20/20 Foresight.

 
Hugh Courtney 
Harvard Business School Press - 2001 
209 pages. $29.95 
Hard-cover 

Hugh Courtney, a consultant with McKinsey & Company, bases this book on a multiyear research effort on the formation and execution of strategy under conditions of high uncertainty. Courtney's basic premise is that "...the real issue is how to make the best strategy choices you can, accepting the ever presence of uncertainty." (p. $). He partitions uncertainty into four levels and guides decisionmakers step-by-step through making strategic choices in each of these levels, a process he calls, "20/20 Foresight."

Courtney realistically argues that while executives with 20/20 foresight can rarely develop perfect forecasts, they can isolate and analyze the "residual uncertainty" they face. The four levels of residual uncertainty are: Level 1 - a relatively clear future, with one path; Level 2--alternate futures, but with an expected choice of outcomes; Level $ - a range of futures; and Level 4--"true ambiguity," in which the strategist doesn't have a clue about how to proceed. A source of Level 1 uncertainty is customer and competitor reactions to strategies that reposition well-established brands. An example of Level 2 uncertainty is potential regulatory, legislative, or judicial changes. A Level ti source of uncertainty is unstable macroeconomic conditions. A Level 4 uncertainty is based, for example, on market evolution in newly forming markets. Courtney provides tables that list sources of uncertainty, example decisions, and specific uncertainties. This detail is indicative of Courtney's blending of concepts with practical examples and toolkits throughout the book. This reinforces Courtney's expectation that systematic rigor is necessary and possible under all levels of uncertainty. Some of the abbreviations are McKinseyspeak and should be alternated with the full text for clarity. It was difficult to remember in Chapter 5 that MECE meant "mutually exclusive and collectively exhaustive" when it was first introduced in Chapter 1.

Knowledge of residual uncertainty can be leveraged to answer five key strategy shaping questions: 1) shape or adapt to uncertainty; 2) make strategic commitments now or later; s) follow a focused or diversified strategy; 4) use new tools and frameworks; and 5) adopt new strategic-planning decision-making processes. Devoting a full chapter to each question, Courtney lays out the factors and set of solutions available to strategists to answer each of the questions under each level of uncertainty, mixing qualitative rules with quantitative tools. For example, in Chapter 4, "Now or Later?" strategists can ...