This conversation is one of three installments summarizing Lowell Bryan and Richard Rumelt’s reflections on the implications of the financial crisis. This third part explores what it means for corporate strategy today. The first examines the broad managerial implications of the crisis, and the second focuses on the public-policy response.

Rare is the time when the strategic environment for a great many companies and industries undergoes a rapid, fundamental, and universally perceptible change. UCLA’s Richard Rumelt and McKinsey’s Lowell Bryan argued in separate McKinsey Quarterly articles (“Strategy in a ‘structural break’” and “Leading through uncertainty”), both published last December, that the financial crisis of 2008 was such a moment. Deleveraging, an expanding economic role for government, a reevaluation of imbalances in global trade and capital markets, and pervasive uncertainty, they suggested, were likely to upend business models and create unexpected opportunities. For Rumelt and Bryan alike, the ensuing months have confirmed the magnitude of the strategic change under way. In late April, they talked with the Quarterly’s Allen Webb about the structural shifts to come in different economic sectors, the strong likelihood that the biggest opportunities will be surprisingly different from anything strategists expect today, and the resulting importance of building flexibility into a company’s strategy.

The Quarterly: How would you characterize the strategic environment today?

Richard Rumelt: The level of uncertainty is as high as I’ve seen in my lifetime. Is the government spending program going to work? Is quantitative easing going to work? Is the dollar going to collapse? Is world trade going to come back? Is the consumer going to come back?