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https://doi.org/10.1177/00081256211022039
https://doi.org/10.1177/00081256211022039
California Management Review
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DOI: 10.1177/00081256211022039
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1
Preparing
Organizations for
Greater Turbulence
Paul J. H. Schoemaker1 and George Day1
SUMMARY
Vigilant organizations excel at seeing looming threats and embryonic opportunities
sooner than rivals, which prepares them to act faster when needed. Four drivers
distinguish vigilant from vulnerable organizations, which can be used to design a
roadmap to improve organizational acuity and preparedness. The fulcrum of these
changes rests with the leadership team by demonstrating a strong commitment to
vigilance at all levels, and reinforcing this by making targeted investments in foresight
capabilities. These strategic moves also need to be supported by corresponding
changes in the strategy-making process and by ensuring accountability and
coordination of vigilance activities throughout the enterprise.
KEYWORDS: adaptive leadership, agenda-setting, agility, ambidextrous
organizations, ambiguity, implementing strategy, information sharing, innovation
management, strategic vision, scenario planning
Global enterprises have prospered for decades thanks to a support-
ive environment of falling trade barriers, protected financial sys-
tems, adequate social and political stability, and rapid advances in
digital technologies. But blithe assumptions about continued eco-
nomic progress have been upended by a series of geopolitical shocks and the dev-
astating global pandemic. Deceptive stability has been replaced with mounting
turbulence, political discontent, growing uncertainty, and leadership anxiety.1
Recall the havoc wrought by extreme weather events, the deep financial crisis
of 2008, populist autocratic leaders rising in many countries, a fast-spreading
global pandemic, trade wars with China, and the massive cybersecurity breaches
launched by Russia.
Many organizations were ill prepared for these shocks, especially the feroc-
ity and speed of the attack of the COVID-19 virus. Still, some companies were
better equipped to absorb the unexpected turbulence and may emerge stronger as
1The Wharton School, University of Pennsylvania, Philadelphia, PA, USA
1022039CMRXXX10.1177/00081256211022039CALIFORNIA MANAGEMENT REVIEWPreparing Organizations for Greater Turbulence
research-article2021
CALIFORNIA MANAGEMENT REVIEW 00(0)2
the shock waves ebb. These more vigilant organizations are better at anticipating
and responding to what is coming over the horizon by avoiding the pitfalls of
wishful thinking, willful blindness, and short-term myopia. Their leaders designed
the organization to have greater resilience under VUCA conditions (referring to
Volatility, Uncertainty, Complexity, and Ambiguity). Following Nietzsche’s dictum
that what doesn’t kill you makes you stronger, vigilant enterprises try to become
more resilient with each shock or challenge they survive.
We define vigilant organizations as those better equipped to anticipate
early signals of surprises and more adroit at handling turbulence or upheaval
when it strikes. These self-learning enterprises share a collective vigilance capabil-
ity buttressed by curiosity, candor, and openness to diverse inputs, coupled with a
willingness to challenge superficial assumptions and outdated conventional
wisdom.2 Vigilant leadership teams explore looming threats and embryonic
opportunities sooner than their rivals, which prepares their organization to act
faster when the time is right. Leaders failing to foster such vigilance are typically
late in comprehending early warning signals and therefore often forced to react in
haste. By then, they will have lost valuable degrees of freedom to maneuver and
become at risk of having to choose from inferior options.
Vigilance is especially needed and rewarded when firms encounter unex-
pected turbulence or turmoil. Persuasive evidence for this claim comes from a
longitudinal study of 85 European multinationals in 2008 by Rohrbeck and Kum.3
They assessed the “future preparedness” of these firms using a detailed survey
building on our earlier work4 and then classified them into three levels of organi-
zational vigilance. These researchers waited seven years to measure each firm’s
gain in market capitalization between 2008 and 2015. For the 36 percent of firms
judged to be highly vigilant in 2008, the average gain in stock price was 75 per-
cent—nearly double the gains of the remaining more vulnerable firms. The vigi-
lant firms were 33 percent more profitable by 2015 than the others. There is
corroborating evidence, from other outcome-based field research, that vigilance
significantly improves agility, ambidexterity, and innovation.5
Most leaders recognize that their organizations need to become more vigi-
lant, but struggle to make it happen. How should they build the right kind of col-
lective sensing and foresight capabilities,6 and hone their organizational sensibilities
to stay alert and mindful? How can they prepare the organization to be ready to
act faster when the time is right? Where and how should the leadership team start
the vigilance improvement process? Which moves will have the greatest leverage
when time is limited and resources are scarce? Our article addresses these ques-
tions with a tested roadmap for becoming a more vigilant organization, that is
better prepared to thrive in the face of uncertainty, greater turbulence, and loom-
ing inflection points.
Distinguishing Vigilant from Vulnerable Organizations
Our research began by contrasting vigilant firms such as Adobe,
Mastercard, and Intuit with vulnerable organizations that were blind-sided, such
Preparing Organizations for Greater Turbulence 3
as GE’s Power group not foreseeing a sharp drop in demand for their turbines,
Facebook’s exposure to fake news scandals, and Danske Bank’s money launder-
ing malfeasance which they ignored until it was too late. We combined such case
examples with insights from organizational and strategy research, described fur-
ther in the Appendices.7 We then hypothesized that four main drivers of organi-
zational vigilance would best distinguish vigilant from vulnerable organizations.
These hypotheses were tested with a survey8 of senior leaders of 118 companies
from around the world (see Appendix A). The four drivers,9 in order of their
relative influence in our study, are:
•Leadership commitment to vigilance, as demonstrated by an openness to weak
signals from diverse sources, while encouraging others in the organization
to explore issues beyond their immediate domain and think outside the
box. Vigilant leadership teams focus externally and nurture curiosity at all
levels and across silos. They are consistently willing to play a long game
strategy.
•Investments in foresight are often made through centralized foresight units
for scanning and by using strategic dashboards to monitor relevant future
scenarios. Leaders insist on a disciplined search for investment opportuni-
ties. In parallel, they orchestrate a flexible, real options portfolio of possible
responses.
•Strategy-making processes that are flexible and adaptive, by adopting “outside-
in” and “future-back” approaches. Outside-in thinking starts with how the
outside world is changing and not with the current strategy or resources.
Future-back thinking asks what it takes to win in the longer term and how to
plant the necessary seeds now.10
•Coordination and accountability for receiving and interpreting weak signals, sup-
ported by an organizational norm of sharing information readily across silos.
This last driver is what it takes for the other three drivers to flourish.
