MIT Sloan Management Review

The field of forecasting has advanced significantly in recent years. But managers need to learn from history about what they can and cannot predict, and develop plans that are sensitive to surprises.

As sustainability-related pressures change the competitive landscape, what kinds of capabilities and characteristics will that landscape demand of companies that aim to thrive? Here’s what Business of Sustainability survey respondents and sustainability thought leaders say.

Many companies have trouble making the transition from a failing business model to one that works. Often, one culprit is an inability to experiment.

MIT Sloan School professor Arnoldo C. Hax, a well-known strategy expert, thinks companies need a different approach to thinking about strategy.

Expertise in strategic thinking is not the product of innate ability and pure serendipity. It arises from specific experiences (personal, interpersonal, organizational and external) which occur over 10 or more years.

Although most companies undertake acquisitions with an eye toward fueling growth, the resulting infusion of new ideas, perspectives and processes can produce lasting benefits that are broader and deeper.

Many companies’ brand portfolios have become bloated and obscured. A five-step approach can illuminate which brands should be supported, retired, repositioned or otherwise honed to bring greater clarity to the portfolio.

Over the course of the past two decades, it has become increasingly, abundantly clear that companies must find ways to be more innovative, more flexible and better prepared.

Today’s almost mythical notion of the hero-leader demands that vision be a pre-eminent executive trait. Time and time again, if a corporate leader is successful, his or her vision is cited as the cause and lauded as the foundation of the leader’s greatness.

Theory-focused planning helps executives pursue ventures so cutting-edge that no road maps exist. The key is learning from strategic experiments.

Few organizations understand the benefits of having tactical planners, who use computer models to optimize the supply chain, in close communication with the senior managers who formulate strategy. The author outlines a planning approach that ensures that critical supply-chain details inform a company’s business strategy and that supply-chain management aligns with the strategic direction.

For many years, when it came to setting goals, organizations took a top-down approach. It made sense: Goal setting requires information of the sort only top-level managers had, and it was their job to make the calls and pass them along to the lower levels of the company.

The goal of a strategic planning process should not be to make strategy but to build prepared minds that are capable of making sound strategic decisions.

The ability to set the right price at the right time, any time — the very definition of a pricing capability — is becoming increasingly important. Based on their work with dozens of companies, the authors explain how investments in human capital, systems capital and social capital come together to form a pricing capability that competitors will have a hard time imitating.

Using the metaphor of improvisational theater, the author lays out six elements of strategic improvisation that executives can apply to transform their organizations into experimental arenas. Companies that engage in such continual improvisation are better equipped to explore highly threatening disruptive technologies and embrace radical change.

Firms gain competitive advantage by improving the performance of suppliers and by sidestepping the snares common to such efforts.

Much has been written in recent years about flexible factories and flexible manufacturing systems (FMS), but the literature has been largely theoretical; managers who are interested in making their factories more flexible have little empirical research on which to base their decisions.

How can companies combat the overconfidence and tunnel vision common to so much decision making? By first identifying basic trends and uncertainties and then using them to construct a variety of future scenarios. The author shows how two major companies got a richer picture of the possible future through scenarios — and dramatically improved their strategic planning.