What is the problem? Is it real or not? Is it made up/imagined?

It was early May 2004, and Peter Johnson found himself looking forward to the Senior Management Forum that he was scheduled to moderate at the end of the month. As the Executive Director of Corporate Strategic Planning at Eli Lilly and Company (Lilly), it was his job to support the company?s senior team in the kinds of in depth strategic discussions that were fundamental to maintaining Lilly?s leadership position in the rapidly evolving pharmaceutical industry. Nearly twelve months before, in response to the widespread perception that the industry was facing an unprecedented set of challenges, Peter had been asked to undertake a comprehensive review of how the industry was likely to evolve ? and whether Lilly should consider making significant changes in core strategy and/or its business model as a result.

In response, Peter had pulled together a cross functional team of high profile people from across the company to look at the key environmental uncertainties facing the industry, and to answer the question, ?What might Lilly need to do to compete in the future?? The team ? calling itself Project Resilience after Gary Hamel?s article ?The Quest for Resilience? ? had divided its work into three interrelated phases: scenario planning, business model evaluation, and core capabilities assessment.

The first two phases had taken months of work, but were now largely complete. Peter was fairly confident that the team had a good sense of the different directions in which the industry was likely to evolve, and of the ways in which Lilly ? and its competitors ? might be able to compete under the different scenarios that the team had described. Now, however, the team was grappling with the last and toughest phase ? what should Lilly do? They needed to come up with some concrete recommendations for Lilly?s senior management as to which business models the firm should explore and how Lilly should develop new capabilities to position the firm for the future. Peter sighed as he turned back to his desk. It was going to be a long night.

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How might the future evolve? Scenarios Capabilities Required How could Lilly compete? Alternative Business Models Competitive Dynamics What should Lilly do? Alternatives Recommen- for Lilly dations How might the future evolve? Scenarios Capabilities Required How could Lilly compete? Alternative Business Models Competitive Dynamics What should Lilly do? Alternatives Recommen- for Lilly dations

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