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13 Oct 2014

Apocalyptic Decision Making – Dealing with Uncertainty

This entry is part 3 of 5 in the series Apocalyptic Decision Making

Four Horsemen of Apocalyptic Decision Making

Dealing with uncertainty means establishing reserves, flexibility and regular flow of current information

When four horsemen of apocalyptic decision making (Volatility, Uncertainty, Complexity and Ambiguity [VUCA]) confront us, we tend to avoid them. We avoid uncertainty in our decision making by focusing more on what we do know.

Not knowing how known factors might play out characterizes uncertainty. In Nathan Bennett’s and G. James Lemoine’s (“What VUCA Really Means for You” [Harvard Business Review, January 2014 edition]) example of a competitor’s product launch, we know the product, markets, timing, advertising and others. We’re uncertain about the outcome though.

Other examples where outcomes might be cloudy include:

  • Introducing a new manager to a department
  • Competing with a strong competitor for a prospect
  • Revamping an existing website
  • Launching a new song, book or ad campaign

Tackling uncertainty in our decision making means gearing up to secure information, interpret, communicate and address it on an extremely timely basis; and it means priming people to adapt quickly. It also means keeping resources in reserves, especially budgets, so we can address new, important information.

Until outcomes become clearer, this also means taking many quick, small steps, seeing what works then adjusting. We should expect having to make many small decisions rather than a few big decisions. From a personality perspective, it means relying upon people who are comfortable with issues regularly surfacing with ongoing injections of real-time information, sometimes conflicting.

Managerially, the biggest nemesis will be consensual decision-making processes and their well-established protocols. We address by coming to consensus on who will make what decisions before the event. Gaming exercises running through various scenarios and contingencies can help tremendously here. This is very much like traditional contingency planning minus the legalistic documentation.

Thus, when dealing with uncertainty, it helps much to work reserves and flexibility along with a regular diet of current information into our planning.

 

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4 Responses

  1. Great reminder to stay flexible in the ways that we approach decision making, risk, etc. That famous Darwin quote comes to mind: “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.”

    1. Mike Lehr

      Thank you, Stephen, for the reminder. Yes, many think Darwin’s evolution was based on the survival of the strongest when in fact it’s as you say.

  2. Uncertainty typically means decision making with less than sufficient information, what has often been called “fuzzy data.” Especially when time is limited, the suggestion made to take quick, small steps is very important. The uncertainty (always present; always tell my students that “the only thing certain is uncertainty”) means that the probability of missteps is significant; small steps WITH HONEST REFLECTION with likely optimize time usage.

    Agreeing on who will make what decisions sounds great – and works when the general topic is correctly anticipated. But watch it … Seems to me, in the real world, the general topic might not be anticipated. Then, (1) the temptation might be to turn decision making to the “closest” anticipated topic; or (2) revert to seniority or chain of command. Both are dangerous. My thoughts: yes, prepare as much as possible BUT, even when time is limited, take time to make sure the topic is identified and how / who will make the decision.

    1. Mike Lehr

      John, I’ve been trying to stick with the definitions used in the article. I do believe they are helpful as I would have classified everything as uncertainty. The way he subdivides what I previously considered more generally as uncertainty does give me a good vision of not only a line of attack in addressing but also in helping others. I don’t disagree with what you’re saying as I think it’s a matter of definition. For example, in the scenario you mention regarding general topic not being anticipated, the author, in his definition of uncertainty, states that causes and effects are known. Therefore, it seems quite likely that the general topic is clearly established. I believe he would consider the an unclear general topic as being result of inadequate knowledge of cause and effect. Therefore he would define that scenario as ambiguous.

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