Friends,
I hope that all is well with you and yours, and that this e-mail finds you on a boat with shoddy connection, in the tropics, three months after I sent it.
Now accepting keynotes for 24Q1-24Q3
Every year, I create three main presentation decks. For 2024, they are:
What to Do When You Don’t Know What to Do: How to turn uncertainty into a competitive advantage. (Based on my new book by the same name.)
Regression Toward the Meme: Why modern leadership falls into old traps - and how to avoid them.
The Efficiency Illusion: How to uncover the hidden costs of digital commerce and create profitable growth.
If you want to book me for your event, corporate speaking slot, or workshop, merely send me an email. To make sure I am available, however, please do so at your earliest convenience; my availability is limited and the schedule is filling up fast.
All presentations are adapted to fit the event. Entirely customized presentations, including topic, are available upon request at an additional cost. More information may be found here.
A couple of updates before we go-go
Nothing much to say today; have had a brutal week with illnesses, surgeries, and fuck knows what. I am not complaining, mind, just very tired.
Moving, therefore, swiftly on.
2024.1.c.
Managing everyday uncertainty
Part III: Difficulties in fundamental management
In last week’s premium newsletter, we established the fundamentals of uncertainty; what is most commonly is perceived to be, how it is handled, and what the often unconsidered limitations of the traditional approaches are. Today, we are going to build upon our conclusions.
So.
If there is one thing that everybody should know about uncertainty, it is that human beings, for obvious evolutionary reasons, absolutely detest it. Ambiguity in all its forms comes with a need to expend mental effort trying to predict what outcomes there may be and how to best prepare for them. In turn, this creates stress that, especially when prolonged, is among the most insidious stressors that we experience.
To illustrate, de Berker et. al. found in Computations of uncertainty mediate acute stress responses in humans (2016) that all measures of stress, both subjective and objective, max out when uncertainty does. That is to say, when the probability of a negative outcome is 50%, stress peaks. But even then, the sample space is defined - we may calculate the odds. As we demonstrated seven days ago, not all uncertainty falls into this category, which makes the situation even more difficult.
Either way, the point is that uncertainty can (and regularly does) cause more stress than inevitable pain. On a basic level, to reuse an example from Rory’s eminently readable Alchemy (2019), this means that we would rather spend nine minutes waiting for a train that we know will arrive in time than six minutes in ignorance. The single best thing that London Transport did to improve passenger experience per pound was therefore not to introduce faster, more frequent, more comfortable, later running trains, but to put dot matrix displays on the platforms.
When it comes to organizations, the same principle applies. As Peter Drucker found out when he tried to get companies to implement MBO, most managers prefer predictable performance to peak performance. Even guaranteed failure is less stressful than a non-guaranteed success.
Consequently, we instinctively favor methods that portend certainty, privilege techniques that increase perceived control, promote those who appear confident, and hire those who claim themselves able to provide a guaranteed result.
Sometimes, it works. When we are dealing with an ordered process, for example, there is ample opportunity to define beforehand what should be done. But when we are dealing with the complexity of markets, consumers, competitors, and so on, there are limits not just to what we do know but what we can know.
In other words, irreducible uncertainty will always and forever be a key component of a strategist’s reality and it is absolutely crucial to understand why that is the case. One of the fundamental reasons for doing strategy at all is to encourage collective action and discourage mucking about. But the farther our strategies look to the future, the higher the uncertainty, and the more we move away from the basic element of control that the strategy was supposed to create in the first place. Meanwhile, the more closely we focus on the present, the more likely unwanted short-termism becomes; employees will trade away a possible tomorrow for a likely today as soon as the opportunity presents itself (as we see time and again in today’s efficiency focused corporate climate).
So what do you do? Well, that is what we are now going to discuss.