Professor of Strategy
What do a camel, a salmon, a chameleon and an octopus all have to do with strategy? You'll find the answer in the recently published Strategy in Turbulent Times - How to Design a Strategy That Is Robust and Future-Proof. This latest book by Professor Kurt Verweire, as the title suggests, provides a practical guide to help your business not only survive in today's turbulent times, but also thrive.
First and foremost, what is turbulence? “Most of us are familiar with the acronym VUCA – volatile, uncertain, complex and ambiguous – which is often brought up when discussing turbulent environments,” Kurt explains. “Turbulence can take many different forms and can be defined in many different ways. Personally, I like to make the distinction between disruption and disturbance. With disruption, your competitive landscape changes. Turbulence is then caused by new market players with a fundamentally different business model from yours, stealing your customers. However,” he continues, “you can also face sudden shocks or shifts in your supply and demand without experiencing any change in your competitive landscape, e.g. resulting from a natural disaster, an accident such as the grounded container ship in the Suez Canal, the coronavirus pandemic or the war in Ukraine. That's what I call a disturbance.” Why is this distinction important? “To develop a turbulence strategy without thinking about the nature of said turbulence would be unwise. Disruption and disturbance are different phenomena that require different strategic responses.”
The book 'Strategy in Turbulent Times' by Kurt Verweire provides a practical guide to help your business not only survive in today's turbulent times, but also thrive. In this video, Kurt explains how turbulence strategy is different from competitive strategy - and which strategic options you have to deal with turbulence.
This is not Kurt's first book, having already written several on the topic of strategy. But turbulent times call for a different approach: “Classic strategic models focus on how to face up to the competition. Yet business leaders tell me that it is not necessarily their competitors that keep them awake at night, rather those shocks and major shifts. While you may have certain risk management procedures in place for that, turbulence brings with it not only risks, but also opportunities – hence the need for a turbulence strategy in addition to a competition and growth strategy1." Now, a lot has already been written on turbulence strategies, because, though it may be a cliché, we are living in increasingly turbulent times. And yet, Kurt takes issue with the existing literature. “I have found a lot of mixed, even conflicting advice – which is all very confusing. With this book, I hope to bring a certain amount of clarity.”
Quite a few books on turbulence strategy read like cookbooks offering ready-made recipes. Strategy in Turbulent Times deliberately takes a different approach.
“To respond well to changes in your business environment in increasingly turbulent conditions, it is important to pick up on such changes as quickly as possible,” explains Kurt. “Corporate foresight is the ability of a business to detect trends and changes, both in the right manner and in a timely fashion. And there are no ready-made recipes for doing this. It is not a question of predicting the future, but rather of imagination – imagining what might happen. It's about identifying, observing and interpreting the right signs, the causes of change, and responding to them accordingly.” This is easier said than done, with the book dedicating an extensive chapter to this topic.
Following the analytical phase, strategic choices need to be made. What strategic options do you currently have at your disposal to deal with turbulence? “To work this out, you need to ask yourself two questions,” explains Kurt. “What are you doing with your core business – are you sticking to your current business model or adapting it? And how do you respond to opportunities that fall outside your core business – should you set up new initiatives for them or not?”
Depending on your answers, Kurt says there are four possible strategic options to explore:
For three out of the four strategic options, business model innovation, in one form or another, plays an important role. But while business model innovation, especially corporate innovation, is often put forward in the literature as the answer to turbulence, there are plenty of examples of businesses successfully adopting the core resilience strategy. Depending on the nature of the turbulence facing your business, this strategy might take different forms.
“Focusing on your core business, not responding to opportunities outside it and sticking to your existing business model does not mean that you are not doing anything to deal with the turbulence. Quite the opposite, in fact,” explains Kurt. “Businesses that are capable of opting for this strategy have developed sufficient resilience to absorb temporary shocks and shifts in supply and demand and are comfortable responding to new market players. Within their core business, they detect opportunities earlier than their competitors, with their superior adaptability enabling them to respond quickly. Take Fender, for example. One of the world's most iconic guitar brands, they did fantastic business during the coronavirus pandemic as they were able to rely on their existing online sales channel. Through the Fender Play app, they managed to attract thousands of new guitar enthusiasts. Or consider US chip manufacturer Intel, who had to deal with the after-effects of the Fukushima earthquake in 2011. The company had learnt from previous crises, with their well-versed crisis management capabilities allowing production to continue, despite the heavy damage inflicted to one of their plants. And these are just two examples. You will find many others in the book.”
Kurt describes the core resilience strategy as that of the (Bactrian) camel. Why? “The wild Bactrian camel lives in Mongolia's Gobi Desert, a barren and rocky expanse with hardly any vegetation or water, frequent violent sandstorms and an extreme climate. In the freezing winters, the mercury drops to -40°C, while the blistering summers surpass 55°C. The camel, however, has adapted remarkably well to its inhospitable environment. Without water or food, it is capable of surviving on the fat stored in its two humps. If it needs to, it can go for months without any fluids. What's more, it drinks water that is saltier than our seawater and, thanks to its thick lips, it eats even the most spiny of vegetation without batting an eyelid. During a sandstorm, it simply closes its nostrils, with two rows of thick eyelashes protecting its eyes. And as if the harsh climate, along with the food and water scarcity, were not enough of a challenge: in Lop Nur, located on the western edge of the Gobi desert, the poor beasts also had to endure more than 30 years of nuclear testing – though apparently without incurring any major side-effects. As such, it could be said that the wild Bactrian camel is just about the most resilient animal you could ever imagine.” And as for the other three turbulence strategies, why salmon, chameleon and octopus? “You’ll have to read the book to find out,” teases Kurt.
Strategy in Turbulent Times is based on many years of research and includes an extensive list of references. But make no mistake: this is anything but a theoretical tome. “I don't write theoretical books,” insists a smiling Kurt. “In my view, research should be as practically relevant and applicable as possible.”
The book therefore contains not only a conceptual framework, but also numerous examples, case studies and practical tools. It has been written to make you think about the causes and nature of turbulence in your business environment, as well as the different strategic options at your disposal. It provides tools to choose the option that is perhaps the most suitable for your organisation, taking into account all possible preconditions, while also providing instruction on its proper implementation, and helping you to assess whether your organisation is poised for success.
This book is not only aimed at managers and business leaders already facing their own real-life turbulence – anyone interested in strategy can learn a lot from it.
Takeaways The book comprises seven chapters, each one closing with useful key takeaways. While to summarise them all here would be an impossible task, Kurt is happy to highlight three messages that he hopes will stick:
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Where can you find it?
Strategy in Turbulent Times - How to Design a Strategy That Is Robust and Future-Proof is published by Lannoo Campus and is available in all good bookstores. You can also order the book from Amazon.
1 In strategy, a distinction is typically made between a business unit strategy (in other words, a competitive strategy) and a group strategy (which Kurt refers to as a growth strategy, as it involves growing beyond the core business).