If you’re stuck…guess

When we pull together a strategy – we’re guessing that a particular course of action will reap a desired outcome in the future. When we choose a course of study we’re guessing it will prove interesting, useful and lead us to a future worth pursuing. Sometimes we’re guessing on the exams too – I know I was. When we select an investment we’re guessing that this investment will give us better returns than an alternative investment. As the fine print of any disclosure statement will tell you, past performance is no guarantee of future performance.

And so it goes on. Pretty much anything you can name, at some level, underneath all the rationalising, is a guess.

In a complex world such as ours, there is simply no way to know how the future will unfold with any real certainty. Even with all the available data, knowledge of probabilities, or all the inside information, we cannot be sure that the bets we are placing will pay off.

We are guessing. And guess what? That’s ok.

Let’s take one of our big guesses - strategy. As strategic thinker Michael Raynor tells us, strategy demands that we commit to a course of action in order to create and capture value. However, as every CEO will tell you, things rarely play out in a nice straight line - the world generally refuses to cooperate with our carefully laid plans and more or less always throws a spanner in the works at some point. Raynor calls this ‘requisite strategic uncertainty’ – the collision between commitment to a course of action and the uncertainty of our turbulent, unpredictable world.

The underlying assumption of any strategy is (and has to be) that the future is a specific set of inevitable circumstances. We all know it is not.

Rather it is a range of possible outcomes subject to randomness on a scale we generally find it much easier to ignore. Randomness arrives in many forms, not least of which are external shocks – the Christchurch earthquakes, the Covid19 pandemic, cyclone Gabrielle and the Australian Black Summer Bushfires to name a few in my own backyard in recent years. But randomness also arrives covertly. It arrives out of nowhere through the interconnectedness of today’s world.

Take the Renesas fire in Japan 2021 which saw one third of the world’s chip production cut overnight. Meanwhile in Taiwan a coinciding drought meant chip production there was down 7%. At the same time in the United States the Big Freeze in Texas closed chip making plants. When combined with US trade restrictions on Chinese telecoms firms leading to China stockpiling chips, the stock prices of Renesas and car manufacturers reliant on the chips plummeted while the price of microprocessors themselves rose by 61%. And just to keep things interesting, the 400m long Ever Given container ship happened to get stuck in the Suez Canal holding up 12% of the world’s trade and tying up goods (including the precious microchips) worth an estimated US$9.6 billion per day.

Anyone who says they saw precisely all that coming might generously be described as suffering from ‘retrospective coherence’ - a term I first heard from complexity expert Dave Snowden more years ago than I care to remember.

Uncertainty and the turbulence it creates is nothing new. It’s always been there. The difference today is that the pace, scale, and reach of the unpredictability is increasing. Our ‘guesses’, strategic or otherwise, are being subjected to unpredictable events more frequently and from more directions. Complexity isn’t the enemy however, forgetting how to respond to it is.

We can’t remove unpredictability — but we can navigate it. Fortunately, we humans are actually great at dealing with uncertainty, even if we don’t like it much (and we don’t).

We have 5 extraordinary capacities that mean we are uniquely placed to turn uncertainty on its head and not only navigate it, but to take advantage of it.

What are these capacities? They are our ability to:

1. Imagine. To ask what if? How far can we reasonably foresee? What can others see that we can’t? What scenarios might we consider as possible, plausible and probable? The more diverse perspectives we incorporate, the greater things we can imagine.

2. Invent. Given what you imagine, devise strategies and tactics that could be successful under different futures. Invent options that are meaningfully different from each other. Discern which seem reasonable to try.

3. Experiment. To try out options. Where they create value – keep going. Where they don’t – stop. What do the experiments tell you? Think like a scientist as Adam Grant would encourage us.

4. Listen. To everything. This is the art of insight. It includes, but goes far beyond analytics. Be vigilant to how the future is unfolding by spotting patterns and listening to the system. And to yourself. Gary Klein, who spent decades studying how firefighters, emergency room nurses and military commanders make decisions under pressure, found that 80% of decisions in complex situations came from pattern recognition and intuition – essentially, listening to what experience and the situation are telling you. Use yours and that of those around you. As Bob Dylan put it: “You don’t have to be a weatherman to know which way the wind’s blowing.”

5. Learn. Despite how good humans are at learning – we’re very good – organisations in my experience generally are not. The number of lessons learned documents gathering dust doesn’t bear thinking about – I refer to them as Lessons Observed and Ignored documents. But learn we must if we are to reinvent our organisations and meet the demands of the world as it is today. As Peter Senge reminds us, it is “Through learning we re-create ourselves. Through learning we become able to do something we never were able to do. Through learning we reperceive the world and our relationship to it. Through learning we extend our capacity to create.”

The word guess can sound uncertain, tentative, even slightly reckless. But guessing is actually the smart thing to do.

If we accept a world of requisite uncertainty, where randomness arrives from directions we can’t predict and at scales we struggle to comprehend, the best we can do is make informed bets on the future. Call them strategies, call them plans, call them decisions – they’re all guesses underneath.

The organisations and leaders who thrive aren’t the ones who pretend they can eliminate uncertainty through better data or longer planning cycles. They’re the ones who get comfortable with, and good at guessing. They do that by building their capacity in the five critical capacities that help us navigate the unpredictable.

They imagine multiple futures instead of banking on one. They invent options instead of committing too early. They experiment quickly to learn what works. They listen to patterns emerging from the noise. And they actually learn, adapting their guesses as the world reveals itself.

This isn’t wishful thinking or flying blind. It’s recognising that every CEO navigating today’s turbulent world, every leader making strategic bets, is doing the same thing - using experience, intuition, and these five human capacities to make the best guess they can, then adjusting as they go.

The world isn’t going to become less unpredictable. The interconnections aren’t going to simplify. The randomness isn’t going away.

So if you’re stuck, guess.

Make your best informed bet on what might work. Use your remarkable human capacity to imagine, invent, experiment, listen and learn your way forward.

That’s not reckless. That’s smart.

And in an inherently unpredictable world, it might be the only real strategy we have.