Planning for Uncertainty

UNCERTAINTY—IN THE ECONOMY, society, politics—has become so great as to render futile, if not counterproductive, the kind of planning most companies still practice: forecasting based on probabilities.

Unique events, such as the Perot phenomenon or the dissolution of the Soviet empire, have no probability. Yet executives have to make decisions that commit to the future current resources of time and money. Worse, they have to make decisions not to commit resources—to forgo the future. The lengths of such commitments are steadily growing: in strategy and technology, marketing, manufacturing, employee development, in the time it takes to bring a new plant on stream or in the years until a commitment to a store ...

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