11-04-2025
Strategic Resilience And Agility: 4 Essentials To Thrive In A BANI World
VUCA vs BANI a new acronym to describe the world infographic template with icons have 4 steps such ... More as volatility (brittle), uncertainty (anxious), complexity (non-linear), ambiguity (incomprehnsible).
Strategy has always been challenging, even during times of greater stability and predictability. Yet, plenty has been written about strategic contexts as increasingly VUCA (volatile, uncertain, complex, ambiguous) and BANI (brittle, anxious, nonlinear, incomprehensible), making strategy ever more challenging. As Forbes contributor Kevin Kruse describes, 'the systems, structures, and supply chains we depend on are shockingly fragile. The world isn't just volatile; it's brittle, like an old dried bone. It appears strong but one crack and it shatters.' This fragility has been evident in the recent global trade wars initiated by President Trump. Whether it's COVID-19, Trump's trade wars, or the next unforeseen disruption, there is a renewed emphasis on the need for strategic resilience and agility with four essential foundations.
Perhaps the biggest mistake in strategy is not attending to the nature of the risk embedded within it. For example, companies and sectors worldwide have been caught off guard by the trade wars, assuming more certainty about trade than is warranted. Many nations had trade agreements with the United States that were not upheld. What has become apparent is that it is not just trade agreements that are vulnerable but the rule of law itself, as noted by William Roberts, an American correspondent for the International Bar Association, in November 2024. Mechanisms intended to provide checks and balances on a system are not functioning reliably. With 'Trump's tariffs tipping the US economy perilously close to a recession,' as noted by Forbes writer Derek Saul, it is stunning to witness the inability of companies, consumers, politicians, bureaucrats, and a range of stakeholders to influence decisions. Because the trade wars have revealed that just a few individuals can amplify VUCA and BANI, strategy can no longer ignore such risks. Although the COVID-19 pandemic revealed that such amplification existed in systems more generally, it was often termed a 'black swan' event, capturing that the event was rare and hard to predict but had a significant impact. While these events may be hard to predict, they are no longer rare. The key lesson is that strategy must be resilient to shocks, and organizations need to be agile to adapt.
One practical way to ensure you don't underestimate risks is to entertain the perfect storm of catastrophic events that could undermine your strategy. This isn't just a matter of listing the risks. It entails using the principles of systems thinking to understand the interconnected nature of those risks. Such an exercise is best done in groups, with the aim to challenge blind spots and entertain the possibilities, as unlikely as they may seem. In a strategy workshop I conducted one week before COVID-19 hit, the organization recognized the potential threat of a global pandemic and realized it had not addressed the risk in its strategy. Unfortunately, the pandemic hit faster than it had time to prepare for a response. Although you can and should cultivate awareness of risks and opportunities, the complexity, uncertainty, non-linearity, and the potential incomprehensible nature of contexts necessitates ongoing awareness by everyone, not just a select few, or in select moments, and it means accepting that contexts are not entirely controllable or knowable. This also means having the strategic clarity to know what, how, and when you can pivot while fostering the organizational learning and agility to pivot.
To have a resilient strategy, organizations need first to understand it. For the last 25 years, my Executive MBA Strategy classes have been tasked with identifying the strategy of their business unit or organization, with a basic framing to determine the coherence of four strategy components: goals (metrics by which they measure year-over-year success), value proposition, portfolio of products/services and markets, and the core activities that support them. In most cases, executives struggle to identify the strategy components, and once they do, they often begin to see the lack of coherence in the strategy. The second part of the assignment is to assess the weakest link between the strategy and one of the following: environment (what they need to do), resources, organization (what they can do), or management preferences (what they want to do). Although the strategy components may be coherent, the organization may not have the resources or capabilities to deliver on it, or the strategy may fall short of what it needs to do given the environment, or there can be tensions between the strategy and what management wants to do. This last area of tension is often ignored, but at the organization's peril, as my colleagues and I describe in our Strategic Analysis and Action book. Strategy is ultimately a human endeavor that relies on people to construct and enact it. If they are not on board with the strategic direction or don't understand it, strategic agility will suffer.
