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Managing in Uncertainty: Leading Through Change When the Future is Not Predictable


In today's rapidly changing business environment, organizational leaders are constantly challenged with managing when the future is unclear. The pace of innovation continues to accelerate and disrupt entire industries. Global events create economic and geopolitical instability. Emerging technologies transform the competitive landscape in unpredictable ways. As a result, strategic planning periods continue to shorten and future outcomes become increasingly difficult to predict with any degree of accuracy or certainty. However, organizations must still advance, adapt and succeed despite unclear futures. This requires a new paradigm of leadership that embraces uncertainty and positions the company to be agile, responsive and resilient through change.


Today we will explore the research on managing in uncertain times and proposes practical approaches leaders can take to effectively guide their organizations when the future is unclear.


Managing Uncertainty: Foundations and Frameworks


There is a growing body of research exploring how organizations and their leaders can navigate uncertainty. According to Courtney et al. (1997), managing in uncertainty requires an unconventional mindset that accepts ambiguity and sees it as an opportunity rather than a threat. Leaders must view uncertainty as the "new normal" rather than an exception or temporary condition. They propose that success lies not in attempting to eliminate uncertainty, but rather in developing an organizational culture and processes that embrace it. Bazerman and Watkins (2004) expand on this, stating that leaders should frame uncertainty positively as a chance to explore new possibilities rather than negatively as a risk. They suggest reframing uncertainty does not mean being unrealistic about challenges and constraints, but rather maintaining an overall constructive perspective focused on opportunities versus obstacles.


Camillus (2008) developed a framework for strategic management under uncertainty consisting of three key elements:


  1. Developing broad strategic options rather than committing early to specific paths,

  2. Continuously monitoring emerging trends and internal/external changes, and

  3. Maintaining organizational agility and adaptability through rapid decision making.


Together, these elements position organizations to respond effectively as conditions evolve in uncertain environments.


Heads Up Management: Scenario Planning and Contingency Strategies


Scenario planning is a useful management tool for leading in uncertainty. Rather than relying on predictions or assumptions, scenario planning involves carefully considering multiple potential futures and developing strategies applicable to each (Schoemaker, 1993). The goal is not to predict precisely what will happen, but rather have a "range of vigorous scenarios" that prepare the organization for various plausible outcomes (Van der Heijden, 1996).For example, a technology company facing uncertainty in global markets and regulations could develop scenarios such as:


  • Continued growth with few new policies or trade barriers

  • Moderate growth but new data privacy laws in key regions

  • Economic slowdown and increased protectionism globally


Contingent strategies aligned to each scenario help maintain strategic flexibility when the actual future does not match assumptions. Regular scenario reviews also keep plans dynamic to emerging changes. Scenario planning thus provides strategic "headspace" for organizational agility and optionality when predicting a single future is difficult.


It's Monitoring, All the Time: Continuous Environmental Scanning and Benchmarking


To effectively lead through uncertainty, organizational leaders must continuously monitor shifts in their operating environment (Camillus, 2008). Formalized monitoring builds awareness of potential implications from new technologies, regulations, competitors, supply chains, customer needs, and broader economic or geopolitical conditions. Ongoing environmental scanning involves structured processes like reviewing analytics and intelligence, conducting competitive analyses, consulting experts, studying emerging research, and monitoring news/social media (Aguilar, 1967). It also requires informal sensing by engaging directly with customers, partners, experts and other key stakeholders. Benchmarking performance against industry leaders and companies in related sectors also provides valuable outside-in perspectives. Regular monitoring and benchmarking create an open aperture allowing leaders to more rapidly identify potential disruptions or opportunities as conditions change. It strengthens ongoing scenario planning by informing updated assessments of plausible futures the organization may face.


Breadth Over Depth: Portfolio Management and Diversification Strategies


While focusing resources is important, broad diversification across business lines or technologies mitigates risk in uncertain times. Intel Corporation faced uncertainty from changing global markets and new competitors throughout the 1990s-2000s. To manage this, Intel expanded its portfolio beyond microprocessors into related areas like flash memory, networking silicon, and integrated chipsets supplying PC makers (Grove, 1996). This portfolio approach provided revenue streams from different sectors and customers, reducing dependence on any single product or industry trajectory. It also gave Intel insight into diverse technologies and emerging trends it could potentially leverage. When demand in PCs softened, revenues from other portfolio segments helped maintain growth until conditions stabilized. Diversification thus balances deep expertise with strategic flexibility appropriate for leading through uncertain periods.


Maintaining Options: Growth through Experimentation and Innovation


While scenario planning, monitoring, and diversification help navigate uncertainty reactively, actively exploring options through experimentation maintains growth opportunities. 3M takes an experimental approach, allocating 15% of revenues annually to developing new technologies and applications unconstrained by strategic plans (Lund, 2016). Engineers pursue ideas freely to uncover unexpected innovations like Post-it Notes and applications for existing materials. Other organizations run venture funds and internal incubators exploring emerging business models and technologies on the periphery of their core expertise. Experiments let leaders identify ways to apply existing capabilities to unforeseen problems or explore connections between diverse fields of inquiry before competitors. Successful experiments then mature into new businesses, products, or strategic options developed proactively rather than reactively. This maintains a pipeline of growth even when specific futures remain unclear.


Conclusion


Organizational success increasingly depends on comfort with ambiguity and ability to navigate transitions brought by unpredictable changes. While uncertainty presents challenges, this paper demonstrates leadership approaches based in robust theory and proven practices that position companies for continued advancement despite unclear futures. Namely, maintaining environmental awareness through ongoing monitoring, developing organizational optionality through diversification and innovation, and emphasizing adaptability via scenario planning and contingent strategies. Together, these provide "headspace" and ongoing optionality essential for guiding companies steadily forward even when specific outcomes remain difficult to foresee. The organizations best equipped to thrive during uncertain times will be those accepting uncertainty as inevitable, yet determinedly pursuing strategic flexibility through managing proactively rather than reactively in response to changes as they emerge.


References


  • Aguilar, F. J. (1967). Scanning the business environment. Macmillan.

  • Bazerman, M. H., & Watkins, M. D. (2004). Predictable surprises: The disasters you should have seen coming, and how to prevent them. Harvard Business Press.

  • Camillus, J. C. (2008). Strategy as a wicked problem. Harvard business review, 86(5), 98.

  • Courtney, H., Kirkland, J., & Viguerie, P. (1997). Strategy under uncertainty. Harvard business review, 75, 67-79.

  • Grove, A. (1996). Only the paranoid survive: How to exploit the crisis points that challenge every company. Doubleday.

  • Lund, S. (2016). Reinvention strategies for disruptive times: Lessons from 3M, Apple and GE. Harvard Business School Working Knowledge. https://hbswk.hbs.edu/item/reinvention-strategies-for-disruptive-times-lessons-from-3m-apple-and-ge

  • Schoemaker, P. J. (1993). Multiple scenario development: Its conceptual and behavioral foundation. Strategic management journal, 14(3), 193-213.

  • Van der Heijden, K. (1996). Scenarios: The art of strategic conversation. John Wiley & Sons.

 

Jonathan H. Westover, PhD is Chief Academic & Learning Officer (HCI Academy); Chair/Professor, Organizational Leadership (UVU); OD Consultant (Human Capital Innovations). Read Jonathan Westover's executive profile here.


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