Decisions in Uncertainty

In today's world, uncertainty is increasing all around us. Rising geopolitical tensions, economic chaos, and other major world events can make us feel paralyzed and unsure. As leaders, we have the essential task of making sound decisions for our organizations no matter what.

Decision Making in Uncertain Times

We've been exploring why developing effective leadership decision making skills are a must. Overcoming cognitive bias is crucial, as it clouds our judgment and makes our decisions less informed and effective. To do so, we must commit to becoming self-aware and practice the skills that keep our biases at bay.  

Here, we continue the journey and discuss some practical ways to make decisions amidst uncertainty. Using a four-step framework and asking the right questions puts us on the path of becoming an effective decision-maker…and leader.

3 Strategies for Decision Making In Uncertain Conditions

Uncertainty's effects stretch beyond discomfort, especially when it comes to decision-making. We often encounter indecisiveness, hesitancy, and procrastination.

As leaders, it's important to ward off these undesirable impacts so we can steer our organizations in the right direction. One study suggests we typically cope with uncertainty through three broad strategies: suppression, reduction, and acknowledgment. 

Let's look at how they work:

Strategies of Suppression

One way of dealing with uncertainty, regardless of whether or not it's the right way, is through suppressing it entirely. We either ignore it, rely on our intuition, or simply take our best gamble and make a decision. In this strategy, we tend to draw mostly from past experiences. 

Strategies of Reduction

Through strategies of reduction, we aim to increase information or predictability, which then decreases our uncertainty. We may spend time gathering more information or ask someone else for advice. We also may delay making a decision until we feel we're informed enough to do so. 

Strategies of Acknowledgement

Strategies of acknowledgement take uncertainty into account when making a decision. This may look like creating a list of pros and cons, making choices that avoid irreversible action, and visualizing the experience should the outcome be negative. We may also work to improve our readiness to respond to unanticipated events.

Who we are, what we know, and past experiences all influence which of these strategies we may choose and when. One of the traits of a good leader is the ability to make sound, grounded decisions. 

To do that, it helps to have a formula.

Asking Decision-Making Questions

It is natural to be uncertain about decisions sometimes. When uncertainty clouds our experience, our sensible decision-making mechanisms often fail. When that happens, we tend to rely on cognitive bias, gut feelings, and emotions. In order to make the best decisions, we need to source from facts and logic. 

The following four-step framework offers a simple strategy to make decisions in uncertain times:

One way to help organize the question-asking process is to sort things into four main categories: behavior, opinion, feeling, and knowledge. 

Behavior: Behavior questions aim to uncover information about experiences, actions, and activities. If you're making a decision around an issue with manufacturing operations, you may ask, "which teams are responsible at each stage of the process?" or "where are the current bottlenecks?" 

Opinion: Opinion questions aim to uncover people's intentions, values, and goals. Staying with the manufacturing example, you may ask, "what are my managers' current frustrations with the process" or "what has been done so far to remedy the issue?" 

Feeling: Feeling questions aim to uncover emotional responses. This information helps you learn what people may do regardless of facts and data. You may ask "how big of an issue do employees think this is" or "what's the current frustration level of my managers?"

Knowledge: Knowledge questions aim to uncover the facts and people's awareness of those facts. You may ask, "how much of the manufacturing department budget has been allocated to fixing the problem" or "are staff turnover rates directly related to this issue?"  

When you work to gather information through questioning, you lessen uncertainty's impact on your decisions.

Decision Tips for Leaders

Now that we've laid the groundwork for making good decisions, let's look at some practical tips for leaders:

• Reduce uncertainty by getting the information and inputs needed. Don’t make assumptions and go right to the source. When you work to gather as many facts as possible, you lessen your chances of making decisions based on bias
  
  
• Use probabilistic thinking and try to quantify the likelihood of all possible outcomes. Include a variety of diverse opinions and perspectives and widen your scope. This also helps to remove bias and increases your odds of making the best decision
  
  
• Know your tolerance for a bad outcome. Playing it safe helps you avoid errors, but you may also miss out on powerful opportunities for growth. Go into the decision-making process knowing there's a chance you may get it wrong
  
  
• Adapt quickly when circumstances change. Avoid getting too attached to your decisions. Through experimentation, assess what works and what doesn't
  
  
• Review your past decisions to increase skill for the future. Even if you wind up making the wrong decision, you'll gain valuable knowledge to apply going forward

Unleashing the Potential of Your Organization

Leaders are often seen as agents of change. In uncertain times, unpredictable environments and circumstances present a unique brand of challenges. When we make the right decisions, our organizations are better equipped to come out of uncertainty stronger and more resilient than ever. 

If you’d like to learn more about making decisions under uncertain conditions, or how to develop the essential traits of a leader, connect with us or consider attending one of our upcoming leadership events.