How To Make Uncertainty Useful

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The path from impossible, to probable, to new normal used to take years. Now it seems like a new normal emerges every few months. The old is going away faster than the new can replace it, and in our work and personal lives that leaves us in what I call the in-between. To survive and even thrive, we need a much higher tolerance for uncertainty.

The world has become so uncertain that heavyweight economists (including GE’s own Marco Annunziata) have an acronym for it: VUCA, which stands for Volatile, Uncertain, Complex, and Ambiguous. (I’d add another A, for Anxiety.)

Why are we living in a VUCA world? The main cause is acceleration. As our information moves faster, we move faster. We are communicating faster, working faster, innovating faster, and by some accounts even talking and walking faster than we did in previous decades. (No, it’s not your imagination, we’re actually walking 10% faster in cities than we did a decade ago.)

The upside of all this speed is that the benefits of new tech reach more people sooner. It took thirteen years to sequence the human genome for the first time. Now it takes a few hours, which is good news for patients waiting for life-saving genetic therapies.

The downside of all this speed is that it makes it tough to plan for the future. In the 20th Century, a fast food chain could be certain there’d be a market for burgers in ten years. Now, they can’t be sure if your burger will be vat-grown, meatless, or even on the menu by 2027.

We can’t make uncertainty go away. But we can change the way we react to it.

Good things take root when we are willing to look at areas of uncertainty, fully acknowledge them, and see them as opportunities to engage our imaginations and forge creative ways forward. Every uncertainty is also a new potential future.

When seen in this light, uncertainty doesn’t need to be a source of anxiety, but a signal that it’s time to get ready for change.

Here are three ways I’m experimenting with harnessing uncertainty.

1. Make more bets

At GE we don’t just dream in color, we dream in scale. But we’ve had to learn that when we plan for the future, we put our people and capital on a lot of small bets, not just a few. That frees us up to constantly evaluate each bet, and stay poised to scale up the ones that turn out to be useful. Because the bets are small, we’re also free to kill the ones that aren’t working anymore and put our resources elsewhere. It’s an agile and efficient way of working.

Our bets on additive manufacturing, renewable energy and new cell therapies all started out small. They’re paying off now because we nurtured the seedlings of those ideas well in advance of when we needed them to grow. In an uncertain world, the road to success looks like smaller teams of the right people working in stages.

You don’t have to be seeding a new business to place smaller bets. It starts with this: remove the pressure to find the one big idea, and instead generate a lot of ideas, and then filter them against the goal. Test and learn. It’s the same for projects and initiatives too. Be clear of the intended outcome, launch a group of smaller pilot projects, then see which ones are more likely to work.

2. Shorter operating windows

In an uncertain world, if you take too long to plan how a product or service will be provided, it could become obsolete during the process.

That means we need to plan for services to be delivered in shorter chunks of time, with more data feedback loops. And build in flexibility that allows us to scale up, scale down, toggle on or off, or even deploy services in totally new directions depending on the feedback we get.

On the teams I work with, we’re trying to make our budgets more flexible, for example. The first step is to ask “What’s needed to get us just to the next stage?” And then, depending on the answer, we have to be willing to actually adjust how much we spend. We haven’t stopped estimating how much the whole project — all the stages together — will cost. But we are challenging ourselves to evaluate more often and adapt faster. It’s tough, but it keeps us poised. And it helps us find every way possible to use variable cost methods, which keep what we spend closely aligned with reality.

Business terms and contracts are other areas that are due for shorter operating windows. Contracts can take too long to finalize when both sides try to solve for every eventuality. A more realistic approach is to establish something like a set of running rules for a working relationship, and agreeing on conditions for regular reassessment, triggered by future changes. (And the future will always, always change).

This approach has actually changed the way I think about long-range plans. After all, what’s a long-range plan, really, but a prediction about the future? You need a long-term vision to keep moving forward, but you also need to acknowledge that predictions don’t always come true.

3. Less assumption, more hypotheses

The word hypothesis sounds authoritative, but it actually means the opposite. In science, a hypothesis is a conclusion formed with limited evidence, to use until you find something better. It’s a starting point, not an endpoint.

In our accelerated world, we’re best served by taking stock of our assumptions and transforming as many as possible into hypotheses.

On my teams, two questions I try to ask more often are “What’s the hypothesis?” and “How will we know if it’s true?” Thinking this way takes the pressure off, because we don’t feel like we have to know something that isn’t yet knowable. We’re free to let the future be the future.

What’s improbable or even impossible today might well be the new normal in six months. When we see most of our worldview as a starting point, the new normal is bound to be less shocking. The surprises and disruptions around every corner become reminders that the best way forward is to stay in motion.

How do you thrive in an uncertain world? What impossible things do you think will become our new normal?

Originally published on LinkedIn.