Today companies grapple constantly with the unexpected: disruptive
advances in technology, the rise of new markets, sudden swings in
demand, surprise moves by competitors. To cope, firms try to improve
their forecasting and their agility, but those efforts take them only so
far. A complementary—and perhaps more effective—approach is to use
“strategic options.” These are small bets that allow businesses to test
the waters and build their experience. If they fail, they’re easy to
unwind, but if they succeed, they position organizations to capitalize
on valuable opportunities. In this article, two BCG consultants detail
three kinds of strategic options: Temporary organizations, which are
staffed by consultants and contractors, help firms ramp up operations
quickly and yet avoid massive layoffs if an initiative fails. Small
exploratory acquisitions allow firms to get a foothold in a new
business—without the costs and headaches of large-scale deals.
Disposable factories are a good solution to uncertain demand; they can
be set up (and taken down) quickly, be sited closer to demand, and
provide early data on costs and capacity that informs the construction
of permanent facilities. Executives often resist strategic options
because they seem expensive in the near term. But when a payoff is far
in the future and risk is high, they may be the best way to go. [ABSTRACT FROM AUTHOR]