Within vigilant organizations, these four drivers work together as a system
of connected and reinforcing elements, with the leadership team playing a steer-
ing role in starting, redirecting, and prioritizing vigilance initiatives throughout
the organization. Within more vulnerable organizations, which suffer from too
many blind spots and missed opportunities, these drivers are often uncoordinated
and poorly executed, with leadership commitment episodic at best. The limited
attention resources of the leadership team within vulnerable organizations are
usually absorbed by short-run defensive responses to unwelcome surprises. This
internal focus on immediate challenges tends to create costly blind spots and then
often running through red lights. Since the external world is a complex, dynami-
cally changing, and expansive playing field, no organization can fully map all
relevant developments alone. Anticipatory leadership needs to be complemented
by strong external networks and collective sensing, often at industry levels and
well beyond.11 The aim is to develop a strategic radar that scans widely but also
selectively to avoid being overloaded.12
CALIFORNIA MANAGEMENT REVIEW 00(0)4
Designing the Change Approach
Leaders of vigilant organizations want to sustain their advantage while
their vulnerable rivals want to narrow the gap, or at least, avoid falling further
behind. The immediate challenge in deciding how to proceed is the sheer num-
ber of possible interventions advocated in the change management field,13 and
the daunting array of foresight methods14 available. A consistent lesson is that
pulling too many improvement levers at the same time in a haphazard way is
a recipe for confusion, dilution of effort, and eventual disappointment. There is
a pressing need for clear guidance on what works well, and when it works. To
meet this need and identify the best sequence of moves, we applied a path analy-
sis methodology15 to analyze the data from our survey of 118 global firms.
We found that leadership commitment to vigilance had a big effect on the
Vigilance Quotient (VQ) of an organization, defined as a distinctive ability to antici-
pate major shifts and spot opportunities ahead of rivals. The strong indirect effects
of leadership commitment were mostly transmitted through the “investments in
foresight” driver, which itself also had a very strong direct effect. The direct impact
of the other two drivers was muted because their variance was mostly absorbed by
the two primary drivers. We view these two drivers as playing a crucial support
role in well-run companies because a minimum threshold level of competence is
needed in strategy making, as well as for ensuring accountability and coordination.
Without these two drivers properly in place, organizational vigilance will be
severely hampered. For example, new insights from foresight methods would be
diminished if there is no outside-in strategy process that can accommodate ambig-
uous signals or envision diverse scenarios.16 And brilliant strategies are rendered
mute if there is no follow-up or implementation discipline.
Our statistical results revealed a clear path to follow when designing a
change initiative for vigilance. This overall guidance needs to be augmented by a
diagnosis of the specific areas most in need of improvement. A good departure
point for this diagnosis is for the leadership team to take our Vigilance Quotient
survey,17 and then to compile the “Hits and Misses” of the past five years (i.e., the
threats and opportunities that were either seen in time to act or were seen too
late). The goal of this audit should not be finger-pointing, but learning collectively
about persistent blind spots and past successes. Are there recurring patterns? Can
we surface the reasons for systemic vulnerability? When conducted properly—
with honesty, mutual trust, and respect—this deep dive can energize and unify
the leadership team as they traverse our roadmap to improving vigilance.
Roadmap to Becoming More Vigilant
The fulcrum of a vigilance improvement initiative rests on leadership clearly
and consistently demonstrating a deep commitment to vigilance and reinforcing
this commitment with high leverage investments in foresight. This improvement
process needs to be tailored to the situation of each firm, although the basic design
principles are constant. As Oscar Wilde said about history, “it may not repeat itself,
but it surely rhymes,” and the same holds for vigilance excellence.
Preparing Organizations for Greater Turbulence 5
The experience of Mastercard is instructive here.18 Prior to 2009, Mastercard
emphasized disciplined execution, meeting quarterly earnings targets, and catch-
ing up to arch-rival VISA. When Ajay Banga became CEO that year, after 13 years
with Citibank, he found an accomplished but somewhat laid-back organization
lacking a sense of urgency. Rather than launching another “burning platform”
about looming digital threats, Banga energized the organization by focusing on
untapped opportunities and a culture change toward vigilance.
When describing his approach, Banga highlighted several key aspects of
being a vigilant leader: Have the courage to take thoughtful risks. “Rarely are you
going to have perfect information. The thoughtful part depends on your humility
and realizing you don’t have all the answers.” Be paranoid at times. “Constantly ask
yourself if you’re missing something . . . you need a sense of self-introspection to
be a real leader.” Develop a global view. “Increase your connectivity to the world
around you . . . the key is to go beyond looking at the world through the lens of
your company . . . ” These principles underpinned Banga’s approach to leadership
and shaped the transformation of Mastercard into a more vigilant enterprise. It
also meant pivoting from being a credit card company to becoming a payment and
fintech organization, able to parry anticipated threats from competitors and grab-
bing a bigger slice of the market.
The topic of risk taking is deeply connected with that of vigilance since most
early warning signals of change will be weak, ambiguous, and disjointed unless
connected with other signs of what may lurk around the corner. As such, it is more
about anticipating uncertainties than computing risks since precise probabilities
will be hard to come by, and taking calculated risks may be premature when the
fog has not lifted enough.19 So, asking the right questions, having the courage to
pursue what may be dead ends, and systemically testing competing hypotheses
underpin vigilant leadership. The roadmap we present below is designed to result
in more refined questions, deeper market insights, and an organizational culture
eager to strategically explore a diverse set of threats and opportunities. Successfully
following this roadmap entails tolerance of failure, an oversized dose of curiosity,
and a desire to turn every setback into useful learning.
Driver 1: Demonstrate Strong Leadership Commitment
Vigilance is not the sole purview of the CEO. It must pervade the senior
leadership team to express the tone at the top and signal an openness to sens-
ing and acting on potentially relevant weak signals from inside and outside
the organization.20 Influential members of the C-Suite team need to be effec-
tive communicators throughout the organization, while also serving as credible
advisors to the CEO and Board. Importantly, each should be much more than an
advocate for the interests of their own function or group, but serve the vigilance
needs of the larger enterprise.
The improvement initiative starts with the leadership team collectively
pondering the four diagnostic questions italicized below. Their shared answers
will determine the extent and nature of subsequent actions and serve as evidence
of their serious commitment to the rest of the organization—and to themselves as
CALIFORNIA MANAGEMENT REVIEW 00(0)6
a unified team. For each question, there are well-tested answers that point the
way toward strengthening vigilance.
How much time do we spend exploring the future? Short termism is the number one
enemy of vigilance about long-term undercurrents. This point was reinforced by
the findings of the CEO Genome Project,21 which found that leaders who excel at
adapting to turbulent environments spend significantly more time—as much as
50%—thinking about the long term. This means looking well beyond one-year
budgets or three-year operating plans for a typical company, and far longer in
resource-intensive industries like mining, pharma, or renewables. Less-success-
ful chief executives devoted only 30% or less of their time to long-term think-
ing. The conclusion was that focusing on more distant futures makes CEOs more
likely to pick up earlier on weak signals, undercurrents, and inflection points.
The logic is that longer time horizons widen a leader’s aperture and enhance
their peripheral vision.
