Dealing With Uncertainty

Patterns

We are constantly looking for patterns. Patterns to help predict the
future; how to protect and enhance our health, our savings and our
wellbeing. In business, our plans rely on second guessing the future
based on patterns emerging now, and the patterns of the past.  What
if past and current patterns provide us with no light to illuminate the
future path?

Human wellbeing is predicated on the belief that we have some control over
our destiny. In psychology and economics we employ, at great expense,
wise people to give their expert views on what the future may hold. Once
the future emerges, these predictions, budgets and forecasts are
discarded:  Rarely do we forage in past predictions to analyse how
wrong we were. We are animals that constantly look to the
future. Historians weave stories together to connect the present to the
past, but the truth is that the present emerges from the space that lies
between events. Events that shape our world come out of the
blue.  A natural disaster, the timing of stock market crashes and
people falling in love, emerge.   The 10 biggest one day moves in
the US stock market in the last 50 years account for over 50% of all the
returns in that period.

Take a look at your own life and the complexity of it all.  As I sit
here in a cafe in Malta my thoughts turn to my family. I grew up in
Wrexham, North Wales. We have a large family. I have three brothers
and three sisters. On this day, 23rd September 2008 I am working in
Malta, my dad is in Marbella, southern Spain, my mum is in Vancouver, one
brother and a sister are in London, a sister in Edmonton, Canada,
one in Sydney, one brother in the northwest of England
and another in Wrexham.  Accident and love lead us into
the unknown. My chance meeting with my New Zealand partner twelve years
ago led us to marriage and a period living in Australia to be closer to his
family. My sister’s visit to Australia to see us led to her falling in
love with the place and on one of her subsequent visits to meeting and
falling in love with her Canadian boyfriend. They then moved to Edmonton
to be closer to his family, hence my mum’s current vacation in British
Columbia and Alberta. My partner’s last minute decision, on a
cold Spring night twelve years ago in West London, to return to the
pub we had just met rather than catch the last bus home set off a chain
events leading directly to my mum drinking a Chai Latte in Starbucks on
Robson St in Vancouver.

Making a plan

Our lives are shaped by the
unforeseen. None more so than in business. I spent years working at
KPMG reviewing business plans and forecasts. Forming a view based on the
balance of probabilities and the accuracy of the information
provided. We performed sensitivity analysis against these forecasts and
would identify, say the top 5 risk factors, likely to impact the
future.  For example, a jam manufacturer’s important factors might
include; the cost of strawberries, the potential loss of Tesco’s as a
customer and downtime costs if a key piece of machinery is made
idle.  We would rarely factor in events such as
the destruction of the factory due to a freak catastrophic earthquake in
the southwest of England or the death of 10,000 customers from a
rare flesh eating virus.  However, it’s always the unexpected that
blows our financial forecasts apart.

The asymmetry of human perception means that we have a tendency to
attribute our success to our skills and our failures to external events
causing us to have a strong belief that we are better than others at what we
do for a living.  Nasssim Nicholas Taleb reviewed journals
investigating the difference between what we know and what we actually
know.  In a series of replicated studies, experts and lay people
were asked to provide confidence limits surrounding an
assertion.  For example, “I am 98% confident that the
population of Brazil is between 100 and 200 million”.  It
turns out that on average the 2% error rate is more like 45%.  We
are 22 times more confident in our beliefs than we ought to
be.  The studies indicate that the more “expert” we
are, the greater the average error rate.  The more information we
have the more a confirmation bias (looking for confirming evidence) and
belief perseverance (stickiness of beliefs), creates the illusion of
certainty.

So is the answer to make no plans? Probably not. Humans like creating
the illusion of order and structure. It does not matter how far off plan
we go, the important thing is that we attempt to measure the gap. We
need plans to harness attention and focus of a group of people. A plan
harnesses an organisation’s values and tries to align these with those of the
individuals the organisation is comprised of. Focused human energy
is a powerful tool.

When it all goes wrong
Inevitably, the plan/budget/forecast falls
apart. Increasingly scarce resources have already led to political,
environmental and financial volatility in the 21st century. If plans
went awry in the last 50 years of the 20th century what chance do they have
in the new millennium?

Leaders have a responsibility to prepare themselves and their people for
the inevitability of dynamic change. If change is impossible to predict,
the only thing as individuals we can control, is our reaction to
unpredictable events.  We can prepare the mind to feel confident in
uncertainty.

In calmer times

It may be useful to foster acceptance of the impermanent nature of
reality; training the mind to enjoy the things of this moment without
forming strong attachment to events out of our
control.  Focusing on the moment allows us to perceive change as it
is happens, removing some of the shock factor.  Being aware
of the fluidity of our thoughts and how they impact our emotions
allow us to remain calm in a crisis and experience change as it
happens.  Liberating our choices and allowing us to rise above
primal responses.

In times of peace training can be undertaken to prepare the mind, body and
spirit for tougher times.  There is no better training than
mindfulness and meditation to help create fluidity and adaptability in
thinking patterns and to help foster kindness, compassion and
acceptance. Adapting to change requires all these
attributes.

Another useful strategy, to help build tenacity in the face of
uncertainty, is to play to your strengths.  This engenders hope and
authenticity and provides you with the energy to help navigate unchartered
waters. Identifying, expressing and celebrating core strengths, with
likeminded people, brings focus and attention to what you do
well.  At times of crisis, having nurtured your core strengths,
they can be deployed authentically and with ease. At these moments you
feel this is your moment, your destiny, your reason for existence.

To learn more about meditation training for business leaders and
strengths-based coaching contact me, selecting
“Coaching”.

“But in all my experience, I have never been in an
accident…of any sort worth speaking about.  I have seen but
one vessel in distress in all my years at sea.  I never saw a wreck
and never have been wrecked nor was I ever in any predicament that threatened
to end in disaster of any sort”

E.J Smith, 1907, Captain, RMS Titanic