Converting strategic ambiguity to competitive advantage: How Philips Lighting solved the challenge of LED technology disruption

Abstract

Purpose The case of Philips Lighting shows how management coped with the ambiguous but real threats and opportunities of a highly disruptive emerging technology using three insight-producing approaches: 10; 10;∙9; Probe and learn widely. 10;∙9; Explore creative hypotheses. 10;∙9; Develop multiple scenarios. 10; Design/methodology/approach The case shows how leadership teams can effectively respond when confronted with ambiguous but potentially disruptive signals. Findings When assessing a potential digital disruption, leaders can begin by probing the latent needs of current as well as potential customers more thoroughly. Once ‘probe and learn’ approaches have surfaced new perspectives and strategic possibilities, the organization should generate context-expanding hypotheses about the meaning and consequences of various weak signals. Practical implications A limited number of disparate scenarios, clearly organized around a few pivotal uncertainties, provide leaders with a strategic context for interpreting ambiguous signals. Originality/value In the current VUCA environmen, when turbulence is high or major disruption is feared, all leaders need to examine at least one scenario that directly challenges the organization’s current mindset.