In Intended Consequences, I illustrated how our economy had endured a period of unparalleled turbulence. From Y2K to 9/11, the wars in Iran and Afghanistan, the Asian Financial Crisis, Katrina, Mad Cow and Enron/WorldCom we have experienced a decade of volatility. Recent history has presented the Gulf spill, the Haiti and Chile disasters, and now civil unrest in the Middle East. Volatility has become the norm.
The violence in Egypt is particularly daunting because we don’t have a sense of the extent to which the unrest will spread to other nations in the region. Even the White House seemed surprised as stories spread of the President watching television like the rest of us, trying to make sense of it all.
The passage of time has only magnified the “strategy paradox”. How can an organization plan for a future that is impossible to predict? I believe that in the face of such uncertainty there is a compelling need for more examination, reflection and planning. Uncertainty should prompt us to think more provocatively about how changes in our environment will manifest within our businesses and our society (one lesson we learned from protests in Egypt is that social networking is not only a tool, but a potential weapon).
Raw materials continue to be unstable, as prices from oil to cotton have moved sharply higher. If you were a business dependent on such materials, you may need to rethink your pricing strategy, positioning, marketing, etc. in an effort to weather the storm, or perhaps take advantage of new opportunities (to raise prices for example).
One of the ironies of global events is that we cannot comprehend their severity in midstream. When we initially heard of the first plane striking the World Trade Center, we didn’t understand the implications. It was only after time that the terrorist plot and its affect on the world crystallized for us.
So as the events in the Middle East unfold, we must be more thoughtful about what might change. Will civil unrest further American interests or de-stabilize the region? What will be the affect on the stock market, currency markets, energy prices and raw material costs? How might the U.S. and its allies react?
Only time will tell.