shot a short frame, lacking buy-In… There are even
more problems in the conditions of the VUCA World.

3- The critical factor for both the crafting strategy stage and the next stage of strategy
implementation is the gap between strategy and execution when “the plan remains the plan”.
One of the modern methods of solving above-mentioned problems is a dynamic strategic
plan which should be continually refined and improved.
The most complete application of dynamic planning principles can be achieved with the help of such strategic management
tool as roadmapping.
Roadmapping
Among all of the VUCA tools, roadmapping most fully implements the ideas of dynamic planning,
continuous adaptation and learning.
The main feature of roadmapping is that it fully implements the principles of logical
incrementalism and dynamic planning. Roadmap is a dynamic strategic map that answers three
questions:
•where do we go? (specifying the quantitative and qualitative measurement of goals)
•where are we now? (basing on the assessment of key performance indicators of the company)
•action-plan itself
Roadmapping allows companies to remain flexible in their choice of tools and methods for the
goal achievement, maintaining their focus on strategic goals mostly through the use of
milestones.
Another vital feature of roadmapping is that it is both a strategy and a mean of communication.
Being a flexible tool that simplifies the integration of initiatives, roadmapping supports strategic
dialogue and provides a better understanding of strategic goals and ways to achieve them. At the
same time, it remains one of the best ways to communicate ideas.
Roadmapping is about the collective clarification and understanding of goals and strategies of
product development. As a result, the company gets a transparency of the long-term vision, on
which then, day after day, your managers and your team will string effective solutions and
initiatives. The future will definitely differ from the way we imagine it, that’s why we should paint
with the large strokes.

Effective behavior in the VUCA world relies on predicting the trends of all key factors that affect
business (foresight) as well as on rational, controlled processes of continuous learning and
adaptation. At the same time, the management team should always keep in focus the company’s
strategic goals and milestones.
Responses to the VUCA events are hidden at the junction of organization and reality. The very
strength of any strategy is not its strictness and consistency, but its ability to effectively use
opportunities and to act accurately in the face of uncertainty.
Volatility: Dynamic, quick and intense changes in the environment where the challenge is unexpected or unstable and maybe
of unknown duration. (ii) Uncertainty: A lack of predictability around issues and events where the nature of the event may be
known, but it is impossible to predict its presence or outcomes in advance. (iii) Complexity: The combination of issues and the
chaos that surrounds any organization, in which the situation has many interconnected parts and variables where some of the
information may be available or could be predicted, but the volume or nature of it can be too overwhelming to process. (iv)
Ambiguity: The haziness of reality and the mixed meanings of conditions in which casual relationships are completely unclear
where no precedents exist, and have to face ―unknown unknowns‖.
Volatility refers to the speed of change in your industry, market or the world in general. It is associated with
fluctuations in demand, turbulence and short time to markets and it is well-documented in the literature on
industry dynamism. The more volatile the world is, the more and faster things change. This can be summarized
with the following picture:

A highly volatile environment asks for a strategy approach that allows you to quickly going through the
strategy process in short cycles and that produces quick results. This means that ideas are quickly tested and
that there is a short implementation and feedback loop so that plans are adjusted as soon as needed. Only in
that case, a strategy approach is able to match the pace of an industry. It is this characteristic of the strategy
process that is emphasized in approaches focusing on learning, agility, trial and error, experimentation,
temporary advantages and adaptability.
At the same time though, strategy must also provide your organization with stability. One of the core 
functions of strategy is that it gives your organization a stable frame of reference that can be referred to and that
guides action. An organization in constant flux or constant reorientation will drift, hardly get anything done and
certainly not realize its full potential. Strategy is not meant as a rigid straightjacket. However, your organization
needs some stable guidance – especially in turbulent times.
The metaphor of a tree is useful to capture this paradoxical demand. To weather a storm, a tree needs to be
flexible and bend with the wind. However, it also needs firm roots that nourish it and that make sure that the tree
does not get blown down.

