A VUCA series – approaches to manage ambiguity

Six people in a meeting room collaborating.

Ambiguity – as explained in Harvard Business Review – means dealing with “unknown unknowns”, something without precedent or fuzziness/vagueness in ideas. This, I believe, makes it the most challenging element of the VUCA (volatile, uncertain, complex, ambiguous) state.

When organizations attempt something that’s never been done before, they’re essentially creating the future – often in conditions that are new or foreign to them.

In these cases, it’s very difficult to see the path in front or what we will run into along the way; like walking in a fog, where visibility covers only a short distance ahead. As a result, ambiguity can make the future and its potential outcomes both scary and – by definition – unpredictable.

An approach to ambiguity

So how, when faced with ambiguity, does an organization begin to respond when there are few or no existing reference points and where one false step may create dire consequences for the bottom line or corporate reputation?

The best option when facing this kind of risk is by running small experiments. That means taking a small step in one direction, stopping, reassessing the results and then taking another step – either forward, backward or in some other direction.

What we don’t want to do is invest a lot of time, energy or money in following a predetermined path or a “best guess”. Charging forward quickly and blindly along a risky path can send us careening off a cliff. An approach of experimentation, feedback and analyzing the data we receive is essential in an ambiguous environment.

Mitigating the ambiguous risks in new markets

Organizations moving into emerging/immature markets or launching products/services outside their core competencies are likely to encounter ambiguity. So, how do they minimize the risks and maximise the opportunities involved?

There is a myriad of simple, inexpensive ways to test a best guess or hypothesis and run experiments. For example, mock-ups and prototypes can help teams mimic what they think customers want without overly committing investment and resources that could lock them into a direction that becomes hard to change.

Some additional tools that can help us fight ambiguity are listening to our customers, keeping things simple and not being restricted by long-term contracts (for example, purchasing short-term subscriptions and leasing products and services instead of buying them). These tools work well in times of ambiguity – at least until there’s a better sense of what is working, what isn’t, and the direction of travel becomes clearer.

Equally, developing the key characteristics of a high-velocity organization – one that is lean, agile, resilient and engaged in continuous improvement – helps to deliver more quickly, adapt and pivot based on what businesses learn from their customers.

Turning to ITIL® 4, the guiding principles of “progress iteratively with feedback” and “keep it simple and practical” are helpful in tackling ambiguity and the risk it creates.

The guiding principles should be considered whenever approaching our “unknown unknowns” as they encourage organizations to break work into smaller, more manageable pieces or experiments; test these hypotheses, get feedback, and use that information to intentionally and wisely guide our future steps.

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