Do we seek diverse inputs and encourage curiosity? CEO Ajay Banga championed
diversity from the start at Mastercard by emphasizing that
leadership attributes are tremendously facilitated if you surround yourself with
people who don’t look like you, don’t talk like you, and don’t have the same
experiences as you. Diversity is essential because a group of similar people tend to
think in similar ways, reach similar conclusions, and have similar blind spots. To
guard against that, you need to harness the collective uniqueness of those around
you to widen your field of vision.22
Leaders can encourage vigilance by promoting “mavericks” and contrarians
from within who are demonstrably more vigilant and externally focused.23 This
common advice is easier to dispense than act on, however, due to cultural obstacles
and perhaps lack of trust or familiarity. Promoting divergent thinkers takes courage
and wisdom. It helps if leaders themselves also participate in diverse and unconven-
tional knowledge networks to expand their own worldview. This may be especially
challenging for operationally focused managers who tend to be more comfortable
within clearly defined and well-established industry settings. Familiar meetings,
however, risk becoming “echo chambers” where like-minded managers reaffirm
each other’s biases and convictions. Encouraging diverse views and networking
outside one’s comfort zone cultivates inquisitiveness at many levels. Once curiosity
is triggered, employees will think more deeply about weak signals and share their
concerns. Yet, research shows that most leaders largely suppress collective curiosity,
fearing it will reduce efficiency or raise doubts about the strategic direction.24
What are the stories about vigilance we tell around here? Examining organizational
narratives is a proven way to diagnose the mindsets shaping the beliefs within
a company.25 Narratives can be much more powerful than facts in getting atten-
tion and fueling either action or resistance. Comparing stories about successes
from seeing sooner or responding to unwelcome surprises will surface the val-
ues and beliefs that underpin vigilant behavior. When Alan Mulally was first
Preparing Organizations for Greater Turbulence 7
appointed CEO of Ford in 2006, he started his weekly leadership meetings by
asking the team about anomalies they had recently observed. This intervention
slowly changed the tone of the meetings by shifting the narrative from opera-
tional questions to promoting the kind of curiosity that is so vital to vigilance.26
Within vulnerable firms, we find that the prevailing narrative is often self-
defeating. We hear middle-level managers say, “there are no carrots when it
comes to sharing bad news, only sticks . . . we tend to shoot the messenger . . . we
just don’t have time to listen and reflect.” Another pernicious belief is, “I don’t
think they really want to hear this.” As one manager we have worked with rue-
fully reflected, “In our culture, only good news goes upward, so it doesn’t matter
if the CEO supports this, since concerns will be filtered out before she hears them.”
When the prevailing narrative is an impediment, try to answer the following
thought experiment with various teams: If our organization had to act out a nar-
rative about winning through vigilance, what behaviors would we expect to see?
What would a storyboard mapping out the way that we should ideally practice
vigilance look like?27
Narratives can also serve as handrails for leadership teams when the future
is especially unclear. Kay and King28 maintain that we can cope with high uncer-
tainty by organizing around “reference narratives,” which are clear stories that
are generally accepted throughout the organization. They cite the successful pub-
lic management of the COVID pandemic in Denmark, since the local population
trusts that its government will look after their health and economic well-being.
Such narratives of integrity and competence help ameliorate anxiety and build
consensus around difficult societal decisions.
Do we have a fully engaged board of directors? Too many talented boards mostly
review and approve management’s proposed strategy. The bulk of their meet-
ing time is spent on progress reports, compliance problems, and operating issues.
But boards should be leveraged more fully, given their wider networks, to spot
trends, weak signals, and vigilance practices in leading firms. They also bring a
longer time horizon than leadership teams incented to deliver short-run results.29
What many directors desire is more time in board meetings to help position the
organization for an uncertain future. Once engaged in being more vigilant, these
directors can become “scouts” who are actively listening.
With shareholder activism rising and corporate scandals still a serious risk,
many boards in the United States are moving away from reactive oversight to
genuinely leading.30 A compelling example is a leading children’s hospital facing
an increasingly uncertain future. The board members helped develop alternative
scenarios for the coming ten years. Together with the hospital’s leaders, they fore-
saw that the most daunting uncertainty would be the availability of outside
research support, broad insurance coverage, and charitable donations. Relatedly, it
mattered greatly whether the pace of scientific advances in genomics and personal-
ized medicine would evolve slowly or disruptively. Different assumptions about
these two uncertainties alone had profound implications for the need to acquire
new areas of practice and develop new capabilities. Because board members got
CALIFORNIA MANAGEMENT REVIEW 00(0)8
involved in constructing the multiple future scenarios, they helped the executive
team identify early warning signals and probe their deeper meaning.
Driver 2: Invest More in Foresight
A strong signal of leadership commitment to vigilance is putting signifi-
cant resources into surveillance, scanning, and other activities to improve fore-
sight. This will move the discussion from “operational concerns” and “current
performance” to looking for what may be coming over the horizon. But it may
require significant investments in new organizational structures and manage-
ment training to suffuse the overall enterprise with better sensing and interpre-
tive capabilities.
Create a foresight unit. Spotting weak signals should be everyone’s concern, but
often is no one’s responsibility. One solution is to create a central foresight unit,
or perhaps multiple distributed foresight teams, tasked with
•scouring the technical literature, patent filings, and news feeds for early
warning signals;
•sending out scouting teams to precursor markets or innovation hubs such as
Silicon Valley;
•engaging with venture teams to learn about new relevant investments;
•mobilizing “red teams” to role-play competitors’ moves; or
•conducting low-cost experiments to probe critical uncertainties and capture
the lessons.
Such foresight units have long been used in industry, from British
American Tobacco to Royal Dutch Shell, and are increasingly popular in Europe
and elsewhere, as documented by Rohrbeck and his colleagues.31 Importantly,
sensing can and must also be decentralized to cover the full terrain. Sensing does
not solely rest with staff and acting with leaders or vice versa. Instead, a practical
balance needs to be found that goes wide and deep depending on the nature of
the business, its strategy, design, and culture.32
When Ajay Banga challenged different groups to allocate budget and
energy to finding new opportunities, he sent a very strong message throughout
the Mastercard organization. In addition, he created Mastercard Labs and gave it
the mandate to generate disruptive services. The Labs reported directly to him,
which was a further sign of his strong commitment. The Labs operated as a central
hub responsible for nurturing a culture of innovation, generating and capturing
good ideas from inside or outside the firm. To stimulate broad and novel ideas, the
Labs organized events such as “Take Initiative,” a two-day hackathon for develop-
ing and testing ideas around a specific challenge. When such commitments are
made by top leaders, they set the right “tone at the top.”33
Mount a disciplined search for opportunities. Few firms are better at this than Intuit.34
When their leadership in 2010 first saw the possibilities of adapting personal-finance
Preparing Organizations for Greater Turbulence 9
solutions to mobile devices, there was resistance from managers who strongly felt
that there was no money to be made in mobile. To challenge this belief, Intuit
management found companies already making solid profits from mobile applica-
tions and assigned some of its own managers to interview their executives. These
contrarian interviews were then shared at an off-site. As Scott Cook, the founder
and Chairman of Intuit, recalled, “we didn’t have enough time in the meeting . . .
They wouldn’t stop talking. They were convincing each other there was money
to be made in mobile.” Today, with Intuit’s Turbo Tax mobile app, it is possible to
prepare and file a full 1040 from your phone.
In the same spirit, Walmart, the exemplar of a cumbersome established
retailer, has embraced a disciplined search with an incubator called Store No. 8
(named after an early store where founder Sam Walton conducted business
experiments).35 This incubator is tasked with imagining “new verticals, capabili-
ties, and existential threats” that Walmart might face in the next decade, so it can
develop strategies to stay ahead of competitors—especially Amazon. The busi-
nesses that are incubated will be run as start-ups, with Walmart investing in them
like a venture capitalist and then growing the group as a portfolio.