The same applies to strategy. It needs to be flexible so that it can respond to the ever-changing VUCA circumstances.
However, like a tree, strategy also needs to be firmly grounded so that it serves as a reliable foundation for building
and growing the organization and for keeping the organization standing in the challenging circumstances of a VUCA
world. Therefore, a first paradoxical demand for a strategy approach in a VUCA world is that it effectively combines
stability with agility
Uncertainty refers to the extent to which we can confidently predict the future. Part of uncertainty is perceived
and associated with our inability to understand what is going on. We often feel uncertain when things are out
of our control or too hard to grasp. This is the subjective part of uncertainty. 

Uncertainty, though, is also a more objective characteristic of an environment. Truly uncertain environments


are those that don’t allow any prediction, also not on a statistical basis. Such uncertainty is the result of
unexpected events, unpredictable human reactions and the vast complexity of our world that makes it
impossible to reliably predict the effects of something happening. In short, the more uncertain the world is, the
harder it is to predict. This can be summarized with the following picture:
For your strategy approach to be effective in an uncertain environment, this means that you have to rely on
other mechanisms than only prediction. ‘Control’ or ‘shaping’ is such mechanism. It refers to focusing on
what you can control, shape, or get done within your own sphere of influence. An organization, for example, can
take certain actions, deploy its resources, or establish partnerships without having to make strong predictions
about them. By relying on those factors within your control, you reduce the need to predict, and thereby your
dependency on prediction. This is the essence of what is sometimes called an 'effectuation' approach to strategy,
entrepreneurship and business in general.

On the other hand, prediction always remains an important basis of strategy, even in uncertain environments.
Especially when you need to make large investments or radical changes to your organization, you want a
reasonable degree of confidence before you take action. To some extent, confidence can be achieved by gathering
detailed and relevant data. This has been the foundation of traditional strategy approaches and is reviving now
with big data analytics, artificial intelligence and algorithmic approaches to strategy, focusing on the processing
of detailed behavioral data as basis for making predictions.
Reliable data will often be lacking, though, especially if your organization is venturing in the unknown: into a
new industry with a new product or a new business model. Data are by definition based on something existing in
the past and therefore not always a reliable basis for making predictions for something new in the future.
Furthermore, the fact that much of your organization's success relies on the preferences and decisions of key
people – particular customers, leaders, or other stakeholders – that often don’t behave rationally or as expected,
makes the outcomes of a strategy hard to predict.
Strategy as we know it, is all about simplicity. Organizations are supposed to choose from three or four generic
strategies, come up with simple, preferably one-phrase mission and vision statements and ideally have one key
objective to which everything else contributes. Furthermore, the strategy toolbox is full of simple models and two-by-
two matrices  - SWOT, BCG matrix, growth matrix, and so on - dividing the world in four parts to pay attention to.
The question is whether such approach is still valid in today's world, which is characterized by volatility, uncertainty,
complexity and ambiguity (VUCA). In two earlier articles I briefly outlined the demands put on strategy by a world
that is volatile and uncertain. In this article I continue the discussion with the next element of VUCA, complexity, and
ask: What should strategy look like in a world that is complex?
Complexity refers to the number of factors that we need to take into account, their variety and the relationships
between them. The more factors, the greater their variety and the more they are interconnected, the more complex
an environment is. Under high complexity, it is impossible to fully analyze the environment and come to rational
conclusions. Thus, the more complex the world is, the harder it is to analyze. This can be illustrated with the
following picture:
It is popular to argue that the increased complexity we are facing, should lead to even simpler strategies than in
the past. Along those lines, Eisenhardt and Sull, in their 2001 Harvard Business Review article "Strategy As
Simple Rules", argue "When the business landscape was simple, companies could afford to have complex
strategies. But now that business is so complex, they need to simplify." 

