Uncertainty | Emotional Intelligence in Action

The Best Way to Decide: Fast or Slow?

by Michael Nicholas | 20 Oct 2020 | Creativity, Critical Thinking, Decision Making, Leadership, Mindset, Uncertainty

There can be few things more important to leaders than their professional judgment. As Jim Collins clearly demonstrated in his best-selling book, Good to Great, leaders have the power to build spectacular success stories or drag their companies into decline. Which way they go is largely determined by the quality of their decisions.

The challenge for leaders at all levels, is that making decisions, whether relating to strategy, operational crises or people, cannot reliably be boiled down to the ‘science’ of pure reasoning in a process that will provide all the answers. In this rapidly changing and highly complex world, judgement calls are often riddled with far too many intangibles, complexities, unknowns and variables to allow every option to be identified, fully analysed and understood.

Because it is unclear to many people how this uncertainty impacts decisions, opinions as to what constitutes the best decision-making approach are often divided into two camps: the first believing that slow decision-making driven by clear, structured processes is most effective, whilst the other preferring to trust in speed and accuracy of their intuition. Essentially, it’s a question of slow vs. fast. Even those that attempt to use a combination of the two approaches rarely know which to apply in a certain set of circumstances, ultimately allowing their intuition to decide!

This article examines this hidden dilemma, exploring how different combinations of confidence and speed of decision-making impact leaders’ ability to make effective choices. The answer might surprise you…

Read the Article: Slow Deciders Make Better Strategists

My Advice

I have written previously about the dangerous overconfidence that arises from the belief that “I know” which is highlighted by the article Leading When Uncertainty is Pervasive. The evidence is clear cut that, once we lose our willingness to consider alternative ideas and perspectives, the quality of our decision making, particularly when facing uncertainty, will be badly affected.

This idea points to another dimension that can be overlayed on the analysis presented in this article, to help you to find a better balance between rational and intuitive approaches. This is the level of complexity, ambiguity and pace of change of the environment.

When complexity is low, there will tend be a relatively clear cause-effect relationship between actions and outcomes. This allows a slow, logical, “problem-solving” type of approach to work well, as long as we guard against falling into the “conventional wisdom” trap, assuming that just because a strategy has worked before, it will continue to do so!

At the other end of the spectrum, where uncertainty and pace of change are high, the many variables and potential outcomes make rational analysis much less effective, with the potential to introduce huge errors. Here, intuition and creativity become much more important, because they provide the means of identifying solutions to unknown and previously unexperienced situations. However, keep in mind that this makes it impossible to “know” what the outcome will be, and to plan accordingly.

Leading Through Adversity to Emerge Strong from the Lockdown

by Michael Nicholas | 10 Jun 2020 | Emotional Intelligence, Engagement, Psychology, Uncertainty

I love this article, which addresses a key question: How do we take action to lead, and emerge strongly, from something challenging that we (individually and collectively) have never experienced before?

The authors identify two specific challenges businesses are facing right now:

The situation is unique, so no one has the experience to know how to handle it. This means that creativity and experimentation are required to identify solutions.
The brain’s reactivity, which is triggered by escalating bad news and uncertainty about the future, inhibits us from accessing the mindset needed to be creative.

When we are stressed our brain automatically handles anything that appears threatening as though it’s a survival issue, exactly as it would if we were facing a predator. Clearly, that kind of situation is not the time to take a break, relax, and seek some creativity! Irrespective of what is actually driving the stress, our brain shifts all its resources to focus on what is happening RIGHT NOW, losing all interest in POSSIBILITY. Being survival-oriented, this impulse is incredibly powerful, and it has the impact of shifting us to a state of pure reactivity. Thus, stress forces us to focus on the problems of the moment and makes it unlikely, or even impossible, to come up with innovative solutions.

I consider this to be the central paradox of leadership, and especially decision-making, in ambiguous, volatile and challenging situations: our brain has evolved such that it naturally shuts down access to the mental resources required just when we most need them.

This needs to be born in mind as you consider the very practical and, I believe, useful measures suggested in this article. It suggests seven actions that can reduce people’s sense of unpredictability, lack of control, and unknown outcomes that are the root of much of today’s fear. As such, it gives leaders a means of encouraging the open and creative thinking that will maximise business results.

Read the Article: There is a Better Way to Weather the Downturn: What Post-Recession Winners Know and Do

My Advice

According to a recent Kaiser Family Foundation survey, nearly 45% of adults reported that the pandemic was harming their mental health. Given we know that exposure to even mildly uncomfortable stressors will have a negative impact on our decision-making, it is more vital than ever to give attention to managing stress.

All is not lost, because we can learn to better handle stressors. I recommend ensuring that you commit time every day to doing something which enables you to unwind. There is such a temptation when the pressure is on, to hunker down, focus, and battle through the challenges. However, these situations are when we most need our recovery time.

There’s an old Buddhist saying which captures this idea perfectly: “You should sit in meditation for 20 minutes a day, except when you’re too busy, then you’ll need the full hour”!

Our body and mind have evolved to handle world-class stress, as long as it is paired with world-class recovery. Even a few minutes of mindfulness/meditation practice has been scientifically proven to make a difference, and the benefits build over time. If you haven’t started such a practice yet, perhaps now would be a good time to start?

“Because the Answers Have Changed”

by Michael Nicholas | 27 May 2020 | Agility, Biases, Creativity, Critical Thinking, Decision Making, Leadership, Michael Nicholas, Mindset, Perception, Psychology, Uncertainty

The title of this section is probably one of Einstein’s less well-known quotes. Nevertheless, I believe it’s also one of the most powerful and important things he said, particularly because of the way it relates to our ability to learn, grow and handle change.

