How to Make Better Decisions in Times of Uncertainty
Amidst the ongoing COVID-19 outbreak, there is a lot of uncertainty in the business world. Shops are temporarily closing their doors, universities are moving to all-online classes, and supply chains are being stressed as people try to order things like groceries from home. As all of this is happening, it seems like projections for when the outbreak will peak and begin to subside change on a daily basis.
How is anyone supposed to try to run a business under such uncertain circumstances?
The organization still needs to plan, make decisions, and manage risks, especially in an environment of such heightened uncertainty.
Now is exactly the time when companies need to reach out to a consultant.
Decision making and planning for risks are difficult enough tasks under business as usual circumstances. Imagine how much more difficult they become at a time like the one in which we currently find ourselves. More so than ever, now is a time when consulting an expert in risk-based decision making and business analytics is critical to the success of the enterprise.
I wrote an article a while back called “How to Plan when Everything Keeps Changing”. In that article, I mentioned that our business plans and strategies are built upon an “evolving base” (1) consisting of assumptions regarding things like:
1. Goals and objectives
2. Stakeholders, decision makers, and interest groups
3. Organizational, political, and budgetary baselines
4. Reorganization and reallocation of key personnel
5. Requirements, specifications, delivery, users, and clients
Whereas before it felt like our evolving base was fairly stable, now it feels like everything is shifting – as if our evolving base was built on a base of sand!
Additionally, uncertainty can come in different orders of magnitude. On one end of the spectrum, we could encounter a “certain enough future” in which forecasts and projections are generally in the ballpark and point to a dominant strategy. Increasing in uncertainty, we may face futures where there are a handful of mutually exclusive and collectively exhaustive possibilities, or a range of futures which can only be identified by an upper and lower bound. Finally, there might be “true ambiguity”, where uncertainties are unknown and unknowable (2).
It certainly feels like we are approaching the “unknown and unknowable” end of the spectrum right now.
That is exactly why making important business decisions right now is so hard. Moreover, the consequences of making the wrong decision now could be larger than during normal times.
The conclusion? Having someone to guide you through the strategic decision making process in such turbulent times can set you up for success in the future.
Collier Research Systems (www.collierresearchsystems.com) can help you through the task of evaluating an existing plan, formulating a new one, and identifying potential disruptions to the plan.
(1) Haimes, Y.Y. 2012. Systems-based guiding principles for risk modeling, planning, assessment, management, and communication. Risk Analysis, 32(9), 1451-1467.
(2) Courtney, H. 2003. “Decision-driven scenarios for assessing four levels of uncertainty.” Strategy & Leadership, 31(1): 14-22.