How do you manage uncertainty when, by definition, it involves wrestling with stuff that’s difficult—and sometimes impossible—to predict?
It all starts with understanding (and then leveraging) your competitive advantages, says Keith Bickel, author of Mastering Uncertainty. The book posits three underlying bases of advantage (time, structure, and resources) and four “layers” (resources, assets, capabilities, and competencies), and then turns to three different business models to optimize your competitive edge.
- Pioneer Strategy (think Kodak and the camcorder, the Sony Walkman, or Miller Lite)—”The goal,” writes Bickel, “is to develop an advantage or advantages that, even during uncertainty, allow you to beat your competition to market and establish dominance.” He points out that pioneers have leveraged such attributes as pricing, product line depth, and presence across different marketplaces, and notes that small businesses can be equally effective at engaging in pioneer strategies. Bickel warns, however, that a pioneer strategy alone is not enough; in fact, many pioneers are unable to retain their frontrunner status for more than five years.
- Pouncer Strategy (think IBM in the PC market, Perrier, or even Google’s dominance of the search engine market)—“The goal,” writes Bickel, “is to follow the pioneers rapidly into the market with a more desirable offering so that you surpass and dominate [them].” Two key attributes of pouncers are that (a) they have strengths over multiple capabilities, and (b) they focus on differentiating themselves from the pioneer.
- Hedging Strategy (think GM’s Saturn division, Honda’s rise to dominance over Yamaha in the U.S. motorcycle market, or Monsanto’s move into biotechnology)—Hedging in the market context, writes Bickel, means “building one or more abilities…that run counter to the firm’s existing abilities.” He notes that hedgers win when they can blend the best of the pioneer and pouncer strategies.
While the first 30 pages of the book are pretty technical, Bickel shines when he’s putting theory into action. Each of the strategies is accompanied with examples of both companies that have successfully navigated a path and businesses that failed to seize some important competitive advantage. In an era where market, financial, and regulatory uncertainties abound, Mastering Uncertainty offers good advice and lots of food for thought.