The authors of the book Mastering Uncertainty, Matt Watkinson and Casaba Konkoly, strongly argue that we live in a world of complex systems whose behaviour is inherently unpredictable and uncontrollable.

We don’t have an innate feel for the randomness, probability, or properties of complex real-life systems that shape our modern world; we tend to imagine that our environment is within our control, and events have logical explanations.

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This is far from reality. Further, given that errors and accidents are unavoidable, all of these eventually culminate with outcomes that are far more unpredictable than we think!

Compounding the complexity is the problem of human behaviour that is fraught with biases and irrationalities, leading to the unpredictability of outcomes.

With strong hindsight bias, our tendency to see events as having been predictable once they’ve already happened — distorts our perception of our predictive capabilities, deludes us into thinking we know more than we do and wreaks havoc with our risk calibrations.

Let’s say, for example, when applying for a job and reaching for an interview, one may believe he or she has the best credentials, meets all the job description requirements, has a well-polished resume, full awareness of the company he or she is applying to, its business and its competitors, and above all has reached the venue ahead of time to avoid any delays.

In spite of all this whether he or she will secure the job has a lot of uncertainties; inability to comprehend the political landscape within the company, calibre of the other candidates, interviewers’ personal agenda, and his equation with the other candidates and above all, if the interviewer’s opinion as to where he or she is over-qualified or under-qualified for the job!

One does not have control over any of these factors and hence drives up the level of uncertainty! ‘Chance’ hence plays a vital role in the nature of outcomes; personal or business!

The authors argue that most business theories and management concepts, the strategy itself being no exception, that are prescriptive approaches, are inherently faddish and their popularity depends more on whether they can be monetised by academics and consultants than on their effectiveness!

By approaching business as an exact science, we often ignore or denigrate the creativity, serendipity, and probabilistic thinking behind our biggest success!

Adverse outcomes

All said, given the power of ‘chance’, the irony is that great actions, or the smartest decisions, many a times lead to adverse outcomes. In the same spirit, poor actions can potentially end up as successful achievements!

In effect, most of the success in the real world comes from serendipity, happy accidents, and taking risks that have a potential for non-linear profits.

While traditional managers use calculated cleverness to avoid taking risks, the real winners take calculated risks with supporting cleverness! In uncertain environments, it is better to focus on ‘learning goals’ rather than ‘performance goals’.

With so much uncertainty impacting intended outcomes, both, due to complexities in the external environment as well as due to our own sub-optimal actions, it is therefore sensible for us to ‘make friends’ with ‘chance’ and exploit the same, rather than getting too worried about uncertainty!

‘Uncertainty’ is an opportunity and those who are able to tame ‘chance’ achieve a competitive advantage!

So, how do you make friends with ‘chance’ and embrace uncertainty? Including a ‘probabilistic dimension’ becomes the key! Let me elaborate.

  • To survive in such an uncertain world, we must actively cultivate five attitudinal dispositions; first, a healthy relationship with failure. There is no choice but to take risks, which in effect could lead to failures.

However, avoiding failure at all costs limits the scope of our successes. We grow by learning, but we learn by doing. To succeed, we must take action, possibly with a question, what’s my downside? Expert entrepreneurs test their ideas using the principle of ‘affordable losses’ to limit their downside, rather than setting a desirable return on investment!

  • Second, adopting a growth mindset; a belief that our qualities and abilities can change and grow.

Being coachable, open to learning from experts, and recognising the important difference between someone ‘criticising us’ and ‘criticising our work’ helps to tame the ego and thrive on feedback from others. Successful enterprises tend to pursue growth through increasing revenue rather than cost reductions!

  • Third, the tenacity to keep trying. Perseverance is key; especially when we align ourselves our passion and interests.

Along with a growth mindset and a mastery of the craft we practice, our unique interests, personality, and disposition are inimitable assets! Reconciling to the fact that things, by their very nature, will not go the way we imagine, makes it easier to take adverse events in our stride.

  • Fourth, a commitment to truth-seeking. Pursuing flawed ideas with great commitment will not make them a success.

We must become insatiable truth-seekers relentlessly challenging and recalibrating our own biases and beliefs, assessing our information for accuracy, seeking a plurality of perspectives, and then adjusting our plans accordingly.

  • Fifth, the pursuit of mastery.

All of us hone a craft or two, in our lifetimes; reaching for excellence in such crafts will put us in a very different league from our counterparts. Mastery is a deep desire to keep improving at something; it not only leads us to outperform others, but it also keeps us pliable and better able to thrive under uncertain conditions.

Since serendipity plays a vital role, investing in social capital helps us increase our exposure to serendipitous outcomes.

The more interactions and business relationships we have, and the more people we have them with, the more possibility there is for opportunities to arise. The single most important principle that can help us accumulate more social capital, is to be a ‘host’ in life, not a ‘guest’!

  • In conclusion, a ‘host’ mentality is a genuine desire to be helpful with no expectation of reward, attentiveness to individual needs, making others feel welcome and valued, generosity, and connecting with other people who might be useful to one another.

It also helps when we mention our passions, interests, and hobbies while introducing ourselves to others; it projects us as being distinctive and memorable and thereby increasing the likelihood of discovering common ground that can lead to interesting conversations.

Anything that dents our social capital should be avoided at all costs; reputation is precious and a fragile asset that must be protected. Treat every relationship as long-term!

(Dr Suresh Srinivasan is Distinguished Professor (Strategy & Accounting) Great Lakes Institute of Management Chennai)

Mastering Uncertainty — How great founders, entrepreneurs and business leaders thrive in an unpredictable world
Authors: Matt Watkinson and Csaba Konkoly
Publisher: Cornerstone Press
Pages: 288 
Price: ₹799

Check out the book on Amazon.

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