Engage partners in the ecosystem.36. Mastercard has adopted this approach in rec-
ognition that the best opportunities often lie at the intersections where market
spaces, technologies, and industries overlap. Thus, it worked with Maytag to
develop Clothespin, a wireless laundry equipment pay-per-use solution that con-
nects washers and dryers to smartphones and laundry equipment service provid-
ers. These uncommon partners drew on available technologies—smartphones,
online credit card payment systems, and devices connected through wireless
cloud communications—to devise a novel solution to make doing laundry away
from home easier. As partners become more networked over time, Mastercard
greatly expands its points of contact with the world outside. Other examples
are the micro-business enterprises that Zhang Ruimin, CEO of the fast-growing
Chinese company Haier, instituted to transition from a top-down kitchen appli-
ances manufacturer to a leading international smart home devices company. By
designing multisided platforms for its increasingly diverse businesses, Haier built
ecosystems and converted talented employees into entrepreneurs to achieve zero
distance between the firm and consumers.37
Vigilant firms can apply the insights from foresight inquiries by merging
two interlocking processes: upfront planning (often top-down) followed by learn-
ing from doing (usually bottom-up).38 The deliberate or intentional part is more
structured and builds on rigorous analyses in the strategy phase based on such
things as customer requirements, cost competitiveness, technology road maps,
and drivers of growth. This disciplined and analytical approach must be balanced,
however, with various emergent and opportunistic processes that entail much
experimentation over time. Whenever exploratory pilot tests succeed, they need
to be acted upon further, whereas the disappointments should be fully mined for
their learning opportunities. By embracing this yin and yang approach, vigilant
firms can scan the horizon for early signs of external change and free up resources
to explore more deeply so that signal and noise can be better separated.
CALIFORNIA MANAGEMENT REVIEW 00(0)10
Pursue anomalies. Emergent strategy processes are especially useful when they
allow for the surfacing of anomalies (awkward or surprising facts that don’t fit
received wisdom39) and then addressing them while the strategy is still being
formulated. Whereas vulnerable organizations tend to ignore information that
doesn’t fit conventional views, or convince themselves that it isn’t that important,
vigilant firms seek out anomalies as early warning signals. Intuit calls this approach
“savoring the surprise.”40 Once the leadership team saw that some users of their
online money management service Mint weren’t quite behaving the way the
young-professional target market was expected to, they dug deeper. They found
that many users did not fit the socioeconomic profile of the target group. Also,
some had adopted Mint to manage their self-employment income and spending,
including Uber or Lyft drivers operating in the expanding gig economy. Embrac-
ing this new market insight, Intuit quickly designed a variant of QuickBooks for
self-employed workers—which became its fastest-growing product.
Driver 3: Improve Strategic Making
Strategic planning processes vary greatly across companies, from informal
executive meetings to highly orchestrated formal planning systems that snake
their way through the organization over many months. Vigilant companies try
to adapt their strategic planning process to the level of turbulence surrounding
them as well as the level of stretch in their growth plans. A common starting
point for strategic thinking is SWOT analysis, which seeks to evaluate internal
Strengths and Weaknesses as well as external Opportunities and Threats. But this
familiar framework from the 1960s has inherent limitations and may do more
harm than good when uncertainty is high or if the current strategy is badly
wanting.41 Leaders should especially guard against these four common pitfalls.
•Navel-Gazing—Since SWOT analysis starts with identifying one’s own
strengths and weaknesses, it can degenerate into a laundry list of items rele-
vant to the past and present, but unhelpful for the future. Labeling something
a plus or minus requires some kind of reference point, and too often that will
be the current strategy or the firm’s most dominant rival. For instance, “excel-
lence in chemical emulsion photography” was always ranked as a strength for
Kodak until the digital imaging tsunami hit the industry. Due to this mind-
set and an unwillingness to enter a lower margin, disruptive electronics busi-
ness, Kodak was slow in embracing the new digital imaging paradigm, which
eventually led to its bankruptcy in 2012. By contrast, FujiFilm recognized
the eventual fate of the film development business sooner and leveraged its
expertise in film technologies to grow its flat panel display and medical imag-
ing businesses. In 2008, FujiFilm entered the cosmetics and drugs businesses.
Between 2001 and 2019, its sales rose from $B11.6 to $B22.0, while photo
imaging as a percent of total sales dropped from 53% to 11%.
•Captured by the Status Quo—The status quo trap can be even more insidious
when leaders get to the second part of SWOT, in which the company assesses
external opportunities and threats. The language of Opportunities and
Preparing Organizations for Greater Turbulence 11
Threats inadvertently forces participants to prejudge whether some external
change is positive or negative, with the current strategy again as the implied
reference point. It is far better to use neutral language by asking why some
external forces or issues might impact the current business and how. Any
external change could be good, bad, or even neutral, depending on how the
firm decides to respond.
•Inside-Out Myopia—In traditional planning sessions, internally focused topics
command most of the attention since everyone can relate to them and will
hold strong views. But heated discussions about the past and present may
run out the meeting clock without doing justice to the far more complex and
challenging world outside. To escape this trap, leaders should start the strat-
egy process by exploring how the world is changing around them and ask
why. Inside-out approaches start by asking, “How can we serve our current
customers better?” or “How can we leverage our current capabilities?” Both
are relevant questions, but they’re not the best ones to focus on first. Instead,
ask, “Why aren’t more customers buying from us?” or “In which ways do our
competitors offer superior products or have better business models?” or “How
will digital advances affect our supply chain?” These broader external ques-
tions force everyone to look at the company from the outside in.42
•Inadequate “Future-Back” Thinking—Another weakness of SWOT analysis may
be the reduction of complex strategy questions to lists of items that in isola-
tion are hard to assess. Systems thinking can help overcome this reduction-
ism by explicitly looking for connections among the many items surfaced and
thus encouraging more integrative or holistic perspectives. But even this may
not be enough in times of high turbulence.43 Strategic leaders also need to be
guided by strong future-oriented visions, as Elon Musk has done with elec-
tric cars and space travel. By reimagining how the entire marketplace, value
chain, and ecosystem can be configured, broader visions can emerge. This
means developing multiple scenarios about how the future might unfold, and
then discerning what flexible strategies can win no matter what the future
brings. Philips did this systematically when LED started to make serious in-
roads in its profitable and long-standing lighting business. Once its scenario
updates started to paint increasingly bleak pictures of low margins due to
new rivals, especially from Asia, its leaders decided to divest the lighting busi-
ness. Philips did this in stages, well before GE and Osram/Sylvania, on more
favorable terms.44
A similar approach was embraced by Mastercard as it focused its strategic
thinking on how to compete with cash. They found many people preferred cash
over credit cards because they had personal control. Others were forced by mer-
chants to use cash, and many people in developing economies simply didn’t have
bank accounts. But Mastercard also found that even the most reluctant adopters
of credit cards preferred a cashless solution in such areas as transportation and
meals, because handling cash was cumbersome. For example, when people need
to catch a train or grab a meal on the run, they want a quick payment process
CALIFORNIA MANAGEMENT REVIEW 00(0)12
rather than having to wait in line while others look for the right cash amount in
their wallet or purse. For Mastercard, this deeper insight led to a partnership with
Transport for London that resulted in a contactless payment solution, allowing
travelers to skip the queues for the tube or bus.
