Commentary on Rosenhead JV (1978): An education in robustness
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#2000 Operational Research Society Ltd. All rights reserved. 0160-5682/00 $15.00 www.stockton-press.co.uk/jors
50th Anniversary Paper Commentary on Rosenhead JV (1978): An education in robustness J Hough, Rolls-Royce plc, (Editor, Journal of the Operational Research Society, 1985±90).
When I was asked to choose two papers from my period as editor of JORS, I was quite disappointed to discover that this paper fell outside my time in of®ce. I have always remembered it as an elegant little paper, illustrating one of the major issues of strategic planning. Re-reading it on this occasion merely reinforces my opinion. The key objectives of strategy formulation are that the strategy should be clearly expressed; there should be a shared stakeholder understanding; it should focus on de®ned objectives; and it should be possible to identify whether the strategy is delivering the expected results. These attributes are addressed in almost all textbooks or primers on how to be a good strategist. However, there is a further aspect of strategy which is not usually given the attention that it deserves. This is the notion of robustness, which is what this paper identi®es and elegantly illustrates. The main problem with the future is that it lies before us rather than behind us and comes fully equipped with brand new risks and uncertainties, to add to the ones which we perceive as we formulate our strategies. Most planning, although regrettably not all, acknowledges that the future is uncertain. It copes with this by introducing mid-course corrections into the plan, as dictated by external changes, and thus moves from one static plan to another. A rather more uncommon approach in these lean days is to build extra resources into the plan as a contingency for future unknowns. Rarely does the strategy itself acknowledge the imperfection of our knowledge about the future by building in options to take alternative future directions, the selection of which will only be possible as the future unfolds and our knowledge improves. The current thinking in real options theory is an attempt to value strategies in terms of the alternative futures for which they are relevant rather than by selecting the most
likely set of assumptions and producing a singular value. I have to register an interest in this area, with its relevance to ¯exible technology platforms and market positioning strategies, but it is unlikely to move quickly until the approach becomes more pragmatic and, as a senior colleague puts it, relies less on `¯ute music'. There is also a link into complexity theory, which recognizes the need for decision-making processes to evolve in real time to cope with the swirls and eddies of the modern world. The problem illustrated in Jonathan's paper is deceptively simple but has profound implications for the decision-maker. A 14 year old schoolgirl has to select which CSE/GCE subjects to take through to examination stage. Each potential subject is of greater or lesser interest to the 14 year old, but each will form a component of groupings tha
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