I like traveling—whether it's for business or for leisure. Discovering new places is particularly interesting—each of them has a story that has shaped them to some extent. I like to watch people in city squares or streets and wonder what their day is like. Where are they going, what problems do they have, or what new things will they encounter today? I love to travel without a specific plan—without 'checking off' the next attractions that are 'must-to-be-seen'.
However, when children come into your life, your traveling starts to look different—you can't really afford to plan 'on the fly' anymore. When planning a trip, you must prepare for various eventualities—what if a child falls ill, how to entertain them during a long airplane journey, or how many extra pairs of clothes to bring. No matter how long you spend on preparations, something will always surprise you. The toy you spent two days searching for might not appeal at all and be discarded after just four minutes of play. Your child could fall into a puddle, and suddenly you realize that although you packed spare clothes, you didn’t include an extra jacket or shoes. Life is full of surprises and unpredictability.
The same holds true in business.
It's impossible to prepare for everything. A potential client you’ve been working on for the last two years might suddenly choose a competitor’s solution. Your key employee might leave, despite assuring you in the last meeting that this was the perfect place to work and he wasn’t even considering a change. Your supplier goes bankrupt, and you have no sensible alternative for him.
We live in a world where changes occur at a frenetic pace. Every day, we are bombarded with news about failing companies, amazing startups, or new technologies that we absolutely must apply in our businesses.
How much can we really prepare for all the things that can possibly happen?
We simply can't.
But in the same way we plan our trips and consider different scenarios, we can prepare for the future that is visible on the horizon. These are the four things that may help you in handling uncertainty:
Push For a Broader View:
Tony Fadell in this book “Build It” mentioned that:
“CEO and executive team are mostly staring way out on the horizon - 50 percent of their time is spent planning for a fuzzy, distant future months or years away, 25 percent is focused on upcoming milestones in the next month or two, and the next 25 percent is spent putting out fires happening right now at their feet”.
The more you look around, the broader your perspective will become. You need to understand different areas of your life and business—how do they influence each other, and what external factors do they depend on?
What is happening in your market? Are there any specific trends that shape your customers' demand? What are the concerns of different departments in your company? Where do they struggle?
The more you see, the better chances you have of including all necessary pieces in developing your strategy.
Think In Probabilities:
While of course everything can happen, not everything can happen with the same probabilities. Preparing for everything may not be possible (given resources you poses), but you can prepare for things that are likely to happen.
This is the essence of scenario planning. It requires understanding various potential outcomes and evaluating their likelihood. Don't hesitate to make educated guesses—as you gain more experience, your predictions will improve.
A useful strategy is to not only assign probabilities to different scenarios but also to document your reasoning in a journal. This allows you to reflect on and refine your thought process over time.
Laying out different scenarios on paper may also help you in developing your strategies, as it might happen that some strategies address several scenarios.
Embrace Unknown Unknowns
No matter how hard you try, real life will always surprise you. That’s why your scenario list is never fully completed. Unknown unknowns are things you’re not aware of or simply cannot predict.
The job is to make this area as small as possible—by running different brainstorming activities to imagine unlikely and out-of-the-box scenarios, which may bring some unknown unknowns to light.
One such example could be running red teams, where you gather people with different perspectives and try to find flaws in your strategy—looking at every possible angle and considering adverse scenarios.
Back to First Principle
First principle thinking is a method of problem-solving that involves breaking down complex problems into their most basic, foundational elements and then reassembling them from the ground up. This approach is rooted in the philosophy of Aristotle, who advocated for understanding things by identifying their most fundamental principles.
We live in a fast-paced world where we usually don’t take enough time to question our assumptions. Why do we do certain things? Why do we think it’s important? What are the basic truths or laws about a particular problem or system?
The "Institutional Imperative" is a term Buffett uses to describe the tendency of organizations, particularly large ones, to follow unproductive patterns or decisions simply because other similar organizations are doing so. He has discussed this concept in his annual letters to shareholders, criticizing how businesses often imitate the actions of their peers, regardless of rationality or the results.
Buffett advocates for making decisions based on sound reasoning and available evidence, rather than following the crowd. This approach is about questioning assumptions and avoiding the pitfalls of herd mentality, which is somewhat similar to what red teams aim to achieve by providing alternative viewpoints and challenging existing strategies.
Stripping away different layers from the problem at hand is a very useful way to get to the core of a challenge and develop a strategy from there.
Life is somewhat unpredictable.
We cannot predict with 100% certainty what tomorrow will bring, and this awareness is very uncomfortable for many of us. We want to know. But it is worth stopping and wondering whether we are thoughtlessly following certain patterns that have long lost their validity or are simply useless in a given situation