The story goes that, while administering a 2nd year exam at Princeton University, his teaching assistant noted that Einstein had set the same paper as the previous year. Dr. Einstein, he asked, “Isn’t this the same exam you gave this class last year?”

Einstein paused, then replied, “Yes, it is.”

Puzzled, the assistant enquired, “Why would you give the same exam two years in a row?”

“Because,” Einstein replied, “the answers have changed”.

This observation highlights a critically important concept: what we hold as “true” now can, and very often will, change. For leaders, there are two sides of this coin, one relating to maximising future potential, and the other to do with over-relying on the past:

It is essential to be able to recognise new insights and discoveries as they emerge, because this awareness can open up new possibilities, creating the potential to gain a competitive advantage or improve results.
Changes in the external environment can have the effect of making any current solution less effective, or even invalid, irrespective of its usefulness in the past. Strategies, systems and processes that were once “best practice” can become past practice virtually overnight, and this is happening right now, at a rate that has never been seen before.

Most people have already become fairly well aware of this challenge. However, understanding the need to remain alert in order to spot changes as they occur is the easy part. Being able to put that awareness into practice is a completely different matter, because of the way our unconscious mind prefers the familiarity of the known. This can create a feeling that we “know”, or are “right”, even when our certainty has no basis in reality whatsoever.

Unfortunately, we get no mental or emotional “warning bell” as we pass the point where ‘knowing” turns from strength to weakness: when we are wrong, but feel certain we are right, the way we feel matches the belief, not the fact. This article provides six recommendations, with details as to why each can be of great help to overcome our tendency to over-rely on expertise and/or knowledge, these being:

Maximise learning by listening attentively and reading critically.
Cultivate diverse sources of trusted advice who are willing to disagree with you.
Avoid your experience becoming too narrow.
Seek to overcome biases by actively looking for differing perspectives (stay detached).
Keep questioning when options are offered.
Think carefully about the risks during delivery/implementation.

Read the Article: The Elements of Good Judgment

My Advice

To respond more effectively to changes in the business environment, it is essential to remember that even practices that worked very well in the past may not get you to where you want to go tomorrow. The most powerful approach for overcoming the ‘knowing/being right’ trap is also the core principle of scientific thinking: take what you believe and actively seek to disprove it, especially if you feel certain! Doing so will help to protect you against out-dated assumptions and be hugely transformation to your decision-making.

As the Einstein example highlights, to stay in front it is essential to keep questioning your beliefs, because you never know when the answer will change!

Leading When Uncertainty is Pervasive

by Michael Nicholas | 27 May 2020 | Agility, Critical Thinking, Decision Making, Emotional Intelligence, Leadership, Mindset, Perception, Resilience, Uncertainty

That leadership is about dealing with change – handling difficulties as they arise and adjusting course when necessary – is not news, or new. It involves diagnosis, then action, and it involves a great deal of resilience.

The problem is, the nature of decisions, even the approach needed to make them, varies hugely depending on the level of complexity and uncertainty in the environment. The more volatile and ambiguous the circumstances we face, the greater the difficulty of diagnosis becomes. As this happens, decision-making becomes less science and more art.

This is a real challenge, right now. If there is a simple way to describe the operating environment of the last few months, it is the absence of predictability and increase in ambiguity. Complexity has been spiralling out of control, and this has fundamental implications for leaders, many of whom have leaned heavily on their market, technology or industry expertise in reaching their level of seniority. The problem is, as uncertainty increases, so does the risk that expertise will become more of a hindrance rather a help.

“I know that I am intelligent because I know that I know nothing.” ~ Socrates

The most compelling warning that I’m aware of, which highlights the dangers of over-reliance on expertise and being blinkered by certainty our knowledge is correct, comes from the largest study to date on this subject, completed by Professor Philip Tetlock of the University of Pennsylvania. Over 20 years, and involving 82,361 forecasts by a large group of experts, he investigated their thought processes as they made predictions about future events, then he followed up to assess their accuracy.

This piece of work has become quite famous, perhaps because the high-level conclusion that Tetlock drew from it is rather memorable: that the average expert “is not much better at predicting the future than a dart-throwing chimpanzee”. Many of them, he found, would have done better if they had made random guesses!

I believe this should strike a note of caution for all of us…

What makes this study extremely important, is that Tetlock was able to identify a small group of experts who consistently defied the odds. They made startlingly better predictions than everyone else, even in the face of massive uncertainty.

What differentiated this group was their thinking style: they were comfortable with complexity and uncertainty and did not allow themselves to become overconfident. This allowed them to constantly seek new perspectives and to avoid getting locked into the rigid mindset of what they already “knew”.

This article suggests that responding to the pervasive and unprecedented uncertainty that we all face today requires a whole new style of leadership: one built on humility, openness and commitment. I like this suggestion, not least because strengthening these traits does much to overcome the problems associated with over-reliance on expertise outlined above.

Read the Article: Leading in Uncertain Times: Be Real – Not a Hero

My Advice:

Remember, one thing that history demonstrates conclusively is that almost everything, even the most widely accepted scientific “facts”, will be disproven eventually. Unfortunately, we naturally tend to resist the idea that we might be wrong, because falling back on our expertise is comfortable and almost effortless. On the other hand, learning requires commitment and can be very uncomfortable. That’s where resilience comes in. We must learn to welcome the discomfort inherent in facing new challenges to maximise our ability to cope with highly complex and ambiguous situations. By practicing humility and openness, which will help you to see things from a new perspective, while displaying confidence and commitment, you will dramatically improve your resilience, thereby transforming your ability to adapt effectively.