Tackling the Uncertainty Paradox – An Introduction

Uncertainty can drive opportunity.

Uncertainty can also drive you mad and destroy your company.

Bummer.

Bill Welter (Adaptive Strategies), Kay Plantes (Plantes Company) and I have been discussing how the uncertainty caused by stronger, less predictable and more frequent disruptions can be as large a source of opportunity as it is a threat. We’ve been considering why such uncertainty tends to freeze some and free others. And we’ve been thinking about where companies and individuals can find solid traction for progress even when they feel trapped by uncertainty.

The three of us have worked with a wide range of organizations from the very large Fortune 500 to the very small entrepreneurial start-up and we tend to agree that standing still is about the only option NOT open to you today.

You are either planning your moves or circumstance will do the moving.

Sound scary? It should, but maybe in more of a roller coaster sort of way. Think about it, the economy has its ups and downs, technology drives you through loops and leaps and your customers are constantly throwing in wild curves. Not to mention the twists from world politics, commodity prices and competition. But we think there are ways to prepare for the wild ride, ensure the track is safe and train well built. Ways that head you towards fun and profitability rather than derailment.

The Uncertainty Paradox

Uncertainty is a funny thing. At the same time it destabilizes your organization’s ability to generate profits it opens up opportunities for the future. (One can also argue that too little uncertainty leaves you open to severe risk from an ‘unlikely’ event, such as the financial firestorm in late 2009 – but we’ll leave that for later.)

In research literature the Uncertainty Paradox is referred to from several different perspectives. For instance in terms of government regulatory policy it faces the question of making decisions based on risk that can not be assessed with certainty. In research literature it is a question how managers can still make decisions with incomplete or in-exact information (qualitative vs quantitative). (Subscription only link to Roger Palmer article)

We’ll be defining it further as we go along, but for now lets call it the belief that organizations and individuals need insights and strategies to move forward with certainty even under conditions of increasing uncertainty if they are to take advantage opportunities as they are uncovered.

The three of us are tackling the Uncertainty Paradox from our different perspectives. The nice thing about working together is that we each focus on different aspects of preparing a company to innovate and react to maximize profitability.

First an introduction to our ‘circles of influence.’

Preparing (for Leadership) — Differentiating (the Enterprise) —- Connecting (to Customers/Partners/Competitors)

Preparing – Uncertainty demands leadership that is prepared at all levels of an organization to act decisively and timely. In Bill’s book “The Prepared Mind Of A Leader” he describes a key variable:

“Some of us are ordained leaders in our organizations. We have the appropriate title and the appropriate box on the company organization chart. Others of us are left with the unofficial title of “follower.” However, the reality of the need for speed and intelligence on the spot makes this distinction moot. We simply can’t wait for the official chain of command to comprehend the changing world around us: we don’t have the time, and the situation demands a response! Therefore, everyone has the responsibility (but often not the cultural permission) to work outside their job description to take advantage of opportunity that leads to strategic advantage. Leadership is seen in acting with foresight in the best interest of the organization’s value chain, in line with personal and societal values. Prepared Minds enter the action anchored in purpose and unafraid to think and act differently than the status quo.” — Bill Welter – The Prepared Mind of a Leader: Eight Skills Leaders Use to Innovate, Make Decisions, and Solve Problems

Differentiating – Strategically differentiating your enterprise – product, structure, revenue streams, the whole ball of wax – becomes more critical as outside disruptions and outright copying intensifies. In Kay’s book “Beyond Price, Differentiate Your Company in Ways That Really Matter” she talks about shifting from Customer Driven to Market Driven:

“They [Strategically Differentiated Organizations] have broadened their external focus so they can understand the forces at work in the market as a whole, and they make deliberate decisions about both where to compete and how they will stand out from the competition.” — Kay Plantes – Beyond Price: Differentiate Your Company in Ways That Really Matter

Connecting – To many, marketing has become about communications. If you’ve been around me for a while you know that’s not the way I preach the discipline here. Marketing, as I look at it, involves creating and nurturing an organization’s internal and external connections with customers, partners, competitors and marketplace to drive feedback for decisions, productivity gains, and innovation. Disruption tests those connections so they must be secure:

“Driving the marketing discipline through your organization creates entanglements with customers deep down in the soul. It affects creativity in ways that are profound. Just think what would happen if your customer and prospects became an intimate part of your org chart.” Fred Schlegel, Frogblog

Whether you want to call it marketing or something else, we’ll be looking at strategies and ideas that can drive those relationships in the face of uncertainty.

A Group Project

Each of us will be looking at real world tools and strategies that can drive a company, idea or you forward in the face of a world seemingly gone mad. I’m going to leave it to you to visit Bill and Kay’s websites to seek their take on the Uncertainty Paradox and get a better feel for their background. The perspectives overlap and interconnect in ways that even we haven’t fully imagined yet. However, in the spirit of ‘open’ and ‘moving forward with certainty in the face of uncertainty’ we’ve decided to flesh out our ideas in blogger style. We’re hoping that the community of commenter’s at each of our blogs will join the conversation, challenge the ideas put forward and strengthen the concepts so they’ll be of more use.