Using simple rules rather than an overall complex master plan to guide strategy is not a bad idea. But it
doesn't imply that simplicity is the only or even the best answer. Yes, things should always be as simple as they
can. But not simpler than that . And how simple can your strategy be in a a world that is increasingly complex?
Like in many other areas of life, also in strategy the devil is in the details. Yes, you could adopt a "customer
intimacy", "operational excellence" or "product leadership" strategy. But the real work only starts when you start
thinking about how to realize such strategy in a way that matters to your customers and that is different from
your competitors. So, your real strategy is in the nitty-gritty details
For a strategy approach this means that it needs to be able to connect the small pieces and details to an
overall picture. You need both detailed insights and integrative oversight. Or in other words, an effective strategy
approach pays attention to both the forest and the trees. Given the aforementioned current focus on simplicity,
this implies a greater attention to detail and embracing more complexity in strategy than we are used to.
This is an important shift in perspective. And probably one we prefer not to hear. Making strategy more
complex? Focusing on details? No, this does't make strategy easier. But it does make strategy more realistic - and
easier to execute. After all, if we know the details and see how they add up to a whole, people know better what is
expected and how what they do contributes to the organization.
An effective way to make sure that the details add up to a coherent whole, is to look at cause-effect linkages
between the various elements of which strategy is composed. When we understand such causal linkages, we see
how one thing leads to the other and how the various parts of strategy are connected.
Ambiguity refers to a lack of clarity about how to interpret something. A situation is ambiguous, for example,
when information is incomplete, contradicting or too inaccurate to draw clear conclusions. More generally, it
refers to fuzziness and vagueness in ideas and terminology. The more ambiguous the world is, the harder it is to
interpret. This can be summarized with the following picture:

If things are blurry, fuzzy or otherwise vague by nature, creating a clearer picture of that fuzziness, blurriness or
vagueness, doesn't make things clearer.
But what you can do, is making sure that your own strategy is clear. Strategy, however, is not always directly
associated with clarity. On the contrary perhaps. The generic and abstract nature of many strategic plans and
mission and vision statements makes them open to multiple interpretations. Just look at your own. When you read
them and are honest, do they really express clearly what the strategy is and is it clear what needs to be done to get
there? If so, that's great. But my experience after reading numerous strategic plans and mission and vision
statements is that, for most organizations, the answer is no.
Strategy making is often a qualitative, descriptive activity in which a strategy is captured in words, figures and
pictures. On the one hand, this descriptive character of strategy is a strength. It helps creating inspiring strategies
and allows using specific words and phrases to express subtle nuances.
At the same time though, the descriptive character also allows us to circumvent being precise about what we mean. Of
course, there is the mantra that a strategy should be translated into clear and quantitative or ‘SMART’ objectives,
targets and KPIs and based on quantitative data. The strategy itself though, is rarely formulated in an accurate,
quantitative way. Rarely do we see expressed, for example, how much we are better or worse at something than our
competitors, how much the quality of our products is more important than their price, or how much our resources
actually contribute to our position in the market. Such quantitative information, though, is elemental for gaining
clarity.
Words help express nuance and explaining one’s views. Numbers, though, help express accuracy and precision. I
don’t primarily refer to financial or research-based numbers here. What I mean is the very act of quantification. By
quantifying things on dimensions through, for example, rating, ranking, or pairwise comparison, we are challenged to
be clear and explicit about that what we are trying to say. It helps us express, for example, how much better (or
worse) one opportunity is than another, or how important (or unimportant) a particular resource is for the
organization. Even though the exact numbers that result from quantification might not matter that much, it is the
level of clarity that is the main benefit.
The VUCA Manager
Now is the time for authentic business leaders to step forward and lead in ways that business schools don't teach.
Let's examine the different ways of leading comprising VUCA 2.o:
Vision – Today’s business leaders need the ability to see through the chaos to have a clear vision for their
organizations. They must define the True North of their organization: its mission, values, and strategy. They should
create clarity around this True North and refuse to let external events pull them off course or cause them to neglect
or abandon their mission, which must be their guiding light. CEO Paul Polman has done this especially well by
focusing Unilever’s True North on sustainability.
Understanding – With their vision in hand, leaders need in-depth understanding of their organization’s
capabilities and strategies to take advantage of rapidly changing circumstances by playing to their strengths while
minimizing their weaknesses. Listening only to information sources and opinions that reinforce their own views
carries great risk of missing alternate points of view. Instead, leaders need to tap into myriad sources covering the
full spectrum of viewpoints by engaging directly with their customers and employees to ensure they are attuned to
changes in their markets. Spending time in the marketplace, retail stores, factories, innovation centers, and research
labs, or just wandering around offices talking to people is essential.
Courage – Now more than ever, leaders need the courage to step up to these challenges and make audacious
decisions that embody risks and often go against the grain. They cannot afford to keep their heads down, using
traditional management techniques while avoiding criticism and risk-taking. In fact, their greatest risk lies in not
having the courage to make bold moves. This era belongs to the bold, not the meek and timid.
Adaptability – If ever there were a need for leaders to be flexible in adapting to this rapidly changing environment,
this is it. Long-range plans are often obsolete by the time they are approved. Instead, flexible tactics are required for
rapid adaptation to changing external circumstances, without altering strategic course. This is not a time for
continuing the financial engineering so prevalent in the past decade. Rather, leaders need multiple contingency
plans while preserving strong balance sheets to cope with unforeseen events.
Volatility
Characteristics
Relatively unstable change. The challenge is unexpected and may be of unknown duration, but it is not
necessarily hard to understand; knowledge about it is often available.
Business example
Prices fluctuate after a natural disaster, such as when a fire takes out a supplier.
Business approach
Conduct risk analysis, build in spare capacity and devote resources to preparedness – for instance,
stockpile inventory or overbuy talent. These steps are typically costly and therefore management
should only commit where the cost is justified by the downside.
Communication role
Prepare a crisis management strategy. The communication function should be integrally involved.
Uncertainty
Characteristics
Lack of knowledge. Nevertheless, the situation’s basic cause and effect are known.
Business example
A competitor’s expected product launch can change the future of the business and the market.
Business approach
Increase business intelligence activities. Collect, interpret, and share relevant information. Engage in
serious boundary-spanning collaboration.
Communication role
The organization’s communication function is the logical area in which to build these resources,
especially as the role incorporates boundary-spanning.
Complexity
The only thing you know with certainty about your strategy is that it’s wrong. Persistent probing
will help you discern if it’s off by 5 percent or 95 percent before events swiftly reveal the answer to
you. Agility is critical because strategic adjustments must be made continually.

