Strategic Thinking (Part 2): Framing Decisions with the Four Types of Ambiguity

3D: Rodin's Thinker

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| Read Part 1 | Read Part 2 | Read Part 3 | Read Part 4 | Read Part 5 |

As strategic initiative leaders, our job is to drive the strategic initiative forward. We do that by facilitating or making decisions. Ambiguity affects decisions because we might select the wrong decision frame and respond improperly to the data at hand. Ambiguity characterizes strategy and involves interpreting words and situations that have multiple meanings (see my previous posting). Good strategic thinkers are strong minded; they cope effectively with ambiguous information. They know that ambiguity is the rule, and not the exception.

Contrary to orthodox advice, we may not need more data; we may need more perspective to select the right decision frame.

The following four types of ambiguity are typically present in strategic initiatives:

Type

Description

Ambiguity about Outcomes When different stakeholders define or desire different results from strategic initiative, you have ambiguity about outcomes. Outcomes are expressed as a trendline of business performance.
Ambiguity about Methods There are countless methods, practices, and techniques that might be employed within the strategic initiative. None of us can know about all possible tools. Most people have a favorite tool that they champion by calling it a best practice, regardless of the tools suitability for the situation.
Ambiguity about Metrics  There are countless things that we can measure, and stakeholders have different opinions about the appropriateness of performance measures. It is somewhat related to the ambiguity over outcomes category. Some organizations use workload or process indicators rather than results or outcome indicators.
Ambiguity about Priorities This kind of ambiguity has to do with differences of opinions on the importance of goals and activities.

Use these four types to gain perspective, in particular recognizing that each individual stakeholders may have a different point of view. Engage your stakeholders and clarify expectations.

A Self Test: Which Kind of Ambiguity Is This?

Here are 4 examples of strategic initiatives that you can use to evaluate your understanding. Which of the four types of ambiguity is present? (Answers are found in the comments at the bottom of the post, just above “related articles”).

Example  #1 – A consumer products company launched an initiative to improve the new product development process. The VP of Sales wanted the initiative to improve the entire enterprises sales revenue through a larger product line: have a product available for each and every customer. The operations department wanted less complexity and more “lean,” which could be best achieved through standardization and volumes.  The CFO had yet a different set of needs.  Collectively, there were numerous different goals reflecting each stakeholder’s organizational silo.

Example  #2 – An IT strategic initiative floundered because one group was more comfortable with the traditional business requirements document; whereas another group argued “agile project management” would be the tool of choice.

Example #3 – A company established a bonus system for its employees based on the company’s global profitability. Unfortunately, people didn’t align their efforts because market forces were the major driver of profitability. Further, only a handful of people were in a position to make investment decisions.  Even worse, there were isolated cases of employees enriching themselves (and defrauding the company) by cutting their side deals due top poor financial controls.

Example #4 – Faced with an economic downturn, managers in a company argued for a cut back on its R&D investments, prioritizing cost savings over growth and innovation.  Others argued that the priority should be to “stay the course” for the inevitable improvement in the economy.

It’s a mindset

These four types of ambiguity are not an intellectual curiosity; they go to the heart of decision making. Consider:

  • Strategic thinkers assume that ambiguity is present and use questions to clarify the ambiguity. Good strategic thinkers have mindfulness. They ask,

Am I asking the right questions?

  • Strategic thinkers first clarify the decision frame, then they move into the activity of information gathering. Ambiguity characterizes strategy. It is the job of the strategic initiative leader to drive the initiative forward by making good decisions to manage the obstacles and opportunities.

How have you found the crux of the matter and managed ambiguity?

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About Greg Githens

Vice President of Strategic Initiatives. a.k.a., The Strategic Thinking Coach. I'm a hands-on strategy & execution consultant with experience in driving change in Fortune 500 and mid-size companies through strategic initiatives and business transformation. I'm available for extended or short-term engagements. For an introduction to pragmatic tools that turns vision into results, attend my popular seminar, "Leading Strategic Initiatives (Program Management)."
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8 Responses to Strategic Thinking (Part 2): Framing Decisions with the Four Types of Ambiguity

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