The U.S. presidential election has put a lot of managers, both near and far, on edge. A look back at our own archives unearthed some valuable advice about strategic planning that just may help businesses as they prepare to operate under a new political administration.
How should businesses prepare for changes to the environments in which they operate given the November 2016 election of Donald Trump to the U.S. presidency? Trump has talked about upending global trade deals, deporting millions of undocumented workers, and ratcheting back the U.S. Affordable Care Act. The New York Times noted that while “companies hoping to profit from Mr. Trump’s economic policies have seen shares soar,” there are also fears in some nations “that Mr. Trump’s policies may drive up interest rates and inflation, an expectation that some traders call Trumpflation.”
Managers are used to operating in political climates that change with some frequency, but for leaders everywhere — both in the U.S. and abroad — the ascension of Trump and his expanding team of advisors and appointees comes with a different kind of uncertainty. How much of today’s order might a Trump administration actually blow up? And how can managers best ready themselves and their businesses and set a strategy that allows them to succeed in this environment of uncertainty?
The answer may lie in understanding that “not all strategies work equally well in every setting,” as Christopher B. Bingham, Kathleen M. Eisenhardt, and Nathan R. Furr sagely wrote in a 2011 article for MIT Sloan Management Review.
In “Which Strategy When?” Bingham (UNC Kenan-Flagler Business School), Eisenhardt (Stanford University), and Furr (now at INSEAD) detail the importance of knowing how to frame strategic planning:
“First, we discovered that the logics of the different strategic frameworks break into three archetypes: strategies of position, strategies of leverage, and strategies of opportunity. What’s right for a company depends on its circumstances, its available resources and how management combines those resources together.
Second, by observing market leaders employing archetypal strategies, we found that many assumptions about competitive advantage simply don’t hold. For example, although strategy gurus talk about strategically valuable resources, sometimes very ordinary resources assembled well are all that’s required for competitive advantage. Sometimes it makes good sense to bypass the largest markets and focus instead on where resources fit best. In other circumstances, it may be preferable to ignore existing resources and attack an emergent market. In some situations, basic rules of thumb work better than detailed plans. Surprisingly, these simple strategies can be harder to imitate than complex ones.”
As we prepare for the new year and a new political climate, we invite you to revisit this article from our archives.