The shaky economy and recent political events make predicting the future with confidence inherently risky says Deloitte Research, suggesting that financial firms must be more flexible.

Changing technology, uncertain regulation and globalization sweeping through the industry will require a fundamental shift in how companies approach planning it says. “Business strategy is no longer about making commitments, but about preparing for multiple possibilities. It is driven by events, not planning cycles”, says a new Deloitte Research study.

In the report, “Strategic Flexibility in the Financial Services Industry: Creating competitive advantage out of competitive turbulence”, Deloitte Research explains the fundamental components and benefits of strategic flexibility.

“The key to strategic flexibility is understanding the linkages between the different phases and creating a ongoing process of strategy development, implementation, and review,” says Bill Currie, principal in the financial services group of Deloitte Consulting. “Now more than ever financial services executives need to make strategic decisions that will move their organizations forward.”

Applying this methodology will affect processes essential to organization life, including corporate-divisional relations, executive evaluation and compensation, strategic planning and investment valuation. Given the enormity of the challenges facing financial services firms, however, only such comprehensive approach will meet today’s extraordinary demands, explains Currie.