Unknown Unknowns

By Stuart Mackenzie 17th April 2019 Leadership

Let’s face it: business is relatively easy if you know what’s going on.

It’s also not too difficult when you don’t fully know what’s going on, but you do know what you don’t know. For example, I don’t know what the price of fuel will be this time next year, but I can feel comfortable knowing that I don’t – or can’t – know that.

However, it gets a whole lot more difficult when, because of the pace of change and the scale of disruption, you don’t know what’s going on and you don’t know what you don’t know. We are talking about the difference between risk and uncertainty. Both have upsides and downsides, and both represent a threat and an opportunity.

Risk is a gamble about something you are already planning to do – that is to say, it could go wrong but it could also go well. You can prepare for it and control the level of risk that you feel comfortable with. Risk is about managing the “known unknowns”.

Uncertainty is the state of complexity where it is beyond the ability of the human mind to comprehend all the variables, and therefore impossible to plan. Processes are no longer functioning or replicable and organisational structures buckle under the storms of unpredictable change. Uncertainty is the consequence of constant disruption. Uncertainty is about the “unknown unknowns”.

It is in these times of disruption when resilience is needed and tested. Resilience is more than the ability to survive; it is also the faculty to grow and thrive during challenge and adversity.

How can we help leaders build organisational and individual resilience?

Firstly, operational processes and structures need to be robust but flexible. We have seen a rise in Agile project management, which creates the platform for iterative deployment, lowering exposure to risk and providing incremental value. However, a flexible platform alone is not enough – it requires adaptive teams of people who are able to turn on a sixpence, collaborate and improvise. Resilience is as much about flexibility as it is about being robust. We have written about this elsewhere: you can read Holly Steiner’s excellent blog here.

Next, there also needs to be a discipline of regular scenario building: story lines and narratives that help your team think and plan for an uncertain future. For centuries, people have used myths, fables, and dramatic narratives to help think about the complexities of life, and to illuminate cautionary tales and to pass on wisdom and guidance. Scenario building is about creating stories which are built on current data and set in the future; narratives that make possible futures seem more real than just streams of data, and therefore help business leaders engage with potential challenges.

These stories may or may not come true – scenario planners create lots of stories that aren’t going to happen, and aren’t expected to happen, but are useful to tease out the issues and increase the insight, develop the thinking, and generate solutions. Through stories you bring to life better ways of thinking that help people make better decisions and increase organisational resilience.

The third area is leadership. You can manage an emergency, but you need to lead in a crisis. In a tsunami of change, leaders need to establish some level of clarity, focus on purpose, and act with a sense of volition. That means providing insight, creating options, making decisions under pressure – without the necessary data. It requires the leader to drive action in line with their vision and values.

The final step for leaders engaging in a disrupted environment is to stop trying to be a superhero. In art, the hero’s journey is not an entirely solitary endeavour. We need to nurture our networks and relationships, as individual resilience relies on a community of support. In the past, we had suppliers that were kept at arm’s length, but in the modern world where it is necessary to have collaborative flexibility, you need the open-hearted engagement of all your stakeholders. So make sure that in the good times you keep both suppliers and employees close, you invest in relationships, and you make sure they know they are valued and involved. Then when the storms hit, they will be on your side.

This article is part of our Learning & Development blog. If you're interested in hearing more from us about developing self-mastery and resilience in disruptive times, join us at our Breakfast Seminar at Sadler's Wells theatre this June. Click here to find out more.

Improving Performance Dramatically

London New Delhi New York

Contact Us