Managing business transitions: Strategic clarity in an uncertain environment

In today’s volatile global environment, companies across Asia face mounting pressure to reinvent themselves amid technological disruption, shifting regulatory regimes and intensifying geopolitical headwinds. Balancing short-term operational performance with long-term transformation has never been more complex, and against this backdrop, clarity of strategy, disciplined risk management and the ability to adapt organizational structures have become essential for sustained competitiveness.

In this interview, Scott B. Newton, Managing Partner at management consultancy Thinking Dimensions, discusses the need for strategic clarity and a focus on practicality over aspiration, the difficulties Chinese companies face in other markets and how companies can balance short-term operational priorities with long-term strategic growth.

Q. You have advised global organizations on strategic transformation for decades. What are the most common mistakes companies make when facing disruption, particularly in Asia?

A. The first mistake is assuming that industries evolve in a linear fashion—what I call “x plus one” thinking. Executives expect the world to look much as it did yesterday, only incrementally different, and they miss the big disruptive inflection points. Banking is a good example: the rapid rise of private credit, once a niche, is now mainstream, eroding banks’ customer base and profits. Similar disruptions are underway in insurance and consumer products.

In Asia, particularly in China, companies are often more attuned to digital ecosystems, which can provide potential advantages in anticipating shifts. But when Chinese firms move abroad, they can struggle to adapt to environments where those ecosystems don’t exist or behave differently.

Q. How do you define “strategic clarity” in an era of volatility, and to what degree do leadership teams struggle to achieve it?

A. Strategic clarity means using strategy to guide day-to-day decision making. Too often, strategy is an abstract PowerPoint deck, more aspirational than operational. True clarity provides criteria for setting priorities, allocating resources and deciding not only what to pursue, but equally what to stop doing.

The problem arises when companies treat every new priority as additive. For example, they might declare cloud a new focus but still continue everything they’ve always done. The result is complexity, not clarity, making it impossible to manage the business effectively and allocate resources to the highest priorities for the future.

Q. What are the unique strategic challenges facing Chinese companies looking to go global today?

A. The biggest challenge is recognizing that the world outside of China operates very differently. China has built a unique and highly advanced digital ecosystem, but there is no comparable system in Europe or North America. Companies must learn to operate without that infrastructure and data.

Regulatory environments are another hurdle. In China, firms typically maintain close, cooperative relationships with policymakers. Abroad, they often underestimate the importance of building similar relationships. Success in Italy, Canada, Mexico or the UK depends on cultivating those ties to avoid friction and misalignment. But Europe remains a high-potential market for those Chinese firms able to manage diverse stakeholders and bridge multiple cultures effectively.

Some regions align more closely with the Chinese approach. The Middle East, for instance, has more consolidated decision-making and cultural similarities, which make partnership-building easier.

Q. How can companies balance short-term operational priorities with long-term strategic growth—especially in uncertain macroeconomic environments like China’s?

A. The best approach I have found is to create two distinct teams: an “exploit” team and an “explore” team. The exploit team focuses on operational excellence, efficiency and delivering near-term financial results—the core machine that keeps the business running. The explore team looks outward, investing in new growth opportunities through venture capital, university partnerships, accelerators or joint ventures.

This dual structure, sometimes called an ambidextrous organization, allows companies to protect the core while testing future models.

The critical point is the handoff—when a promising “explore” idea transitions to the core business. Boards and management must establish clear processes for incubating new opportunities into the mainstream. Equally important is knowing when to shut down failed experiments as sunk-cost bias often keeps projects alive long after their potential has evaporated.

Q. What role should boards and C-suites play in driving transformation, and where do you see disconnects between vision and execution in Asia-Pacific firms?

A. Boards often fail to properly assess risks. Management’s role is execution, but boards are guardians of the organization’s long-term viability. Strong boards actively evaluate reputational, regulatory and existential risks, not just potential upsides.

In Asia-Pacific, missteps abroad often stem from unmanaged risks, whether they be cultural misunderstandings, regulatory misalignment or reputational damage. Boards need to ask: What could go wrong? How does this align with our core values? How will it be perceived in a different market?

