Deal with Ambiguity to Thrive in the “VUCA” World ~ Future of CIO

Tuesday, July 9, 2019

Deal with Ambiguity to Thrive in the “VUCA” World

11:05 PM Pearl Zhu No comments

Be flexible and tolerant of ambiguity and leverage System principles to practice multifaceted digital management disciplines.

We live in the “VUCA” new normal with characteristics such as high velocity, diversification, ambiguity, unpredictability, over-complexity, nonlinearity and increased flux. Ambiguity is a term used to describe a circumstance in which an investment is made, but the outcome is uncertain. Ambiguity can be understood as being similar to business ‘risk,’ Though risky events have a known probability distribution over outcomes while in ambiguous events, the probability distribution is not known. In practice, how to deal with ambiguity to thrive in the "VUCA" digital world?

Ambiguity involves the mixed meanings of conditions: In a world where change is significantly speeding up, business leaders couldn’t predict the future with a certain degree of accuracy, ambiguity is the new reality, From the strategic planning perspective, ambiguity involves the mixed meanings of conditions, the strategy can no longer stay static. By setting aside what you now appear to understand or even know, where do you at this stage define reality from assumptions, would algorithms take you further into the understanding of what is actually going on? Highly complex, ambiguous and dynamic environments demand a greater understanding and application of systems thinking - take a natural and holistic way to understand the world, and all its systems and subsystems works. To deal with ambiguity scientifically and make a good strategy, understand the dynamics, work to influence the dynamics, envision alternative scenarios, make decisions or dynamic planning always based on rough estimations of what the future conditions of execution would be. The sheer thought of controlling all is a pipe dream, and shaping a good digital strategy takes attention and energy.

Ambiguity is the haziness of reality, has the potential for misreads: The tolerance of ambiguity means that the business leaders today are comfortable with uncertainty, unpredictability, conflicting directions, and multiple demands. The more complex the situation is, the more different approaches and role gaming is needed to reach for insightful understanding and effective problem-solving. Ambiguity is the haziness of reality and has the potential for misreads. Given the unprecedented level of complexity of the digital business world and given the challenges of today’s business problems, more often than not, the lack of knowledge and scarcity of insight lead to poor problem-solving for the long run. Thus, it’s important to engage people with cognitive intelligence to share their viewpoints, gain insight by seeing things from different angles, open a new perspective, be able to change perspective if necessary, and figure out better solutions to either existing problems or emerging issues.

Ambiguity has cause-and-effect confusion; it’s the dissonance between ideas, but it can also become the “secret sauce” to stimulate creativity: The ambiguity effect is a cognitive bias where decision making is affected by a lack of information (in many cases, the information cannot be obtained) or "ambiguity." It implies that people tend to select options for which the probability of a favorable outcome is known, over an option for which the probability of a favorable outcome is unknown. To deal with ambiguity, it’s important to collect relevant information, capture business insight, define more than one way to achieve the business goals, and take different paths for experimenting and exploring the digital new normal. The good news is that ambiguity can become the secret source to appreciate diversity, stimulate creativity and encourage risk-taking. In fact, the lack of diversity makes organizations non-optimal and turns to be vulnerable to ambiguity. Business leaders today needs to have a certain level of ambiguity tolerance to inspire a culture of innovation and risk-taking, and appreciate different perspectives, different knowledge, and different ways to solve problems.

The digital world is dynamic, nonlinear, uncertain, volatile, and ambiguous, the classic linear management practices based on the reductionistic logic are simply not sufficient to manage the nonlinear digital business. The forward-looking view of the organization is to determine what the future needs to look like and how business leaders can navigate digital new normal smoothly. Be flexible and tolerant of ambiguity, leverage System principles to understand the interconnectivity between parts and the whole, do an in-depth cause-effect analysis, simplify complicated things and deal with the “VUCA” dynamic to achieve the high performance business results.That's the art and science of multifaceted digital management discipline.