BOTTOM LINE: Regardless of whether companies choose to compete by price, service, or social consciousness, they must excel in their niches. Oversupply spells death to mediocrity.

THE AGE OF UNCERTAINTY
When Michael Hammer's company conducted a survey in 1999, none of the problems companies faced then - the Asian economic crisis, the advent of the Euro, industry-wide megamerging, side effects of the Internet - had been identified on any company's five-year strategic plans back in 1995. "These problems arose suddenly, coming seemingly out of nowhere," says Hammer.

September's events further accentuate his premise that we live in an age of enormous uncertainty. "Had you conducted a survey on September 8," he says, "global terrorism would not have made the top 10 concerns."

Such uncertainty will persist - the technological pace of the world has accelerated, the spread of information is now almost instantaneous, and the world is volatile because we no longer assume that the way things were are the way things have to be. So while businesses may be uncertain about which crisis is coming next, they may be certain crisis will come. "Companies need to get ready. They need infrastructure - experts to turn to, systems to implement - to adapt to change quickly."

Contrary to the way Harry S. Dent Jr. reads the future, Hammer believes uncertainty bodes poorly for the general health of the stock market.

"In an age of uncertainty and excess supply, corporate earnings will not rise marketwide." Hammer believes investors must invest in individual companies using a company's ability to cope with uncertainty as a key variable in the evaluation process. "We shouldn't invest in a general sector (e.g., technology, biotech) hoping for overall growth because in a world of change, unpredictable earnings deserve low multiples."