The art of strategy in a polycrisis world

Getting people to execute on your strategy has never been easy, and the bad news is that it might be your fault rather than theirs. “What often looks like resistance to change is actually lack of clarity,” says Costas Markides, Professor of Strategy and Entrepreneurship at London Business School.

This is definitely the case when it comes to executing strategy. “The real challenge is that the majority of employees – 85%-95% of them – claim to not even know the strategy! Even after the CEO stands up and delivers it to the troops in a townhall meeting.” And no matter how fancy their PowerPoint is.

Knowing the strategy is even more important when the context in which businesses are operating is so confusing and challenging. For previous generations, crises passed. Now we’re living in a “polycrisis” – where multiple and overlapping disruptions combine to create a context of continuous disruption.

In a recent webinar for the Strategic Management Society, talking to a mix of academics and practitioners, Markides pointed out that a lot of issues that were once considered external – trade wars, sanctions, industrial policy, tariffs – now directly shape competitive advantage. Where you operate, source and invest matters as much as what you sell, and it’s increasingly hard to predict anything.

According to the World Uncertainty Index, compiled by the IMF and Stanford University, uncertainty has increased by 300% in the past 10 years (2015-2025). The world is more and more interconnected, so change happens at an accelerated rate and spreads further. Which means leaders have to bite the bullet and make decisions faster than feels comfortable.

This in itself isn’t new, says Markides. “Strategy has always been about making big, difficult and difficult-to-reverse choices under uncertainty.” And the basic who/what/why of strategy still holds good: Who are your customers, your products, your segments, your regions? What is your offer? How will you sell, market and distribute whatever that is?

But how we make strategy has to change, he argues. Now, when there’s a big strategic decision to be made, there’s no time for lengthy analysis, for two reasons. First: you don’t really know what the right choice will be (gulp!). Second: even if you do make the right choice, it has a much shorter lifespan.

“So strategy shifts from what position you’re taking to ‘How can we continuously renew?’” Early signal detection becomes a competitive advantage. He advises companies to enter earlier, scale faster, and exit slower, and to “manage for temporary”. He is also a passionate advocator for experimentation. “Exploration becomes as important as execution.”

He suggests trying small experiments, such as keeping the door to your office open for a month to see if it changes the culture. Or if you’re a salesperson, try answering a phone call on the first ring and see how that affects the relationship. “This way you can collect the data instead of having to convince people with theories,” he says.

Experimentation is a form of play, which shouldn’t be seen as a lower-level activity just because it’s not “serious”, he insists. “People are attracted to fun activities.” So try things out, and learn from the results.

It’s also vital for organisations to have the right capabilities for growth and adaptability. Think modular: “You can’t customise everything for every crisis. Instead, develop reusable building blocks – data infrastructure, supplier networks, digital platforms, decision processes – that can be deployed across multiple fronts.”

Scenario planning needs to become a standard ingredient of every strategy session, he adds – and, here, managerial judgement becomes ever more essential.

Some of this is hugely challenging, he concedes. “So you’ve got new information coming in – how do you decide if it’s good data or just noise? Respond quickly – but not too quickly! Keep your options open – but also make a decision! Do nothing so you achieve clarity – but make sure to move, or you’ll appear indecisive.”

On the plus side – although this can pose additional challenges – you don’t need to make all of those decisions yourself. Markides says the only way it can work is if you decentralise the strategic decision-making and make that part of the strategy. “More voices need to be involved than just the CEO, the board and the strategy team. People say the leader has to make the call – but we need more than one leader now.”

He’s not just talking about gathering ideas from other parts of the organisation to feed into the strategy, he means actually letting more people take the decisions. How can you do this without losing control? What about the danger that, in their efforts to grow and respond, companies’ actions dilute their original positioning, whatever it was that made them a success in the first place (the “growth trap”)?

In the polycrisis world, where there are numerous and rapid changes in the outside environment, this losing the way happens more easily – not necessarily because of one decision but cumulatively. What you need, therefore, is to establish guard rails – clear strategy choices that the organisation has made, so your employees can easily see if a particular course of action falls within those parameters or not.

“Think of how you raise your children,” he says. “They need to know your values and the rules. It’s the same with a company. You have your guardrails in place so that if someone suggests a completely different kind of customer, or a different product, your employee knows to say no, or at least not without first escalating the query.”

So you’d better make sure your values are fully embedded and understood too – and again, that doesn’t mean going all big and clever with your language. “Most value statements are corporate nonsense that mean nothing to human beings,” says Markides. “What is an open mindset? You can’t just say to people ‘Be agile’ or ‘Be customer-centric’. What does that actually mean, what does it look like – what are the specific actions that allow me to be more agile or more customer-centric?”

Whether they like it or not, it’s the leaders who set the tone, and whose behaviour makes the organisation’s real values obvious, he says. “People internalise values in their hearts, and they are instilled via day-to-day actions – especially in difficult situations. Your employees will see what your values are by the decisions you make when there’s conflict.”

If, for example, a particular course of action is going to cost your company £10m but it’s better for the environment and you go ahead and do it anyway, people will see that you mean what you say. Markides cites the steel company Alcoa , whose motto was “Safety is job number one.”

When a rising star failed to report an accident at the site he managed, he was summoned to the head office in New York and fired on the spot. That sent a message: “You just fired the next CEO because he undermined one of our values! That’s what employees are on the lookout for.”

Finally, take a long, hard look at your culture and incentives: what actually gets rewarded? “Because what looks like a people problem is often an environment problem.” And who’s responsible for the environment? You are.