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Strategic planning in an age of turbulence

This article considers the inevitability of turbulence, which should have major implications on how organizations can plan for their long-term survival.

For an organization, turbulence can be defined as unpredictable and swift changes in its external or internal environments that affect its performance.

Internal events usually limit their effect to the organization in which they occur. External events are much more wide reaching, often affecting all organizations or all organizations within an industry sector. These events would often be identified, though not necessarily predicted, through a PESTEL or Porter’s five Forces analysis.

A decade ago, economic growth, interest rates, the impact of the internet and so on were moving in stable patterns. Of course, even during this period of relative stability, music companies were trying to work out how to respond to MP3 downloads, and a company like Kodak was trying to tackle the impact of digital cameras. However, the environment as a whole did not spring too many nasty surprises and businesses felt confident to plan. How different the last few years have been, as shown above in the examples of external events. Furthermore, once turbulence is established it can be some time before things settle down again. Therefore, we are now, undoubtedly, in the middle of a turbulent period.

Our current environment is not uniquely turbulent and there are many examples of turbulent periods from the last 100 years or so: World War I, the great depression of the 1930s, World War 2, social changes in the 1960s, the disintegration of the Warsaw Pact, events following the attack on the World Trade Center. Turbulence seems to be inevitable, though few people recognize that, perhaps because its cause and effect cannot be predicted in any detail. However, we know something unexpected always happens. The inevitability of turbulence should have very important implications for how organizations should plan for their long-term survival.

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