The three of us are posting introductions to the Uncertainty Paradox today. Add your voice to the discussion here and at their blogs.

(Update 10:00 am : I jumped the gun on publishing by a bit, so Bill and Kay will be posting in a bit.  I’ll update links as they are available.) (UPDATE 7/24/2009: Links have been updated to Bill and Kay’s introductory posts.)

Do you have any examples of opportunity born out of uncertainty?

My thanks to Brad Shorr, business blog consultant extraordinaire, for introducing the three of us and instigating this little thought experiment.

Photo credit: kr7ysztof via istockphoto.com

The Uncertainty Paradox Three business bloggers search for leadership, strategy and customer relationship insights and certainties in a world full of escalating uncertainties.

Join the continuing conversation at each of our blogs as we explore the implications of the uncertainty paradox.


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20 Responses to Tackling the Uncertainty Paradox – An Introduction

  1. Terry Heath says:

    As a writer I experience the Uncertainty Paradox every time I face a blank page and aspire to fill it with text.

    Often, I end up with something other than what I started out to create and sometimes that result is better than the one I expected. It seems the same thing can happen in business. In writing I may have an objective or an outline, and in business we may have some form of a plan. But in either case, holding steadfast to these expectations can either stunt or stimulate the end result. Who can guess which it will be?

    I guess the real paradox is being prepared and having a plan, but remaining open to inspiration.
    .-= Terry Heath´s last blog ..Five Writing Tips to Engage Readers =-.

  2. Pingback: Leadership in times of uncertainty » Adaptive Strategies Blog

  3. Brad Shorr says:

    Fred, All your intro posts raise so many questions – ones which are really vital to any organization that wants to survive for more than a few years.

    You ask for examples … in 2005 the future of interactive marketing was definitely in its early, formative stages. I thought blogging would become a key component of the business marketing mix and decided to specialize in it. It’s been gratifying to see the market move in my direction on this, especially since in the early stages a surprising number of people scoffed at the idea of blogs (let alone Twitter!). For me, settling on blogging was a combination of my natural inclinations (I wanted to do it so I justified my decision with logic), my sense of the market (I had faith in my logic), and a desire to have a long term plan.
    .-= Brad Shorr´s last blog ..Funny Marketing Photos =-.

    • Fred H. Schlegel says:

      Hi Brad, Blogging and social media is a great example of having to deal with uncertainty in the marketing tool set. New possibilities are opening up so quickly it can actually make it easier for folks to decide to wait until things settle out, especially when the tools seem to fly in the face of traditional message control. It’s folks who stick with good, new ideas like you that drag the rest of the world along.

      Your point that the desire to do something can effect the logic used to decide to do it is a really important part of the evaluation of an idea. I happen to think that if a company (or an individual) is really wanting to do something then heaven and earth should be moved to try and make it happen. That desire can be a critical element in it’s success. However, keeping in mind that the desire to do it may nudge logic and evaluation can prevent misinterpreting data that indicates shifts in strategy are needed.

      Have you noticed a difference in the logic used by companies that actively want to become active in social media vs those that are reluctant?

      Thanks Brad!

  4. Brad Shorr says:

    Hi Fred, That’s a really good question. I’m sure there is a difference in logic, but I don’t know that I see it. My impression is attitude and culture are more the drivers. Some people/firms are very secretive and bureaucratic, whereas others are quite open and empowering. The latter mindset is far more receptive to blogging and interactive media in general. Another driver is what competitors are doing. If a company catches wind that a rival is rocking the house with a blog, it becomes far more curious. This happens with pretty much any type of marketing, though, not just new types of marketing.
    .-= Brad Shorr´s last blog ..Funny Marketing Photos =-.

    • Why is it we admire and write up those companies that are innovative and take a different path, but when it’s decision time we weigh what others are doing so heavily? Your experience matches my own in product development. Much easier to get approval for a feature similar to a competitor’s than a radically new mode.

  5. Bill Welter says:

    Fred,
    Your challenge “to move forward with certainty even under conditions of increasing uncertainty” hits at the heart of leadership and explains some of the problems we see in businesses today. Many senior executives came into their positions during a period of unprecedented growth — some things may have been uncertain during the 1990s but we knew for sure that the tide was lifting all boats. Now they are being tested as never before and need the eyes and ears of “the troops” to move ahead. And here’s the beauty of our current level of uncertainty — it’s affecting EVERYONE. Those who figure it our first get eh advantage.
    Bill

    • Hi Bill,

      The how is the heart of it, that’s for sure. Of the four skills you selected for your post on our topic I think the imagining skill really helps meet that call. Harkens back to the thought experiments of Einstein and Bohr in many ways – if you can imagine the way things should be different then your well on your way to building the system that supports that. Tough to lead if you have no end point or focus to rally folks behind.

      Big issue you raise with executives coming to their positions during a period of growth – the factors they used to make decisions previously may be exactly the wrong things to be looking at now. Making that shift can be very difficult if you systems don’t support it.