Leaders might also consider emerging foresight approaches such as Causal
Layered Analysis (CLA), which seeks to better connect the past, present, and
future.45 CLA surfaces the roles that subjectivity, interpretation, and cultural
context play in how leaders approach foresight and strategy. It distinguishes
between short-, medium-, and long-term futures and uses a complementary
framework that further differentiates between “Possible, Probable, and Preferable”
scenarios.46 These interdisciplinary approaches allow room for diverse ways of
knowing, multiple value systems, and deep differences in worldviews.47 One case
study, for instance, used these models to examine the impacts that the Internet
of Things (IoT) might have on the future of health care in Finland.48
The authors first examined the standard four layers of CLA, starting with
the surface features. This layer is called “Litany” and captures the problem in
terms of current perceptions and concerns, with empirical backups as needed.
Next, the deeper causes of these surface features or symptoms are examined in
terms of “Systemic/Social Causes.” At level three, known as “Worldviews,” deeper
causes and developments related to the underlying worldviews and societal dis-
courses were examined. Finally, the deepest roots of the problem perceptions
were probed in terms of “Myths and Metaphors,” which typically results in fram-
ing the problem in more artistic or poetic language. This approach can serve as a
preamble to scenario planning by discussing the following questions within the
strategy team.49
•What is the history of the issue?
•What is your forecast if current trends continue?
•What are the critical assumptions you used in your forecast?
•What are some alternative futures based on different assumptions?
•Which of these alternative futures would be your preferred one?
•Which strategies can be used in order to realize your preferred future?
•What is a new narrative or metaphor that would support your preferred
future?
Driver 4: Improve Coordination and Accountability
Getting alignment on the strategic moves that are possible, and agreement
on what has to be done to improve vigilance, requires an action agenda that puts
multiple organizational pieces in place. The key is to ensure that diverse partici-
pants beyond the leadership team engage with the strategy and help coordinate
the implementation of the various elements of the strategic plan. Tighter align-
ment is often needed within levels and functions as well as across them, with
the latter especially requiring broad buy-in throughout the organization. There
Preparing Organizations for Greater Turbulence 13
may be pushback and obstacles to overcome, such as “We are doing this already
. . . we barely have time to do our day jobs and just don’t have the extra capac-
ity.” The case for vigilance can be made by revisiting past surprises that should
have been caught earlier, assessing the cost and waste from being forced to react
late, or the damage sustained by overlooking or suppressing internal threats.
The long-run damage to Volkswagen from its ill-fated defeat-device debacle,
or Danske Bank’s willful blindness to billions of suspicious euro transfers from
Russia, are telling examples with lessons for all.
Any inability to align stakeholders around vigilance implementation efforts
takes a heavy toll on leader effectiveness, as the coronavirus showed amply in
Italy, the United Kingdom, and the United States. Efficiency, productivity, and
team spirit are drained when needed most. Effective organizational interventions
require a human touch that connects the change process with people’s interests
and their natural desires to work effectively in teams. Here are some proven
approaches:
Communicate your intent early, often, and simply. Leaders can get so enam-
ored by their own strategic agendas that they fail to realize that what is clear to
them may be fuzzy to others. Without an abundance of clear communication
about where you are going and why, team members may default to behaviors
that inadvertently undermine the strategic intent.50
Reach out to all those who have a stake in your direction. It was easier for lead-
ers of “command and control organizations” to line up the troops and send them
marching. But many organizations have moved away from hierarchical struc-
tures with clear lines of authority to horizontal networks where decision making
is more diffuse. Such organizations should especially try to include all those who
can make a significant contribution to building vigilance capability.51
Promote open dialogue and true debate. One of the oldest axioms in leading
change is to approach resistance rather than to ignore or fight it.52 Yet too often
we fail to even surface, let alone fully understand, why people see things dif-
ferently and may not be on board. This failure readily occurs when people have
their heads down and are focused on immediate demands. And yes, it is messy
and often awkward to surface and deal with conflicting views. Yet, leaders pay
a heavy price when they don’t attend to differences up front. It takes courage to
face conflict, tease out diverse expectations, and manage differences.
Reward those who truly take ownership. Strategic change can only be achieved
when people own the solutions in their guts and not just their heads.53 What we
may think is “buy-in” is perhaps superficial agreement or may get lost in trans-
lation. A common barrier to vigilance deep inside the organization is the silent
middle that remains unconvinced or confused about what is expected. Typical
complaints that leaders may have to overcome include “this will cause a flood
of false signals that will clog everything . . . the money would be better spent on
CALIFORNIA MANAGEMENT REVIEW 00(0)14
getting our new product to market faster . . . marketing and R&D will be upset
their role is being taken out of their hands.” Such objections reflect a mindset
that activities and initiatives should have a clear and calculable near-term payoff
and follow the standard organizational pathway. They also implicitly assume that
attending to the ordinary course of business matters more than investing in the
future.
A recurring theme of successful alignment initiatives is about the efficacy
of small, empowered teams. At Intuit, new ideas are initially developed by small
“discovery teams” that don’t report up the chain of command but instead have a
direct line to the divisional general manager. Such small teams are especially well
suited to enhancing vigilance. Recently, 70 Intuit senior managers were grouped
into small teams and asked to investigate eight major trends that had surfaced
either in customer interactions or diverse technology forums (such as “how kids
under 10 years of age use technology,” “conversational user interfaces,” and
“blockchains”). Their reports sparked 15 additional topics, all of which were fur-
ther investigated.
Most organizational transformations aimed at heightened vigilance may
have to include structural separation as well.54 This allows exploration and exploi-
tation activities to occur in newly created units that adopt their own procedures,
with different reporting rules and incentives as needed. By putting novel activities
together in a single unit with a supportive team that relies less on hierarchy and
more on behavioral integration, better alignment can be achieved. This approach
should be considered whenever the capabilities needed for greater vigilance are in
conflict with the current business model or operational demands.
This final driver in the vigilance agenda supports the three earlier drivers
and often operates in parallel with them. Close collaboration and clear communi-
cations are vital to seeing sooner and acting faster. It is critical that the leadership
team approaches vigilance as a team sport played for the long-run benefit of the
enterprise. Agilent Technologies’ CEO Mike McMullen did this, for example, by
convening his top 80 leaders to assess their organization’s vigilance in the life sci-
ences, diagnostics, and clinical labs domains. Using our vigilance survey plus their
own case examples, McMullen followed this up with training deeper in the orga-
nization, with cross-functional teams examining the main drivers of vigilance
across multiple business challenges. These teams made practical suggestions to
senior leaders about how to improve Agilent’s overall vigilance quotient, with
further operational refinements still underway.
Summary
Proclaiming an intention to become a more vigilant and better-prepared
organization may be a sensible aspiration, but it says little about how people
should act or what they should be doing differently. Realizing this lofty aspira-
tion starts with a robust and clear commitment by the leadership team to take
the long view and stimulate vigilance throughout the organization.
Preparing Organizations for Greater Turbulence 15
Two further conditions must be satisfied as well. One is sustained motiva-
tion, provided by the prospect of better performance results and a reduction of
costly business disruptions from failures in seeing around the corner. The second
condition necessary for sustained success in vigilance building is to communicate
a clear set of plans and sequence of actions that collectively will increase the orga-
nization’s ability to see sooner and act faster. Our article laid out how leadership
teams can credibly demonstrate their commitment to vigilance, and what it takes
to implement a successful improvement initiative company-wide. Some of the
specific actions we discussed are summarized in Table 1.
