Decision making is both art and science, this is particularly true in uncertain times.
The pace of change is accelerated both in businesses and the entire human society, either as individual or organization, the uncertainty of outcomes or occurrences is inherent in almost every endeavor. In fact, we are reaching the digital era with “VUCA” characteristics (Velocity, Uncertainty, Complexity, and Ambiguity.) How to deal with the new normal and improve decision-making effectiveness in an uncertain time?
The pace of change is accelerated both in businesses and the entire human society, either as individual or organization, the uncertainty of outcomes or occurrences is inherent in almost every endeavor. In fact, we are reaching the digital era with “VUCA” characteristics (Velocity, Uncertainty, Complexity, and Ambiguity.) How to deal with the new normal and improve decision-making effectiveness in an uncertain time?
The impact of uncertainty can be, at least in part, addressed by research and knowledge: Uncertainty and risk are inherent in the marketplace; uncertainty and risk are inherent in every venture. "Uncertainty," is a future event that can be mitigated by the acquisition of new knowledge or facts. If you can plan beyond the first point of uncertainty in a project, if you cannot see past that point, but admit to this helps to reduce the risk of uncertainty. The impact of uncertainty can be, at least in part, addressed by research and knowledge. Uncertainty is essentially a lack or void in the current knowledge base. Uncertainty is caused by unknowns - not identified within the scope of the plan, or unknowable - beyond the knowledge and understanding of the decision-maker. There's nothing to be done about uncontrollable situation although a good plan or comprehensive research including information collection and knowledge sharing can identify the external factors or pinpoint blind spots, and the systematic decision-making process can enable the decision-makers to work around the externals, leverage variables, and make the trade-off to migrate risks in the time of uncertainty.
Make a contextual translation of uncertainty vs. risk - from “how to deal with uncertainty" into "how to reduce the degree of uncertainty": There are several kinds of training for uncertainty; uncertainty is about the extent or limitations of current knowledge. Uncertainty suggests a state of mind -cognition. Uncertainty is to overcome in action and in view of the potential for errors. Uncertainty per se is not a problem, it poses a risk for those who have a fixed mindset and creates opportunities for those with a growth mindset. The risk is something one can plan and mitigate. Uncertainty is not something you can plan for or mitigate. Uncertainty is a component or a subset of risk (albeit something that cannot be mitigated), so within 'risk' there is uncertainty. Essentially, from a business perspective, the difference between uncertainty and risk is that risk is quantifiable while uncertainty is not quantifiable (or hasn’t yet to be quantified). To make better decisions in the uncertain time, it’s important to make a contextual translation of “how to deal with uncertainty,” into “how to reduce the degree of uncertainty,” and mitigate risks for making the best possible decisions.
Effective decision making in the face of uncertainty is dependent on leadership effectiveness and maturity: Effective decision-makers supplies the framing context in understanding uncertainty and it needs to have a culture of leadership that encourages optimism, tries to incorporate the uncertainty via using modeling tools, scenario planning, and team decision-making. Of course, leadership plays an important role in dealing with uncertainty. Leadership is an element of management that can help mitigate the impact of uncertainty/risk by enabling a team to encounter uncertainty, make better decisions, and deal with uncertainty strategically and systematically. The belief is in a vision, or in the leaders. We can not predict anything beforehand but can imagine with many experiences involved in current or in the past. Uncertainties are a common occurrence in any walk of our progress, be it social, professional, or personal life. We can make provision to meet any eventuality.
Decision making is both art and science, this is particularly true in uncertain times. Guts feeling and information collection & analysis, leadership, and teamwork, scenario planning, and processes, are all crucial elements in improving decision-making effectiveness to deal with the issues of 'uncertainty' within major projects, enterprise scope, and ecosystem.
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