Uncertainty + Ambiguity & Strategic Thinking

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Ambiguity and uncertainty are different concepts that affect the execution of a strategic initiative. As I explained in earlier articles (A Fight With Ambiguity, Framing Decisions, and Two Tools for Strategic Context), ambiguity has to do with multiple meanings and is an essential quality of strategy formulation.

Examine the graphic at the top. The picture on the right is titled, “My Wife and My Mother-in-Law,” (W.E. Hill, 1915). It is an example of a style called “pictographic ambiguity,” because it cleverly incorporates two images. If you can’t see the two portraits, notice that the chin of the young lady is the nose of the old woman.

Uncertainty has to do with a lack of precision in estimates, and it is the focal point of classic risk management because it has to do with an event, a probability and an impact.

For an example, examine the left side of the graphic. It is a hurricane forecast for 2005’s devastating Hurricane Katrina. This graphic is the output of a computer model of the
storm’s path, showing probable position at different points in time in the future, based on meteorologic data, physics, and sophisticated computerized forecasting models.  The graphic illustrates a “cone of uncertainty.”

The Questions Leaders and Managers Ask

Leaders lead by asking questions and those questions reveal priorities and mental models.  Given the distinctions, here are two kinds of questions that you might ask:

• You ask explicit questions. In this instance, you seek answers that reduce uncertainty.
• You inquire to find new perspectives. You wonder if you are asking the right questions.  Here, you seek to reduce ambiguity.

The two text boxes provide examples of questions that reduce ambiguity or uncertainty.

Ask these questions to get a handle on ambiguity

Both kinds of questions are important and useful. However, from my experience, the questions that address ambiguity are those which make or break strategic initiatives.

Ambiguity, Schm-ambiguity!  The Paradox of Ambiguity Avoidance

People in organizations are  well practiced at recognizing and working with uncertainty.  In their managerial role, they make budgets,  establish prices, forecast results, and make decisions based on limited  information.

Many people are practiced at  ambiguity avoidance and work in well-defined processes (that allow uncertainty,  but not ambiguity). Because they are not exposed to ambiguity they lack the knowledge and skill to recognize it. What a paradox!

You will find people who will  be dismissive of the semantic. It is true that defining distinctions between  words can get tedious. However, communications are an essential competency; we must pay attention to language.

Tips for Managing Uncertainty

I have previously discussed  how to recognize and work through ambiguity. Fundamentally, you manage ambiguity  through sense-making dialogue and deliberation.

Fundamentally, the core of uncertainty management is to understanding the models you’ve selected.

A hurricane forecast involves  real-world data and experts. Leaders adopt an experimental mindset to cope with uncertainty and bias.  When you are making sense out of uncertainty you should:

• Be data driven – Uncertainty  is reduced by gathering more data
• Recognize that  models are weighted differently. This weighting reflects the developer’s  judgment as to the importance of different parameters.  All models have a bias, and the bias can be  mathematically understood.  That is why increasingly, you see hurricane forecasts that show the predictions of each of several models.

Often, there is wasted energy  in slicing and dicing the data. Watch for analysis-paralysis.  I faced this with a bunch of electrical  engineers at Motorola: I wrote a sign: the purpose of analysis is insight for improvement. The key here is that the insights need to help a decision  maker know where to focus their scare resources. Thus, the analysis needs to  generate insights, and those insights need to be valuable.

You now have an appreciation for the  distinctions of ambiguity and uncertainty. Do you see how both leadership and management apply to strategic initiatives?