For example, when Trump launched the trade wars, organizations needed to know their pivoting options, which meant fully understanding their strategy, the strategic choices they had made and why, and the pivoting options. Events like COVID-19 or the trade wars are undeniable and grab attention. An equal challenge is the ongoing opportunity to read weaker signals of threat and opportunity that can impact strategy. The classic case of Blockbuster turning down the acquisition of Netflix, which in hindsight was devastating, but at the time seemed insignificant. As former Forbes contributor Greg Satell described, 'Netflix proved to be a disruptive innovation because Blockbuster would have to alter its business model—and damage its profitability—to compete with the startup. Despite being a small, niche service at the time, it had the potential to upend Blockbuster's well oiled machine.' Cultivating a resilient strategy that is dynamically responsive to a shifting environment is easier said than done because it is based on the individual and organizational capacity for learning, which is perhaps the least understood and developed.
When I started my doctoral studies in strategy in the mid-'80s, I was perplexed that strategy didn't seem to be rocket science, but organizations seemed to do it so poorly. I soon discovered that the major shortcoming was their capacity to learn. I devoted the next twenty-five years to understanding organizational learning and strategic agility but missed the critical underpinning of individual character. It wasn't until my colleagues, and I identified the essential role of leader character (or lack thereof) in explaining the 2008 Global Financial Crisis, that I turned my attention to understanding what character is, how it can be developed and embedded in organizations as described in the two books I co-authored, Developing Leadership Character, and The Character Compass. Subsequently, along with several co-authors, we examined how leader character shapes organizational learning at the individual, group, and organization levels and the dynamic feedforward and feedback flows between the levels, as shown in Table 1. In my Forbes article 'The Crisis of Leadership Character," which I followed up with 'From Good to Great: 10 Ways to Elevate Your Character Quotient,' I describe the interconnected nature of character and how it can operate in strong, unbalanced, and weak states. Linking the three states with the levels and flows of organizational learning produces a set of behaviors that reveal why organizations struggle with agility and resilience. Although organizations want the behaviors in the left-hand column, they often get behaviors in the right-hand column. They struggle with how to move from the right to the left.
Table 1 - Character Configurations and Their Impact on Learning
When organizations are dissatisfied with their culture or find they lack organizational and strategic agility, the first place they should examine is character. The 10-question survey in the From Good to Great article provides a metric on how well individuals and organizations understand and are developing character. Organizations likely suffer because they haven't understood or invested in leader character development. Because there has been a great deal of misunderstanding about character and how it influences judgment and decision-making, many organizations have cultivated leaders with unbalanced character. Unbalanced character leaves the individual and the organization vulnerable and producing the behaviors in the right hand column of Table 1. Moving from the right hand column to the left requires investing in character.
There are a lot of prescriptions for navigating a BANI world, but the scarcest resource will be the strength of leader character at the heart of organizational agility and strategic resilience. It is individuals who have to make sense of the world, collaborate, make the tough strategic decisions, and bring the strategy to life through their actions. In the Cracking the Code: Leader Character Development for Competitive Advantage article I co-authored with Corey Crossan and Bill Furlong, we describe steps to investing in character.
One practical approach we use in our strategy classes and organizations is the practice of improvisation. Improvisation is a type of organizational learning ideally suited to co-creating strategy in real time. My strategy colleague, Dusya Vera, and I have extensively researched this field of research and practice. The practice of improvisation stress-tests character, and character is needed to effectively improvise as Corey Crossan, Cassie Ellis and I describe in Character and Improvisation: A Recursive Relationship. Another great resource is the Question of Character Podcast Episode with skilled improviser Kate Ashby describing how improvisation can support character development.
Leader character needs strategic competence to harness the human potential arising from character. Organizations can have leader character and strategic competence but underestimate the influence of BANI. Cultivating an appreciation for BANI helps to stress test leader character and strategic competence. These four foundations will help build strategic resilience and agility in a BANI world.
