How to Sell to Everyone in Everywhere

Every year at insurance companies around the world strategic planning processes unfold. They aspire to set bold new direction but frequently yield incrementalism and strategic inertia—in insurance and in just about every other industry. In fact research by our colleagues shows that economy-wide in multidivision companies the amount of capital allocated to each business unit from one year to the next is nearly identical; the mean correlation is .92.There are myriad reasons for this ranging from risk aversion to corporate politics to the Quixotic quest for the perfect strategy that does not exist. And there’s also an empirically substantiated way out: recognize that strategy is about playing the odds. Not every decision is going to result in a win—but companies that increase their batting average so to speak are more likely to succeed. Strategy is probabilistic not deterministic. That too is the case in every industry according to a multiyear research effort by our colleagues that culminated in the 2018 publication of Strategy Beyond the Hockey Stick. Strategy is probabilistic not deterministic.