Sep 11, 2024
Jeffrey here, friends. I recently returned from two weeks on the road in Guatemala (where I was able to join the outstanding Volcano Summit for the first time) and Brazil, facilitating a series of workshops on leading in uncertainty. I was reminded that international travel provides an excellent opportunity for reflecting on uncertainty—how we approach it, how we respond to it—and the upside of learning to embrace it.
When it comes to travel, I’m a planner. I do my research. I make packing lists. I’ve been known to draft pretty detailed itineraries, all in service of my goal of maximizing the value of my time in a particular place. And yet (and yet!), if you ask me about my best trips—the most memorable ones, the most exciting, and especially the ones where I grew the most—they’re almost all trips where things didn’t go according to plan and where I was, instead, able to step into uncertainty and realize some unexpected possibility or opportunity.
Individuals and organizations are strikingly alike in this way: Both tend to seek and prioritize certainty (for good reasons) but also benefit from embracing uncertainty (for good reasons). Clinging too tightly to the former risks missing out entirely on the richness of the latter. Exploring organizational postures toward certainty and uncertainty gives us another useful way of understanding the challenges that companies and their leaders face in driving transformation.
In his book, Pascal lays out a set of four key traps that organizations fall into time and again in their efforts to build the future, and lately, I’ve been thinking about how these map onto the ability—or inability—to work effectively with uncertainty.
The first trap is the Fear of Cannibalization. A firm hesitates to invest in or implement a new innovation or business line for fear that it will eat into the core revenue driver(s). Here, the firm is rigidly maximizing the value of a certainty that it has established, rather than exploring the uncertainty where the firm’s future optima will have to be found.
The second trap is the tendency to leverage what you have. A firm hesitates to invest in or build what’s needed for the business of tomorrow because its leaders feel beholden to the infrastructure, systems, etc., of the business today. Here, too, there’s an underlying assumption that the cost of moving on from the certainty that the firm has established will be greater than the opportunities for growth and sustainable relevance to be discovered in exploring the uncertain space of possible futures.
The third trap is the Corporate Immune System. This is our catch-all for the set of processes and systems that a firm has developed over time to sustain a profitable “steady state” at scale – a useful evolution that eventually becomes a powerful mechanism for maintaining the status quo and resisting change. The Corporate Immune System effectively exists to reinforce certainty and reduce exposure to uncertainty.
The last trap, which Pascal calls the Time Horizon Fallacy, is a little more complicated (read the book, friends!), but to give us a useful simplification: A firm’s near-term priorities (Horizon 1) are often at odds with those of its longer term (Horizons 2 & 3). It’s difficult to pursue both effectively at the same time and impossible to do so with the same mindset and metrics. More often than not, the near term wins out at the expense of investment and potential growth in the longer term. Here, I see Horizon 1 leaders as naturally seeking and prioritizing certainty, while Horizon 3 leaders – by definition – explore the uncertain future looking for new opportunities to create value. Both orientations are critically important, but the divide between them poses a formidable challenge to effective strategy and even communication.
Organizations that hope to learn transformation as a skill will have to develop a sort of ambidexterity – moving between certainty and uncertainty, seeing the importance of seeking and prioritizing the former at times while not forgetting that the unanticipated value of the new/next is going to be found in the latter. As for the individual, this is how the organization sets itself up for the most rewarding journey and begins to close the gap between seeing the future and actually being the future.
@Jeffrey
