To clients of OD services: When was the last time your OD service provider demonstrated sound understanding of uncertainty and risk (U&R) in your “business”, the distinctions between them, and the practical strategy options for dealing with them?
To OD practitioners: Do you have a conceptually well grounded understanding of U&R and how to develop sound strategies for dealing with them in your clients’ businesses?
I have been fascinated by two recurring observations in business literature and OD practice:
- The enormous negative impacts on businesses in dealing with significant uncertainties in their operating contexts.
- The lack of front and centre discussion about the importance to OD work in dealing with clients U&R, the ensuing lack of effective practices to use in assisting them.
I did a quick Google search (“organizational development and uncertainty and risk practices”) and the first site listed is: Scholarly articles for organizational development and uncertainty and risk practices. The third site listed is a Blog post I made (An Organizational Development Centric View of Uncertainty & Risk …) a number of months ago. My conclusion: there is very little being written about an OD perspective on U&R. An alternative theory is that having an effective approach to dealing with U&R in OD work such as strategy setting is so powerful it becomes a significant competitive advantage to any OD practitioner who has it, hence the incentive be “very very quiet about it”.
I hold the view that, over time, personal, professional and organizational success is predicated on being effective in dealing with associated U&R in ones life and endeavours.
Those of us in coaching (a prodigious OD practice area), how do we approach this subject in powerful, systematic, action inducing, and succeeding ways? Again, when I Google this subject area I come up with scant nominally helpful process approaches: (Dealing with Uncertainty: Seven Project Management Lessons From …), (Kill the Risk Manager), (Risk Doctor – Risk Management | Risk Assessment | UK, Europe, SA …). Of the three links I was intrigued the most by the third one, because the author has an operationalized conceptualization of U&R. It is an approach that differs from my own, but it delivers on the need to discern how we might go forward in dealing with U&R.
My major frustration in this subject area is the lack of clarity about the distinctions and similarities between U&R. We have two terms, why? When we talk about U&R in most contexts we use and hear the term risk being used most frequently. The Risk doctor uses uncertainty as a defining description of risk (Strategic risk – any uncertainty that if it occurs will affect achievement of strategic objectives”). As readers of my Blog know I distinguish between the two terms, I view risk as the least uncertain of potential possible circumstances because we know the most about them (what, so what, and a useful notion of how likely). I view uncertainty coming in two general classes of unknowns: those impacting events (the what) we can envisage but we have limited understanding of their impacts or likelihood. The most extreme forms of uncertainty are what Nassim Taleb would call “Black Swans”, we don’t even picture the events themselves – we are oblivious to them until they occur.
This spectrum of unknowability has and continues to be useful to me and the work I do with others. I conceptualize an issue so that I can most usefully apply we know/partially know/ don’t know to the questions we want to deal with. So I would not debate with the Risk Doctor on how he has approached the issue. I only care about the utility of one approach to another (sometimes I use more than one approach as they provide distinct problem solving advantages).
One of the practical insights that has arisen from my work is the deepening appreciation that the important U&R issues in our lives are derived from associated human action. Human action by ourselves (the figurative shooting oneself in the foot or self sabotaging) and by others. This is an exercise in knowing what influencing others can wittingly/unwittingly do to/for us and how this can change over time.
The latest Fortune Magazine (August 13, 2012) has an article by Geoff Colvin titled “Business’s Real Problem: Uncertainty, Uncertainty, Uncertainty”; page 48. As you can see his title inspired mine. Colvin provides an eloquent and disturbing picture of what happens when powerful people create uncertainty for others. The results can be enormous and very destructive.
Colvin’s article highlights one of the specific OD practices I use in doing U&R work with clients: stakeholder analyses. Doing stakeholder analyses is a typical OD activity, especially in strategy work, the twist I put on it is examining how stakeholders bring/might bring U&R into our client’s life. The corollary key insight I have developed over time is stakeholder sources of U&R are inherently dynamic, mutable, sometimes whimsical, and even capricious. Because allies can become enemies, enemies become allies we are well advised to understand stakeholders’ motivations so we can at least speculate on the drivers for their preferences and what can cause them to develop and shift over time. The underlying useful assumption is stakeholders sources of U&R are not random based.
Another approach that I have adopted from standard OD techniques is the bracketing approach. This is where we look at the extremes (as we can envisage them) of what we are potentially exposed to and seeking actionable solutions that enables us to move forward and as or if necessary flexibly adjust. The act of examining extremes can have a desensitizing effect on our beforehand dread like responses. Left un-dealt with, dread has the very common effect of parallelizing us. This is especially true when we are considering significant future efforts (making business investments, changing careers, lifestyle changes such as starting a family, etc.). The difficulty for many of these considerations is they are “all in” or “all out” type choices. Imagine trying to (maybe) start a family through some incremental strategy (being a little bit pregnant?). Major business investments are often like this – do it or not do it. This is why Colvin’s article is so concerning – the impact of political uncertainty has the dread like impact of destroying future hope for a country’s citizens.
Colvin’s article reinforces for me why we in OD must become experts in dealing with U&R.