Recession aftershocks, huge new risks, pervasive uncertainty—the challenges defining today’s business environment place a greater premium than ever on good corporate strategy. Yet the strategic-planning approaches that many corporations devised for such times are ineffective.

Corporate strategists have coped with very demanding business environments before. During the 1970s, rocketing oil prices and staggering levels of inflation halted a great period of expansion. Equity returns sunk well below bond returns for the market as a whole. Risk capital dried up, and the economy changed little.

But even then, some companies proved resilient. Then, too, modern strategic planning was born to help executives review all of a corporation’s products and markets and decide which deserved more capital and which should be closed. Although operations were a part of such reviews, operational fixes were assumed to be insufficient. Often the answer was an acquisition or a divestiture.

The new process captured top management’s attention. GE led the way, but practically all US companies, and many in Europe, accepted this new management art and its fundamental credo: destroying businesses—knowing when to let go and take a new direction—is a surer way to generate value and outperform markets than trying to protect what you have.

Why has that spirit faded? Start with the fact that the economic forces that now seem so acute have been at work far longer than even the recent lengthy bull market. For several decades, we have celebrated big corporate survivors, praising their excellence and durability. But very few of these companies, which operate under an assumption of continuity and longevity, can keep up with the pace and scale of markets, which relentlessly remove them when they cease to perform. Of the 500 companies making up the S&P 500 index when it was introduced in 1957, only 74 remained there through 1997. Of these 74, only 12 outperformed the index from 1957 to 1998. If the S&P 500 now consisted solely of the companies on the list in 1957, the overall performance of the index would have been 20 percent a year lower than it actually was.

Discontinuity is increasingly recognized as an organizing principle of the global economy by executives who know they can’t build their strategies, structures, and systems on the old assumption of continuity. To meet the challenges of discontinuity and to perform like markets, a corporation must learn to change as rapidly as they do, without losing control of operations. Management’s great task will be taking strategic control of companies and simultaneously decentralizing operational control—loosening controls without losing control.

In this issue, McKinsey thinkers explore the uncertainties and risks of the new global business environment and new strategies for transcending them. Strategists, argues Lowell L. Bryan in "Just-in-time strategy for a turbulent world," must not only stop assuming that strategic destinations can be predetermined but also embrace a much more fluid approach to steering corporations. In "Are you too focused?" Neil W. C. Harper and S. Patrick Viguerie consider the benefits of more precisely balancing business focus and diversification. Patrick F. Coveney, Jeffrey J. Elton, Baiju R. Shah, and Bradley W. Whitehead, in "Rebuilding business building," explore the new generation of in-house entrepreneurial businesses, to which executives of large corporations are turning for growth.

McKinsey alumni Scott Durchslag and John Hagel III and their coauthor, John Seely Brown, contend in "Loosening up: How process networks unlock the power of specialization" that the real power in business collaborations comes from treating them like flexible networks, not production lines. Their provocative point of view should stimulate discussion about the applicability of their ideas across industries and on new models for managing supply chains and other cross-company processes. Finally, in "Tired of strategic planning?" Eric D. Beinhocker and Sarah Kaplan show how today’s conventional strategic-planning process stifles the dialogue it was meant to create and offer a program to reinvigorate it.

Turbulent environments require sophisticated navigation aids. Once again, corporate captains must steer the ship through the storm.