With emerging technologies like AI reshaping business models, boards must also ensure that companies don’t adopt risks that could jeopardize their brand or survival. The disconnect often arises when boards focus too much on growth opportunities without equally considering downside protection.

Q. Many companies in China are caught between digital transformation and traditional manufacturing models. How should they frame strategic choices without getting stuck in “either/or” thinking?

A. I encourage companies to move away from “bet-the-company” decisions and instead adopt an options-based mindset. Strategy should be about preserving optionality—keeping multiple paths open until new information clarifies which is most viable.

This requires organizations to build flexible execution capabilities, almost like an internal professional services unit that can quickly pivot as circumstances change. The old model of 10-year rollouts is too risky in today’s volatile environment.

Of course, optionality must also be balanced—too many options create paralysis. That’s where disciplined evaluation and a strong portfolio management approach are key.

Q. How do you assess whether a company has the right structure and leadership in place to execute a strategy, and what diagnostic tools does Thinking Dimensions use?

A. We use two primary tools. The first tool we use is strategic assumptions, which should be a short list (five or six maximum) of the organization’s shared assumptions about the future, covering supply, demand, technology, regulation, etc. These must be agreed upon by both management and the board.

Second is portfolio analysis. This requires mapping the business into a portfolio of core, growth and explore models. We then ask: What capabilities are needed in each? How is the balance across categories? What would happen under stress scenarios?

This portfolio approach helps leaders to see whether they are investing enough in the future while protecting the present. It also makes clear which capabilities to build, retain or exit, ensuring the organization is continuously future-ready.

Q. What advice do you give to Chinese founders or family-owned businesses facing a generational leadership transition while needing to adapt to a globalized business landscape?

Start early and make the process transparent. Create a family advisory council or board that involves members from a young age—sometimes as early as 16. Treat family strategy with the same discipline as business strategy: define clear goals and establish criteria for participation.

Critically, family members should only hold roles they are qualified for. The vice president of sales should earn that role through capability, not surname. Alternatively, some families decide to keep operations entirely professionalized, with family members focusing on governance and investment.

There are two key pitfalls that derail transitions which should be avoided at all costs. Firstly, succession by crisis—waiting until the founder steps down suddenly, often due to health. And second, perceptions of unfairness—when siblings believe wealth or roles are distributed inequitably. Both can be avoided with early planning, fairness and transparency. In my experience, a well written Family Constitution that involves input and consultation with the stakeholders is a valuable tool in guiding and building for the future.

Q. Can you share a case example where a company successfully shifted strategy in a complex market? What made it work?

A. French multinational Schneider Electric is a great example. Originally a low-tech manufacturer of electrical components, the company reinvented itself into a high-value technology services provider. This transformation lifted its market capitalization by over 500%.

The shift wasn’t just about technology, it was about repositioning toward customer outcomes rather than commoditized products. The company’s chair even relocated to Hong Kong, reflecting the strategic importance of Asia-Pacific to future growth.

Microsoft offers another case. Once questioned for its relevance, it was transformed under Satya Nadella from a software licensing business to a cloud-based value creator, unlocking trillions in market capitalization. Both examples show how firms in regulated, commoditized industries can reinvent themselves by focusing on customer value and long-term outcomes.

Q. If you could give one piece of advice to business leaders in China navigating post-COVID market fragmentation and geopolitical tension, what would it be?

First, don’t ignore geopolitics. Every multinational must understand the political and regulatory dynamics in each market—whether in China, Egypt, Mexico or Europe.

Second, Chinese companies should extend their domestic strength in policy understanding to international markets. Success requires the same depth of insight into policymaking abroad as they already demonstrate at home.

Third, stop competing solely on price. A race to the bottom erodes margins, prevents reinvestment in R&D and ultimately undermines innovation. The winners will be those who co-create value with customers. For example, Hisense has built international partnerships focused on solving customer problems, shifting the conversation away from price and toward shared value creation.