In an age of political, technological and market uncertainty, Jan explains why it’s important for business leaders to think strategically about uncertainty, learn how to effectively approach decisions in uncertain times, and what MBA students can expect to learn on the elective.
What uncertainties are businesses currently facing?
Well, I guess the first type of uncertainty that many businesses in the UK are currently facing is Brexit uncertainty. But beyond that we also see many companies that don’t know if their latest product will still be viable in a few months due to speedy technological progress. Other sectors face frequently shifting consumer tastes – products that are popular now may well be out of fashion in a couple of months and company investment is at stake. Yet other businesses are also facing a lot of competitive uncertainty from escalating rivalry, such as the recent intensifying competition between Google and Amazon.
To make things even more complex, for many companies different dimensions of environmental dynamism (i.e., competitive rivalry, technological change, and sudden shifts in customer preferences) come into play at the same time. Sometimes it seems like chess: company leaders are expected to predict and think about all the different strategic moves possible. But in uncertain times the rules of the game are rarely defined (or at least frequently changing), the payoffs are not clear in forecasting, and the number of players on the chess field suddenly increases. I hope that this elective will help students to make better decisions in the VUCA environment they operate in.
Why is it important for business leaders to be prepared for uncertainty?
Dr Jan-Michael Ross, Assistant Professor and Module Leader, • Strategy in Volatile and Uncertain Environments.
Faced with dynamic and unpredictable environments, leaders often find themselves in a position in which they have to make a decision, such as committing to a new technology, launching a new product, or responding to aggressive actions of competitors. However, when you don’t know what the future will bring, we prefer to hesitate in making such bets.
Decision-making becomes quite a challenge: you don’t want to leave the opportunity for competitors on the table but you also don’t want to commit too early. If the decision turns out to be wrong, it can often be quite costly to turn the wheel back. Instead of simply throwing a dice, leaders need to know how to turn the odds to their favour and effectively manage their bets – the field of strategy provides some interesting answers to this challenge.
What do students learn on the Strategy in Volatile and Uncertain Environments elective?
A range of topics are covered on the elective. First, we will look at different types of conditions that firms are facing. We’ll cover some terms students might have had experience with from their day-to-day business, such as volatility, uncertainty, complexity, and ambiguity (or the VUCA framework), and learn what these mean for strategic management.
We’ll then look at how to manage downside risk and how to benefit from the upsides of uncertain environments. There are many companies that are actually doing quite well despite dynamic and uncertain environments, take Google and Amazon for example.
Next is the competitive landscape. Students know that competition can be fierce in many emerging and established industries. We will look at different strategies they can develop to outcompete their rivals in dynamic competitive environments. Finally, it’s also important to look at dangerous pitfalls of strategic-decision making in such environments that can lead to worse outcomes than before.
Can students reflect on their experiences in the classroom?
I hope students will bring in many examples from experiences and the decisions they’ve been making in their companies. It could also be a personal decision, for example, the decision to invest in an MBA. Beyond the students’ own experiences, we will take a look at a range of case studies and examples from the business press to enrich the discussion and widen the scope of topics. By debating over these topics, students will be prepared for future decision-making, and learn tools and methods for how to approach them.
Do students glimpse your research on the elective?
Yes. That’s the benefit of studying at Imperial College Business School because we are a research-led business school. My teaching incorporates the research I’m doing on the topic and, because it’s my research expertise with relevance for today’s business leaders, I’m extremely passionate about it.
Does the elective have business application immediately?
I have taught this topic on other programmes and workshops. During one of our graduations, a student told me that the content gave his team the approach they needed to convince venture capitalists to invest in their start-up – I was extremely happy to hear it and felt that this is the kind of impact you are working for as a lecturer! The elective has certainly immediate application to business leaders in the classroom who are currently facing uncertainty and must make decisions.
Learn more about the Strategy in Volatile and Uncertain Environments.