Our framework for the improvement process was guided by our conceptual
model of the primary drivers of vigilance, as based on best practice studies, consult-
ing projects, prior research, and extensive empirical testing. This model hinges on
strong leadership commitment, followed by targeted investments in foresight,
changes in the strategy-making process, and then ensuring coordination and
Table 1. Summary of Guidance to Leaders.
Show strong leadership commitment to vigilance
• Express curiosity and encourage openness to weak signals (.44) [24]
• Encourage taking the long view and spend time exploring the future (.50) [21]
• Give a voice to mavericks and then have the courage to promote some (.40) [23]
• Join diverse or unconventional knowledge networks to lead by example (.48)
• Listen for narratives and shape them toward an emphasis on the future [25, 27]
• Leverage the rich networks and seasoned insights of Board members [29, 30]
Strengthen your organization’s foresight capabilities
• Audit your past performance; what was missed and why?
• Launch targeted search parties to explore ambiguous areas
• Use foresight units judiciously to collect and share weak signals [31]
• Engage regularly with ecosystem partners to scan more widely (.50) [36]
• Encourage the broad sharing and exploration of anomalies (.43) [34]
• Invest in a disciplined search for threats and opportunities [5]
Improve the strategy-making process
• Start the strategy process from the outside (.1) [10]
• Give full regard to uncertainty and ambiguity (.21) [28]
• Generate guiding questions to focus the team’s limited attention
• Challenge status quo thinking; explore multiple scenarios (.45)
• Use role playing of rivals to counter myopia
• Practice future thinking in reverse through back-casting [43]
Enhance coordination and accountability
• Communicate early, often, and with great clarity [50]
• Connect with all stakeholders who need to be on board (.43)
• Promote deep dialog, trust, and inclusion of those who resist [53]
• Share information laterally across functional boundaries (.38)
• Rely less on hierarchy and more on informal social feedback (.49)
• Formulate suitable incentives for timely joint action (.35)
Note: Where available, correlations with vigilance capability are noted with decimal points in rounded brackets,
based on our own survey questions; supporting literature citations are noted in square brackets that corre-
spond directly with our endnote numbers.
CALIFORNIA MANAGEMENT REVIEW 00(0)16
accountability. The practical roadmap for organizations we describe in this article
can be readily tailored to the capabilities and needs of any specific organization.
With turbulence mounting in most industries and global markets, the rewards
from being better prepared for the surprises coming around the corner will more
than justify the effort and the costs.
Appendix A
About the Research
We tested our vigilance model with survey data from a nonsystematic
sample of 118 senior leaders (mostly C-Suite and those reporting to them). The
average size of the companies was 22,400 employees with a median size of 1,700
employees. Only one executive, screened for seniority and knowledge of the
firm, was asked to complete the survey for his or her company.
Our survey was composed of 29 seven-point scales plus demographic ques-
tions to capture multiple facets of the four drivers in relation to our dependent
variable, the firm’s Vigilance Quotient (VQ). This VQ variable was based on an
equally weighted combination of three variables: relative ability to spot opportu-
nities outside the firm; detection of fundamental shifts in the industry; and ability
to anticipate market shifts ahead of rivals. The four independent variables we
tested were likewise composites of the survey items and yielded the regression
results we reported in the introduction.
In addition, we used path analysis to test our subsequent hypothesis that
“leadership commitment” would have a direct effect on VQ and indirect effects
transmitted through the other three drivers. Path analysis is a standard estimation
methodology for revealing the underlying structure within a data set in order to
identify the contribution of each driver to the overall fit of a hypothesized model,
especially in the presence of high intercorrelations among the variables.
Whereas multiple regressions can assess the relative importance of inde-
pendent variables on their own, path analysis can test how much they impact
each other, thereby controlling better for possible correlational distortions. The
highly significant results we found were not influenced by the various control
variables we also included, such as the size of the firm or its level of environmen-
tal turbulence. The data revealed a manageable degree of ecological correlation
among the variables that obscured the role of drivers 3 and 4 in the multivariate
analyses. Consequently, the bivariate correlations (r) with VQ yielded a some-
what different picture of the strengths of the relationships; for Driver One r = .61,
for Driver Two r = .57, for Driver Three r = .55, and for Driver Four r = .53. Their
relative orderings match our regression results.
Appendix B
Further Perspectives on Vigilance
Our concept of organizational vigilance extends previous research on situ-
ational awareness (originating with the military), cognitive studies of decision
Preparing Organizations for Greater Turbulence 17
biases, and organizational foresight, including scenario thinking. We also build
on our earlier work on peripheral vision, which is about the early detection and
interpretation of weak signals in the environment.
There is a close affinity between vigilance and the dynamic capabilities
framework, as both address how a company can build and tailor special organiza-
tional competencies that support strategic innovation and timely adaptation to
turbulence. The dynamic capabilities literature broadly covers how to sense
opportunities and threats that are still in the future, to seize opportunities while
parrying threats, and how to transform and renew the organization to be better
positioned for the future.55
The terrain covered by other approaches relevant to vigilance building and
dynamic capabilities is large. The matrix in Figure 1 provides a conceptual over-
view. The horizontal dimension reflects whether an emerging issue is viewed as a
looming threat or a potential opportunity, whereas the vertical dimension
addresses whether the origin of the issue resides mostly within the firm or exter-
nally. The cell at the top left, for example, covers economic recessions, disruptive
technologies, new entrants, supply disruptions, bad media coverage, regulatory
changes, patent disputes, or adverse consumer shifts. The top right includes new
distribution channels, emerging technologies, ecosystem enhancements, lower
costs of capital, latent consumer needs, new acquisition options, and emerging
markets. The bottom right covers newly discovered talent internally, improve-
ments in operations, better HR practices, development of new IP, cultural improve-
ments, innovation tournaments, better governance, and new compensation
plans. Last, the bottom left cell includes abuse of power, discrimination, fraud,
Figure 1. Foundations of vigilance.
CALIFORNIA MANAGEMENT REVIEW 00(0)18
espionage, kickbacks, cyber risks, safety violations, rogue operators, or any other
festering internal problems.
The breadth and variety of topics that leaders need to track requires both
general vigilance approaches that span the matrix cells, as well as solutions tai-
lored to specific problem types. The inner circle of the matrix highlights approaches
that are relevant to all four cells. In addition, each cell profiles two approaches
that are tailored to the cell’s domain. The boundaries of the four cells are not air-
tight, however, and the list of approaches above is by no means exhaustive. A
benefit of superior vigilance is that whenever a threat is seen sooner, it can become
a potential opportunity if acted on better than rivals. Also, a threat or opportunity
taking shape externally can, if detected early, move from the top row of the matrix
to one of the cells below. Both general and specific capabilities need to be part of
the vigilance toolbox.
To help readers appreciate the range of solutions available to enhance vigi-
lance, we offer brief definitions of the methods listed in Figure 1.
