Evolving business models, changing technology, and tightening labor markets are enough to cause any company (or individual) to take pause.
It’s natural. The instinctual reaction to uncertainty is to freeze. (Hence, “deer in the headlights.”)
But inaction can’t be a default response.
Retired U.S. general and former CIA director David Petraeus knows how to handle uncertainty at a global level with the highest stakes. Patraeus is now a partner in the global investment firm KKR and spoke with Jonathan Berman of J.E. Berman Associates on managing uncertainty.
Here’s what Patraeus recommends for dealing with uncertainty:
Learn faster than your opponent. The edge often goes to those who can learn quickly. Learning faster than competitors can mean incorporating a “What have we learned?” discussion into weekly or daily team meetings. But it can’t stop there, a drive to change must be instilled as well.
Learning faster also means acknowledging failure and error. The aspiration in uncertainty is not to reduce the chances of failure, but to minimize its costs, and the odds that the same failure recurs. As one successful venture capitalist says, “we try to make new mistakes each day.”
Give less guidance, and save it for the big issues. In uncertainty, more decisions need to be made by those closest to new information. During his military career, Petraeus stressed the importance of the “strategic corporal,” the young leader whose tactical actions could have strategic consequences, advancing or undermining an overall campaign. In conditions of uncertainty, it’s all the more important to push decision-making outward and downwards, towards where new information is originating and where it can be acted on most swiftly. But managers also need to be focused on attracting the right people and training them to make the right decisions.
Be ready to exploit surprise gains. Uncertainty breeds anxiety. Amidst it, we lose sight of the potential for unexpected gains. Uncertainty also breeds indecision in many managers. They defer difficult choices by demanding more data and further study. While data can strip away some uncertainty, it rarely eliminates it. The best managers take the gains and use them to build momentum, make progress, and fortify positions.
Uncertainty is unavoidable. But faster learning, decentralized decision-making, and looking out for unexpected gains can make it more manageable.
Have a great week.
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