What are the key uncertainties (and subsequent risks) to successfully implementing a strategy?
That is what Josef Oehmen, Pelle Willumsen, Bzhwen A Kadir and Torben Juul Andersen are trying to answer with their new uncertainty framework. A framework that helps executives classify and understand the risk profile of a strategic initiative.
At the end of the day, there are two big uncertainties in strategy implementation: a) does the strategy make sense in the first place (i.e., is it actually a good strategy?), and b) if yes, can you execute it?
Through a number of case studies as well as a series of interviews with senior executives and their staff involved in strategy work, we collected examples of critical uncertainties and their related risks. We developed a framework to collect and describe them, so executives can use it as a checklist to properly classify and understand the risk profile of a strategic initiative. We have identified three major categories of uncertainty sources:
- Uncertainties regarding ability to execute
- Uncertainties regarding technical feasibility
- Uncertainties regarding market needs
You can read more about the three categories of uncertainty right here.
Figure 1. Sources of uncertainty in strategy implementation