Spanning approaches that can be applied to any cell include:
•Foresight, which is about “identifying, observing and interpreting factors that
induce change,” (and) determining and triggering organizational responses.56
•Peripheral Vision is the organizational ability to quickly spot weak signals
that are relevant, explore them further, filter out the noise and take timely
action.57
•Resilience/Agility refers to both organizational and leadership strengths,
employee perseverance, and their collaborative recovery when encountering
adversity.58
•Adaptiveness is the organizational ability to recognize and act on what matters
most in an effective and timely way.59
The specific approaches within the four cells are illustrations of where
these perspectives fit best given their actual use in practice, but some may also be
useful in other cells:
•Organizational Jolts research examines how discontinuities at an industry
level—such as changes in regulation or technologies—can affect organiza-
tional learning, adaptation, and performance.60
•Predictable Surprises are disasters that leaders and organizations should have
seen coming (such as the 9-11 terrorist attacks or COVID-19) and from
which they need to recover as well as learn how to do better the next time
around.61
•Latent Needs are presently unmet needs expressed as problems to be solved or
frustrations to be eliminated (and might become potential opportunities).62
Preparing Organizations for Greater Turbulence 19
•Design Thinking uses creative problem solving to develop new products, ser-
vices, and internal processes. The focus is on human needs, team cultures,
and design options.63
•Cognitive Myopia refers to the inability of managers to properly reframe chal-
lenges, which can create obstacles for leaders when trying to sense, seize, and
improve organizational opportunities.64
•Mindfulness in organizations concerns the collective ability to notice relevant
details of emerging threats or opportunities, share key information and then
respond in a timely manner.65 Charles Perrow’s classic book Normal Accidents
about the Three Mile Island nuclear accident examines the high price of low
mindfulness, especially in complex technological systems.66
•Threat Rigidity refers to the paradoxical finding that some organizations can
become frozen in the face of grave threats to their business, or even existen-
tial crises, by continuing to reinforce habitual practices as though things were
normal.67
•Willful Blindness means turning a blind eye to impending failures, potential
problems, or even criminality in order to feel safe, avoid conflict, and protect
positions.68
These further perspectives can help leadership teams improve how they
manage important emerging organizational issues, either by developing deeper
self-insights or by deploying problem-specific tools, methods, and/or concepts.
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the
research, authorship, and/or publication of this article.
Funding
The author(s) received no financial support for the research, authorship, and/or
publication of this article.
Author Biographies
Paul J. H. Schoemaker is the author of 12 books and more than a hundred arti-
cles on strategic management and decision making. For over a decade, he served
as faculty at the University of Chicago and thereafter at The Wharton School. He
founded multiple companies (email: Paul@paulschoemaker.com).
George S. Day is the Geoffrey T. Boisi Emeritus Professor at The Wharton School
where he cofounded the Mack Institute for Innovation Management. He is
the author of 19 books on strategy, marketing, and management, and former
chairman of the American Marketing Association and executive director of the
Marketing Science Institute (email: Dayg@wharton.upenn.edu).
CALIFORNIA MANAGEMENT REVIEW 00(0)20
Notes
1. According to P. F. Drucker, Managing in Turbulent Times (New York, NY: Harper & Row, 1980),
p. 2. “Turbulence, by definition, is irregular, non-linear, erratic. But its underlying causes can
be analyzed, predicted, managed.”
2. The Latin root vigilans highlights one type of vigilance, being aware and watchful. We
broaden the meaning to include looking for weak and possibly unexpected signals of threats
and future opportunities. An early advocate of vigilance was A. S. Grove, Only the Paranoid
Survive: How to Exploit the Crisis Points That Challenge Every Company (New York, NY: Currency,
1999), who urged the entire organization to be attentive to subtle, but significant signs of
change.
3. R. Rohrbeck and M. E. Kum, “Corporate Foresight and Its Impact on Firm Performance: A
Longitudinal Analysis,” Technological Forecasting and Social Change, 129 (April 2018): 105-116.
4. G. S. Day and P. J. H. Schoemaker, “Scanning the Periphery,” Harvard Business Review, 83/11
(November 2005): 135-148; G. S. Day and P. J. H. Schoemaker, Peripheral Vision: Detecting
the Weak Signals that Will Make or Break Your Company (Boston, MA: Harvard Business School
Press, 2006).
5. A. Paliokaitė and N. Pačėsa, “Relationship Between Organizational Foresight and
Organisational Ambidexterity,” Technological Forecasting & Social Change, 101 (December
2015): 165-181. The value of vigilance for innovation is shown in: R. Katila and G. Ahuja,
“Something Old, Something New: A Longitudinal Study of Search Behavior and New
Product Introduction,” Academy of Management Journal, 45/6 (December 2002): 1183-1194;
N. Roberts and V. Grover, “Investigating Firm’s Customer Agility and Firm Performance: The
Importance of Aligning Sense and Respond Capabilities,” Journal of Business Research, 65/5
(May 2012): 579-585.
6. The set of specific dynamic subcapabilities that enable superior sensing include generative
sensing, sensemaking, use of scenarios, and the purchase of real options as discussed in G.
S. Day and P. J. H. Schoemaker, “Adapting to Fast-Changing Markets and Technologies,”
California Management Review, 58/4 (Summer 2016): 59-77. See, also, D. J. Teece, M. Peterat,
and S. Leih, “Dynamic Capabilities and Organizational Agility: Risk, Uncertainty, and
Strategy in the Innovation Economy,” California Management Review, 58/4 (Summer 2016):
13-35; K. E. Weick, Sensemaking in Organizations (Thousand Oaks, CA: Sage, 1995).
7. Representative sources relevant to organizational vigilance and the diversity of theo-
retical perspectives include J. Birkinshaw, A. Zimmerman, and S. Raisch, “How Do Firms
Adapt to Discontinuous Change? Bridging the Dynamic Capabilities and Ambidexterity
Perspectives,” California Management Review, 58/4 (Summer 2016): 36-58; G. S. Day, and
P. J. H. Schoemaker, “Are You a ‘Vigilant Leader’?” MIT Sloan Management Review, 49/3
(Spring 2008): 43-51; D. Levinthal and C. Rerup, “Crossing an Apparent Chasm: Bridging
Mindful and Less Mindful Perspectives on Organizational Learning,” Organization Science,
17/4 (July/August 2006): 502-513; K. Weick and K. Sutcliffe, Managing the Unexpected (San
Francisco, CA: Jossey-Bass, 2001). Scholarship on adaptive capabilities is also highly per-
tinent. For example, see D. J. Teece, “Explicating Dynamic Capabilities: The Nature and
Microfoundations of (Sustainable) Enterprise Performance,” Strategic Management Journal,
28/13 (December 2007): 1319-1350: C. O’Reilly and M. Tushman, Lead and Disrupt: How to
Solve the Innovators Dilemma (Stanford, CA: Stanford University Press, 2016).
8. P. J. H. Schoemaker and G. S. Day, “Determinants of Organizational Vigilance: Leadership,
Foresight, and Adaptation in Three Sectors,” Futures & Foresight Science, 2/1 (March 2020):
1-16.
9. The four drivers are described in G. S. Day and P. J. H. Schoemaker, See Sooner, Act Faster: How
Vigilant Leaders Thrive in an Era of Digital Disruption (Cambridge, MA: MIT Press, 2019). The
details of the data collection methodology, the survey instrument, and the linear multiple
regression models are found in P. J. H. Schoemaker and G. S. Day (2020), op. cit. The main
purpose of the latter article was to assess the robustness of the model across three diverse
sectors of global firms, credit unions, and foundations.
