The Fundamental Problem in Management

Timothy Kastelle —  March 20, 2013

 

Uncertainty

The fundamental problem in management is that the world is uncertain, and people hate dealing with uncertainty.

The result of this that they go to great lengths to provide themselves with the illusion of certainty. The Bed of Procrustres by Taleb, which I discussed previously, is primarily concerned with the problems caused by false certainty.

The problem with requiring certainty is that when you do, you fail to act. If you have to know in advance whether or not your innovation will succeed, you won’t innovate. If you have to know in advance whether or not your co-workers will perform, you won’t delegate. If you have to know in advance whether or not your idea will be accepted, you won’t put it forward.

All of the bad aspects of bureaucracy come from trying to build systems that provide certainty in a world that is by its very nature uncertain.

The more businesses I work in and talk with, the more convinced I become that the single most important management skill to develop is a tolerance for ambiguity.

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Timothy Kastelle

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Timothy Kastelle is Senior Lecturer in Innovation Management at The University of Queensland Business School in Brisbane, Australia. He studies, writes, teaches and consults on the topic of innovation management, with a focus on how to drive growth through innovation.  You can find him on Twitter or at his personal blog, Innovation for Growth.

14 responses to The Fundamental Problem in Management

  1. Timothy,

    Great post. I just finished Taleb’s Antifragile which further developed my understanding that by embracing turbulence or uncertainty, we can unlock entirely new opportunities within it.

    I too have recognized within clients a need for certainty, and an anxiety around ambiguity. I must confess that until a few years ago, I myself suffered this malaise that keeps you in status quo.

    I have noticed it is highly prevalent among those of us motivated highly by achievement. It’s much more difficult to see our achievement on the horizon when the horizon is uncertain. I used to derive value from achievement rather than learning and growth. What are your thoughts on this connection?

    • Hi Jessica – I think that’s a good point. It does afflict achievement oriented people (and creative ones as well). I’m not sure if the prevalence is higher in these groups because I see uncertainty avoidance all over the place, but it definitely has an impact when you’re making things. As soon as you do that, you crank up the levels of uncertainty – in fact you are almost courting it!

  2. Simple, direct, well done. Believe you are on to something here so keep going!

  3. I completely agree with you Timothy, a long time ago I learned that “wisdom can’t be taught”

  4. Hi Tim completely agree with your point. Ambiguity is so feared in most firms. I am always surprised that scenario planning is not used more. Although I do not think we need to be sure of the future, understanding, at least plausible futures may ease the minds of senior executives.
    My belief though is innovation thrives in uncertainty and ambiguity. Markets are inherently risk adverse but you just need to look at the clustering effect in innovation centers like Paolo Alto, Seattle and more recently Vancouver, to see how entrepreneurs are embracing uncertainty and therefore have a higher appetite for risk, and even failure.
    @stuartbowyer

    • Thanks Stuart. That’s a great point about scenario planning. It is a seriously underutilized tool. It’s one that I’ve used and that I encourage others to use regularly.

  5. Uncertainty certainly create fear and 90% of fear never come true. When in uncertainty, we thought we know the problem and develop the action. See the key issue is not what we know or what we don’t know, but we know is ain’t so. In such that we create a solution that is solving the wrong problem. Example will be the carbon emission issue, livestock actually contribute more than automobile; but there are more noise on car than on cow.
    Livestock Account for 51% of Greenhouse Gases http://tiny.cc/gj8auw
    Are Cows worse than Cars: http://tiny.cc/fm8auw

  6. I agree, and think ‘tolerance for ambiguity’ goes hand in hand with interpersonal trust. If the management and staff don’t have a mutual trust, then no one takes responsibility, without which there is no action and no results. It’s possible to catch some fish to feed your family from the shore, but if you want to catch the big fish and feed the village you need to get out of the harbor and into the uncertain ocean. Einstein said ‘A ship is always safe at the shore, but that is NOT what it is built for.’

  7. Most of the planning models are deterministic. They help in enveloping the variables of a problem in limits, and make decision making easier.

    Planners make provisions for uncertainties with buffers. The only glitch is that buffers which don’t get consumed appear as eye-sores to the “cost-conscious” senior management team.

    In a bid to earn brownie points and promotions, planners try their best to minimize “under-utilization” of resources. All unused buffer resources are considered to be under-utilized, as the perception that “any resource not contributing to the bottom line is not worth keeping.”, exists in the minds of those who control the purse strings of many a planner. Herd mentality takes over as people find more strength in numbers than in reason. Logically, therefore, they look at ways to reduce the deployment of buffer resources. What better way, than to predict everything well in advance and account exactly the right quantum of resources ?

    Little wonder that clairvoyance has always captured the imagination of man ever since life began.

    These views changed the minute I fell in love ! My girl made me realize that only the risk averse demand certainty. There is very little certainty in nature. Yet, we feverishly look for something with a remote possibility of existence.

    I wanted to act only after listening to her “yes” in no unclear terms. In other words, after being certain that she liked me. She, wanted me to act first and display “boldness” in the face of ambiguity.

    A saying in my language goes to the effect that he who is burnt of milk will ensure milkshake is cold before drinking it. But, such a man will rarely become a commander of men. Because, he doesn’t have the requisite skills to solve the problem at hand.

    As they say, a well equipped soldier, can fight better. But, isn’t that exactly what certainty is all about ?

    A soldier is equipped in anticipation of a combat within an envelope of time, weather, logistics and other extraneous conditions. Factoring for a lot of uncertainty would increase his load and decrease his efficiency and effectiveness by wearing him down.

    Neglecting a vital uncertainty could prove disastrous. So, what must a planner do ?

    Soldiers must be trained to handle uncertainty. Right !! What implication does this learning carry ? Planners need to devise suitable training modules and leave execution to these trained magicians and gods.

    Doesn’t the dichotomy strike hard ? Accept uncertainty but only after limiting it to acceptable limits in a bid to increase your efficiency.

    How does one do that ?
    Ancients used a crystal ball. We use computers. Its that simple.

    What am I to do with my girl ? .. Pamper her ! The kind of person she and Tim are referring to is a leader and not a salaried planner. That kind, who shows decisiveness in the heat of the battle. Who doesn’t mind deciding the future course of life-altering action on the basis of incomplete data.

    How does one get into action mode in such a situation ?

    Simple. Believe in yourself, act decisively, have faith in god and accept all responsibility for the consequences of your decision (display moral as well as physical courage)

    To believe in yourself, you need to build your inner reserves, become self-confident and learn to see failure and triumph as two sides of the same coin.

    Now that I know what it takes to win her back, let me log out and get her !

  8. Nice one Tim!

    It comes down to Problem Solving. If problem solving capabilities are developed within and across an organisation and its network, then any uncertainty can be dealt with. Lean companies have proved it over and over (Toyota in primis). A relevant book on this subject is “Chasing the Rabbit” by Steven Spear http://amzn.to/ZJiDrt.

    Problems and uncertainty are not there to be fixed or resolved, but to learn from. Results and achievements are a by product.