One On One with Mercer's Adrian Slywotzky

Mercer director Adrian Slywotsky is the coauthor of The Upside: The 7 Strategies for Turning Big Threats into Growth Breakthroughs (Crown Business, May 2007). He says that companies should be on the lookout for big risks that can kill their business model.

CM: What are the biggest risks facing business models today?

Slywotzky: What we've discovered in the book is that precisely the same types of strategic behaviors that maximize an organization's probability of extreme achievement also maximize its probability of total collapse. The strategies that offer up the greatest possibility of success are typically based on bold commitments and bold visions of the future that are based on beliefs about how the future will turn out. Unfortunately, the future is often irreducibly unpredictable. So companies are forced to make commitments that sometimes turn out to be the wrong commitments. As a consequence, commitment-based strategy maximizes your probability of maximizing return, but maximizes your probability of failure as well. As a consequence, we've been led to conclude that everything we know about strategy is true but dangerously incomplete. And what's been missing is a discussion of strategic risk.