10. Brian Leavy, “Mark Johnson: ‘Future-Back’ Strategizing for Beyond-the-Core-Growth,”
Strategy & Leadership, 48/5 (June 2020): 9-17.
11. P. J. H. Schoemaker, “Managing Systemic Industry Risk: The Need for Collective Leadership,”
in The Future of Risk Management, ed. H. Kunreuther, R. J. Meyer, and E.O. Michel-Kerjan
(Philadelphia, PA: University of Pennsylvania Press, 2019), pp 149-170.
Preparing Organizations for Greater Turbulence 21
12. Paul J. H. Schoemaker, George S. Day, and Scott A. Snyder, “Integrating Organizational
Networks, Weak Signals, Strategic Radars and Scenario Planning,” Technological Forecasting &
Social Change, 80/4 (May 2013): 815-824.
13. D. Rosenbaum, E. More, and P. Steane, “Planned Organisational Change Management:
Forward to the Past? An Exploratory Literature Review,” Journal of Organizational Change
Management, 31/2 (2018): 286-303.
14. A. Magruk, “Innovative Classification of Technology Foresight Methods,” Technological and
Economic Development of Economy, 17/4 (2011): 700-716.
15. Path analysis was used to sort out the collinearity patterns among the (predictor) attributes
serving as independent variables to reveal the underlying structure and evaluate the contri-
bution of each path to the overall fit of the hypothesized model to the data. See T. Raykov,
“Scale Construction and Development Using Latent Variable Modeling,” in Handbook of
Structural Equation Modeling, ed. R. Hoyle (New York, NY: Guildford Press, 2012), pp. 472-498.
16. M. Yrjölä, H. Kuusela, K. Neilimo, and H. Saarijärvi, “Inside-Out and Outside-In Mental
Models: A Top Executive Perspective,” European Business Review, 30/5 (2018): 529-553.
17. This survey can be found in the Appendix of our book, Day and Schoemaker, See Sooner, Act
Faster (2019), op. cit.
18. Sources on the Mastercard transformation are Antoine Duvauchelle, N. Furr, and A. Shipilor,
“How Does Digital Transformation Happen? The Mastercard Case,” INSEAD Case Center
#318-0049-1, 2018, https://store.hbr.org/product/how-does-digital-transformation-happen-
the-mastercard-case/IN1463; “Mastercard: The Best Kept Platform Secret,” Harvard Business
School Digital Initiative, March 5, 2018, https://digital.hbs.edu/platform-digit/submission/
mastercard-the-best-kept-platform-secret/; A. Salzman, “Why Mastercard Hasn’t Been
Disrupted,” Barrons, October 31, 2017, https://www.barrons.com/articles/why-mastercard-
hasnt-been-disrupted-1509478859; Ajay Banja, “Mastercard CEO Ajay Banja’s Six Lessons
on Leadership,” Quartz India, April 8, 2018, https://qz.com/india/377104/ajay-bangas-six-
lessons-on-leadership-as-told-to-the-iim-a-class-of-2015/; “Mastercard’s Ajay Banga: Why
‘Yes If’ Is More Powerful than Saying No,” Knowledge@Wharton, July 24, 2014, https://
knowledge.wharton.upenn.edu/article/mastercard-competitive-strategy/.
19. P. Kleindorfer, H. Kunreuther, and P. J. H. Schoemaker, Decision Sciences: An Integrative
Perspective (Cambridge: Cambridge University Press, 1993), p. 470.
20. H. H. Friedman, D. Fischer, and S. Schochet, “Humility and Tone at the Top,” International
Leadership Journal, 9/2 (2017): 54-79; E. Sadler-Smith, G. Robinson, V. Akstinaite, and
T. Wray, “Hubristic Leadership: Understanding the Hazard and Mitigating the Risks,”
Organizational Dynamics, 48/1 (April 2019): 8-18.
21. E. Botelho, K. Powell, S. Kincaid, and D. Wang, “What Sets Successful CEOs Apart,” Harvard
Business Review, 95/3 (May/June 2017): 70-77. The CEO Genome project’s research was
assembled over ten years and comprises a database of assessments of seventeen thousand
C-suite executives.
22. Banga, “Mastercard CEO Ajay Banga’s Six Lessons on Leadership.”
23. See W. Taylor and P. G. LaBarre, Mavericks at Work: The Most Originals Minds in Business Win
(New York, NY: William Morrow, 2006).
24. F. Gino, “The Business Case for Curiosity,” Harvard Business Review, 96/5 (September/October
2018): 48-57.
25. For insights into how narratives provide a generative memory that enables people to trans-
late behavior from the past to inform their efforts, see C. A. Bartel and R. Garud, “The Role
of Narratives in Sustaining Organizational Innovation,” Organization Sciences, 20/1 (January/
February 2009): 107-117.
26. S. M. Caldicott, “Why Ford’s Alan Mulally Is an Innovation CEO for the Record Books,”
Forbes, June 25, 2014, https://www.forbes.com/sites/sarahcaldicott/2014/06/25/why-fords
-alan-mulally-is-an-innovation-ceo-for-the-record-books/?sh=492328877c04.
27. The process used to extract these kinds of narratives is described in G. S. Day and G. P. Shea,
“Grow Faster by Changing Your Innovation Narrative,” MIT Sloan Management Review, 60/2
(Winter 2019): 1-9.
28. J. Kay and M. King, Radical Uncertainty: Decision-Making Beyond the Numbers (New York, NY:
W.W Norton, 2020). This theme has also been developed by R. Shiller, Narrative Economics:
How Stories Go Viral and Drive Major Economic Events (Princeton, NJ: Princeton University Press,
2019).
CALIFORNIA MANAGEMENT REVIEW 00(0)22
29. H. Zhu, W. Pengji, and C. Bart. “Board Processes, Board Strategic Involvement, and
Organizational Performance in For-profit and Non-profit Organizations,” Journal of Business
Ethics, 136/2 (June 2016): 311-328.
30. R. Charan, D. Carey, and M. Useem, Boards That Lead: When to Take Charge, When to Partner,
and When to Stay Out of the Way (Cambridge, MA: Harvard Business Review Press, 2013).
31. Rohrbeck and Kum, op. cit. Also, the European Union has just launched a new foresight
commission: https://ec.europa.eu/info/strategy/priorities-2019-2024/new-push-european
-democracy/strategic-foresight_de.
32. J. Calof, D. Meissner, and A. Razheva, “Overcoming Open Innovation Challenges: A
Contribution from Foresight and Foresight Networks,” Technology Analysis & Strategic
Management, 30/6 (June 2018): 718-733.
33. See D. Sull, “Managing by Commitments,” Harvard Business Review, 81/6 (June 2003): 53-60.
His emphasis is on commitments that restrict a company’s future actions. This perspective is
also found in P. Ghemawat, Commitment: The Dynamic of Strategy (New York, NY: Free Press,
1991), which emphasizes that commitments to developing capabilities superior to those of
competitors are often very costly and hard to reverse.
34. G. Colvin, “How Intuit Reinvents Itself,” Fortune, November 1, 2017, pp. 77-82.
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