The complexity in VUCA is centered on dynamic relationships in which similar inputs may yield vastly
different outputs. It is critical to know which forces are positive, which are negative, and which could
go either way. Continually asking questions will help you see patterns and make more accurate
predictions. As a leader, you must encourage open, direct feedback as well as ideas that challenge
the status quo.
Create an island of certainty amid VUCA turbulence. Constant change can set people on
edge because we humans crave certainty. People worry about their jobs, status, and influence.
This can hurt engagement, productivity, and the willingness to act independently. But you can
reassure your team through stability and transparency of process. For example, be clear about
your decision-making criteria, and be consistent in applying them. Signal your tolerance for
learning-based mistakes that are inevitable in a fast-changing environment, and be sure to
capture what you learn as a way of certifying its value. Think about these 
failures as a resource you’ve already paid for. Finally, be rock solid about your values — they
should endure, drive decision making and action, and be enthusiastically and energetically
celebrated to give them high visibility amid the hurly-burly of daily work.
VUCA isn’t something to be solved; it simply is. Attempts to simplify complexity, or to break
volatility, uncertainty, and ambiguity down into smaller and smaller parts in hopes that each can
be decoded and countered will not make them go away — there are too many elements beyond
the control of traditional centers of power and authority. It is a network phenomenon and can’t be
mastered through industrial age structures and practices. Leaders, attend to how your
organizations respond to issues of volatility, uncertainty, complexity, and ambiguity, because the
world is getting more and more VUCA every single day.
Nobel laureate Herbert Simon was aware of this problem a long time ago. Already in 1971, he said, "A wealth of
information creates a poverty of attention." 

