As we experience increasing amounts of Volatility, Uncertainty, Complexity and Ambiguity in our world, decision-making becomes more difficult. In Smarter, Faster, Better: The Secrets of Being Productive in Life and Business, Charles Duhigg suggests that the solution to knowing that you can’t have 100% certainty is to think probabilistically. In other words, we need to envision various futures, some with contradictory scenarios, and develop a sense of which forecasts are more and less likely to be true.
Using the example of a person playing high-stakes poker, he notes that the key is to analyze our past choices and ask ourselves: why was I so certain things would turn out one way? And why was I wrong? We need to recognize that while the goal might be the same for each action (e.g., have a winning hand), we need to recognize that they are multiple possibilities, rather than one predetermined outcome and determine the probabilities of each one. Too often our thirst for certainty is so strong, and fear of doubt is too overwhelming, leading us to think we can predict with over-confidence.
As a teacher, I engage in this kind of conversation often now with my students. As seniors in college, they’ve pursued a major and a potential career based on the information that was available over the past three years. Yet, many changes in today’s world make the trajectory no longer certain. For instance, learning finance will facilitate a career in banking. But in a world of automation, doing well will not guarantee a job. As ATMs replace bank tellers, robo-advisors providing investment guidance, and computerization taking over middle-management positions, the probability is that future industry jobs will be very different than they are today.
Indeed, every student needs to look at the probabilities involve with how Artificial intelligence (AI) software capabilities will transform the career paths in all industries, including what were before considered “low” tech (e.g., restaurant-services, and taxis). Finally, in a world where being a teller with a college degree pays less than someone with a high school degree and trade-training (e.g., plumber or electricians), checking the assumptions and probabilities of achieving one’s goals is critical.
In sum, to survive in today’s VUCA world, we need envision many potential futures, and determine how certain or flimsy assumptions really are, if we can to increase the chances of making a great decision next time. How are you handling the increased difficulty making effective leadership decisions – for your life, your company, etc.? Share with us.