As the world emerges from the pandemic, business leaders face a complex landscape of interconnected crises, from supply chain disruptions to geopolitical tensions, that require a new approach to strategic planning. In this context, executives must ask themselves four key questions: how to navigate uncertainty, assess the likelihood of inflation and recession, plan for a range of scenarios, and identify long-term opportunities.

Karen Harris, managing director of Bain & Company’s Macro Trends Group, emphasizes that the key to success in an era of extreme uncertainty is optionality, which means considering a wide range of scenarios and preparing for extreme but plausible outcomes. In this context, prediction, adaptation, and resilience are all crucial.

The economic outlook is mixed, with momentum cooling in many regions. China has revised its GDP growth target downwards to 5%, reflecting slower growth and structural challenges. In the US, the Purchasing Managers’ Index (PMI) has fallen steadily over the past year, signaling potential declines in profitability and employment. Inflation remains a concern, with consumer price indexes rising steadily in the US and the eurozone over the past two years. While inflation has moderated in recent months, central banks remain committed to reanchoring inflation around 2%.

To navigate this polycrisis, business leaders must adopt a flexible and agile approach to planning, focusing on resilience, innovation, and collaboration. By embracing uncertainty and preparing for a range of scenarios, they can identify opportunities and build sustainable, long-term growth.