In a sense, the field of strategy has always tried to deal with this issue. Missions and visions or formulating a 'why',
for example, are meant to help you create focus in your organization and direct where the attention should be
going. The same applies to Porter's generic strategies (differentiation, cost leadership and focus) and Treacy and
Wiersema's value disciplines (product leadership, operational excellence and customer intimacy). Their message
is: pick one or maybe two and focus all your attention on that. Along the same line, many strategy tools such as the
SWOT, the balanced scorecard, the BCG matrix and the five forces framework are all doing the same: they all tell
leaders what are the few most important things they should pay attention to.
The common denominator of these tools is simplification. They radically simplify the business world by dividing it
in three, four or five categories that leaders should pay attention to—often in the form of two-by-two matrices.
Managing attention through simplification is nice. Reducing the complexity to a handful of factors to pay attention to
feels good. It makes you feel more in control and that is useful. And simplification is necessary too. We cannot possibly
pay attention to everything and therefore need ways to simplify our world. But there is a limit. If they oversimplify too
much, our tools don't work anymore.
Outside the field of strategy we know this. A good metaphor is driving to a town where you have never been before. To
drive there you probably use your navigation app, Google maps, or a traditional map. All of these tools
are simplifications. Along the idea that "the map is not the territory" they omit a lot of the details of the real world to
give you a clear picture of where to go. But they are still pretty complex and contain a lot of information about the kind
of roads you will drive on, whether you drive through a rural or an urban environment, which exits to take, how far it
is, whether you can expect any delays, and so on.
Imagine you would use a simple two-by-two matrix to get from A to B. We actually have one: a compass. It divides the
world into latitude and longitude and could tell you, for example, that your destination is 34.4 degrees North and 22.7
degrees West. As such, it simplifies the complex task of getting from A to B to simple coordinates. The only thing you
then have to pay attention to is the direction you are driving.
But if you have ever tried driving on a compass, you know this doesn't work. The problem is that, unless you are
extremely well-skilled, a compass is too simple a tool to get the job done. Driving from A to B is not just a matter of
knowing the latitude and longitude. Defining it as such abstracts too much from the reality of driving in the real world.
As a result, a compass doesn't really help us solve the problem.
The same applies to business and strategy. It is an illusion what we can simplify our world of abundance with simple
models and expect those to help us guide our attention and make decisions. If a compass is already too simple for a
relatively straightforward task as driving from A to B, there is no way that simple models like the ones above are
enough to get the much more complex job of getting our organizations from A to B done. We need more advanced tools
than that. Especially, we need more accurate maps and semi-automatic tools that help us tell where to go and how to
get there.
Famous in this respect is a quote by Henry Ford, who said "If I had asked people what they wanted, they would
have said faster horses." 

People don't know in advance what they want and need. It is only when they see a concrete example or opportunity that
they can formulate this. This means that whatever goal is formulated, it is always based on what we deem possible.
This implies that strategy starts with our abilities and the opportunities we see rather than with predefined goals. 

Given that value creation is defined as creating value for customers, this means that every strategy and every
strategic initiative should answer the following single question:
Does it improve the way I create value for my customers?
Organizations create value through their value proposition (or through multiple value propositions). It is for this
reason that the value proposition is at the core of the Strategy Sketch. It is this single element that defines the
contribution of your organization and its core reason to exist. If you don’t offer at least one value proposition that
is appreciated by some customers, your organization simply serves no purpose. And if it doesn’t offer a value
proposition that is at least in some way distinct from others, your organization has nothing to add that is not
already there.
This sounds nice, but creating alignment is far easier said than done. And many others have said this before. This
has even resulted in what we can call a "strategy-as-alignment" paradigm with McKinsey’s 7S model as its most
well known framework. This model says that the organization’s shared values, strategy, structure, systems, skills,
staff and style all need to be aligned and point in the same direction.
But even with tools like the 7S model, the big question remains how to realize alignment in practice. In my
previous articles I’ve laid out the foundations for this (see here, here and here) and in this article I will build
further upon those and explain how you can achieve a well-aligned strategy. As it turns out, this can be done in
three straightforward steps.