  6. J.D. Meier says:

    > organizations and individuals need insights and strategies to move forward with certainty even under conditions of increasing uncertainty
    I like that line.

    I started to focus on anticipation as a skill about 3 years ago. I mean really focus on it. I started mapping out the cycles and systems of things. Interestingly, the more you can map a system (whether it’s an economy, a business, or a year in your life), the more you can anticipate or at least design for potential threats, and respond to opportunities.

    I used to be surprised by certain events at Microsoft, for example, and then I started mapping out the business rhythms and then things made sense. I was originally surprised by technology moves and then I mapped out the technical landscape and started to see in advance, how things would play out. Keep in mind, I used to be “surprised” by recurring events in my life (late for birthdays, late for holidays, … etc.), they would just creep up on me. The more I started to map out time, the more I saw how so many things are predictable. For maps that I don’t have insight into, I find some experts who seem to know how things work and they give me a new vantage point. It’s interesting how knowing the cycles of things really can help you anticipate what previously could have blindsided you.

    Sure there are still the outliers, the black swans, and the disrupters, but playing out what ifs and blue ocean strategies really helps me expect the unexpected. Of course, maybe the real lesson is that it’s less about preparing and maybe more about learning and responding … or adapting … or built to change, over built to last.
    .-= J.D. Meier´s last blog ..Proven Practices for Individual Contributors =-.

    • Hi J.D., I love the insights you bring with your comments. They always spur my thinking. The idea of “anticipation as a skill” that you can improve and add to your process seems empowering. Being a ‘surprised by birthday’s’ kind of guy myself the connection between the simple idea of calendaring and the more complex idea of mapping is great. Do you go so far as to map out odds for various paths/decision points or and do you explicitly leave room for the ‘black swans’ in that 1% ‘there be dragons’ range?

  7. Karin H says:

    Ended up here on this very interesting article through Brad’s link on FB. Nothing is ever certain, but as long as you keep sight of your “hedgehog” concept (keep doing what you’re good at, best at) you decided your business has you won’t be thrown off course by any uncertainty.

    The first time I realised this practical and liberating truth was when I read Jim Colins and Co’s “Good to Great”. We’ve been ‘hugging’ our hedge hog concept since then and are still moving forward (growing in uncertain times).

    Karin H (Keep It Simple Sweetheart, specially in business)
    .-= Karin H´s last blog ..Why your documentation is useless and how to make it Useful =-.

    • Hi Karin, I follow Brad’s links quite a bit myself, I’m glad you followed one here! I really like Collin’s perspective (picking up his newer book soon) on being great. I hadn’t thought about the hedgehog concept in a while, but off the top of my head I recall it as being a powerful reminder to not be sidetracked by fads and what others are saying you should be doing.

      Maybe if you are truly in touch with that inner hedgehog it gives you the freedom to find new ways of implementing even in the face of crazy industry disruptions. So a great musician accepts their loss of distribution control, but explores the other paths that can generate revenue because they remain focused on what their core strength is – the music. The more focused on the music they are the more likely success follows? Hmmm. You’ve given me something to think about. I’ll have to go back and review Collin’s material and see where this goes.

      • Karin H says:

        Hi Fred

        I reread Collins too once in a while and still find new ‘jewels’. It sounds like a simple concept but it can take a while before you discover (sometimes stumble on) your own business or personal hedgehog concept.
        And there are always plenty of distraction out there which makes you doubt.

        When I read Good to Great the first time our business was still very young (and very much struggling). It cave us the focus we needed: where are we good at, is that the best we can do and do we have the resources (ability etc) to do this. Once we said yes it kind of took off in the most possible way. Not saying we never struggled again – of course we do, we’re a business 😉 – but staying focussed on our ‘essence’ is our guide.

        (And to keep remind me of our hedgehog concept, where it stand for and what is has brought us already, I even bought a hedgehog charm for my bracelet 😉

        Karin H
        .-= Karin H´s last blog ..Why your documentation is useless and how to make it Useful =-.

  8. LaVonn says:

    In a planning meeting the other day the question was put to me as a marketer on how do you really measure creativity and innovation. In the pursuing discussion I presented the idea of measuring either is extremely difficult because people tend to believe if they like it it is creative or innovative….if they don’t it isn’t. I think the same logic is used by many when facing uncertainty (good and bad)…if I don’t understand it then I don’t think I should embrace it. From that comes the business disease of “gottaknow” ie., I gotta know everything before I can move forward. Inevitably these folks tend to have to deal with much bigger problems in the end because sometimes it doesn’t matter which path you take – but that you take one!

    Good luck to you, Bill and Kay as you tackle this most important discussion during a most uncertain time.

    • Hi LaVonn,

      That need for absolute certainty (gottaknow) freezes a lot of people in place, both from an organizational standpoint and individual standpoint. The filters we use to evaluate the new in many cases are designed to try and create an element of the absolute, which I think is why things start to fall apart when change and data overwhelms those filters. This question of pre-conceived interest defining the weight and direction of analysis seems to be an important aspect to address since the more uncertain things become the more we lean on hunch and opinion. Thanks for the good wishes and your input, I’m enjoying the conversation immensely!

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