A good starting point is to recognise that we all deal with uncertainty every day – the future is never certain. People have different ways with dealing with this fact. One of the most common threads through society is to create common structures and routines that make the future appear more predictable. Structures like calendars, days of week, times of day provide a common reference on which a framework of shared routines can be constructed. Work days, weekends, holidays and office hours underpin peoples work habits so that individual routines can be woven together into a functional workforce and society.
When COVID restrictions were initially introduced the general assumption was that it would be a temporary interruption, like summer holidays, and that we would return to life as we knew it on the other side of it. This no longer seems plausible. The economy is the result of human endeavour. Everything humans do, or do not do, has an economic impact. With billions of humans having a direct input into the world economy by making independent decisions and undertaking individual activities every day, the economy is a complex organism with trillions of data points. A major focus of professional and academic economists is attempting to simulate economic activities to predict future economic activity. As a result, much of the discussion of economics is to do with the relative merits of the various economic models used to create these simulations. History has shown that during uncertain times, these predictive models have usually failed, often dramatically – largely due to false assumptions, (for more information visit www.honesteconomics.com).
A major source of error in leadership is basing decisions on false assumptions. The risk of this in times of uncertainty intensifies as we are unconscious of many of the things that we have assumed or taken for granted in our decision-making processes. The best way to address this is to create a list of all your assumptions, and mark against each of them your level of confidence in the assumption being correct, as well as the level of risk associated with it being incorrect. An indication of how much the world has changed is that there will be items on this list today that would have been thought ridiculous a year ago.
The OODA Loop is a useful reference for decision making. Developed with US fighter pilots it stands for Observe, Orientate, Decide, Act. It can be used in many contexts and is particularly useful for dealing with uncertainty. The first step is to observe the world, which includes checking your assumptions. Once this is done, you can re-orientate your understanding of the world, make the relevant decision and have the decision acted upon. This is then repeated, (which is why it is called a loop), the more often you do it – the more likely you are to succeed.
Steering the Ship
Explorers like James Cook and Roald Amundsen provide excellent examples of dealing with uncertainty. Cook discovered more of the world than any other explorer, Amundsen was the first to reach the South Pole. Both also looked after the safety of their men. Amundsen said “Victory awaits him who has everything in order – luck people call it. Defeat is certain for him who has neglected to take the necessary precautions in time; this is called bad luck.”
Leaders are required to steer a path through the external world, at the same time as they unite those in their charge around a common purpose. It is a balancing act that good leaders embrace, often empowering their team to be part of the decision-making process. This is particularly valuable in uncertain times when different perspectives can assist in identifying risks and clarifying assumptions, (Observing and Orientating). It is also important for leaders to take responsibility for decisions as well as recognising that a non-decision is also a decision to stay with what you have. This is called steering a steady ship.
One of the reasons that Cook and Amundsen were able to navigate the unknown was that they were able to deal successfully with setbacks. Cook ran aground on the Great Barrier Reef, Amundsen endured Antarctic blizzards and hidden crevasses. These types of setbacks killed other explorations, but they were able to deal with them because they had assumed that they would face some setbacks and so were prepared for them. Treating them not as bad luck, but as the unidentified obstacle that they knew they would need to overcome at some point. Part of this preparation was allowing for additional time and travelling with excess supplies. For businesses and families, this means having some spare financial capacity and the flexibility to adjust.
Managing Morale
Not everyone copes well with uncertainty, and unlike the explorers and their teams who made the decision to step into an uncertain world, today the uncertainty has come to us – whether we like it or not. In times of uncertainty, people look to their leaders. It is the leader’s role to provide as much clarity and consistency as they can, and to do so without fear or favour. To ask their team to work in the narrow window between too easy and too hard. It is a combination that is highly valued by staff, but too rarely provided.
The most common leadership mistake is to, consciously or unconsciously, seek popularity instead of respect. This is evident when leaders overstate certainty when trying to provide clarity and consistency, or when they compromise decisions due to fear or favour. It can also be seen when leaders ask less of their staff than they should, not realising that a job that is too easy to do is disrespected – and so is the person that asked them to do it.
Another mistake some leaders make out of fear of being blamed is to avoid responsibility all together. We all know them, sometimes referred to as ‘Teflon managers’, these leaders deflect blame away from themselves, whether it is on to the external world, their own team, or others in the organisation. This is the opposite of leadership and very damaging to morale and productivity.
Stepping into the Unknown
As mentioned at the beginning of this article, we deal with uncertainty every day. The fact that we don’t always recognise this is because we regard the familiar as a kind of certainty. Every journey begins with the first step, and the future begins with today. Even if you are in a bad place, it’s not too late to haul yourself up out of the crevice and prepare for a blizzard, sunshine or whatever else is next. Start by taking the time to check your assumptions, run through the OODA loop and implement it with clarity and consistency, (and without fear or favour), and you will be better placed to deal with the inevitable uncertainty of tomorrow. Do this every day and you are well on your way to dealing more confidently/boldly with uncertainty.