Step 1: Understand your strategy 


The first thing you need is knowing what to align. This means that you need a good understanding of the
elements of which strategy is composed and what they look like in your organization. As explained in an earlier
article, the Strategy Sketch—a visual decomposition of strategy into its ten core elements—can be used for this.
It shows how strategy is built up of ten key elements and how these ten elements fit together.
Step 2: Define your future value proposition 
As argued in my previous article, your value proposition is the bread and butter of your strategy. It is this single
element that defines the contribution of your organization and its core reason to exist. Therefore, it should serve as
the basis for your new and improved strategy. There are several tools available to define value propositions in a
qualitative way. Examples are the "Value Proposition Canvas" by Osterwalder and colleagues and Mat Shore’s "
Six Elements of a Value Proposition." For a more quantitative approach you can use the "Strategy Canvas" that is
part of Kim and Mauborgne's "Blue Ocean Strategy." Using tools like these, you can define what your value
proposition is and what it should look like. The best way to do that is to base your value proposition on the needs
of (prospective) customers while comparing it to competing alternatives and your organization’s capabilities.

Step 3: Align the other elements with your value proposition


Once you know what your current strategy looks like along the ten elements and what your future value
proposition should be, the actual alignment can start. With ten elements, there are about a zillion combinations
that you need to consider for achieving perfect alignment. After all, it means that every element of your strategy
has to align with every other element. That is not very practical. With the value proposition as core element,
though, creating alignment is much simpler—not easy, but much simpler because you look at just nine
relationships. So, you go through the other nine elements one by one, assess how well they already align with your
value proposition and identify ways to align them better. You identify, for example, what are your key resources
and competences and how they positively or negatively affect your value proposition. Then you look at your
partnerships, revenue model, and so on and so forth.
In a recent post, I asked the overly pretentious question "What Does Strategy Really Mean?" and I answered this
question by giving the following definition: an organization’s strategy is its unique way of sustainable value
creation. This definition tells you that a strategy explains how an organization creates value for its customers in a
way that is distinct from its competitors, and so that it can maintain this for a while.

To make strategy practical and executable that is exactly what we need to do: open up the black box and look at
strategy's ingredients. The research I did for The Strategy Handbook revealed that there are exactly ten core
elements of strategy. As it turns out, with less elements you miss out on some important parts, and adding more
makes it unnecessarily complex. In brief, they comprise the following:

1.Value Proposition: What products and services you offer, how you offer them, and what added value they
have for the customer.
2.Customers & Needs: The organizations and people you serve and which needs of them you fulfill.
3.Competitors: Others that your customers will compare you to in deciding whether or not to buy your
products or services.
4.Resources & Competences: What you have, what you are good at, and what makes you unique.
1.Partners: Who you work with and who makes your products or services more valuable.
2.Revenue Model: What you receive in return for your offer, from whom, how, and when.
3.Risks & Costs: What financial, social, and other risks and costs your bear and how you manage these.
4.Values & Goals: What you want, where you want to go and what you find important.
5.Organizational Climate: What your culture and structure look like and what is special about them.
6.Trends & Uncertainties: What happens around you that affects your organization and what uncertainties you
face.
With ten elements, this is quite a list. But now you have all the key elements of your strategy. That’s it. Together,
they give a much more detailed and concrete idea of the meaning of the term strategy than just a definition.
As a list though, it might look still somewhat unstructured. Therefore, I’ve developed a visual tool that combines
the ten elements in a structured and coherent way and which is depicted below: The Strategy Sketch.
By organizing the ten elements along the structure of the Strategy Sketch you get a more comprehensive and
grounded understanding of what strategy is and what it takes to make one. So, now you know what strategy really
means and of which ten key ingredients it consists.