In the previous blog of this series I explored the pervasive and timely problem of “deep uncertainty” that exposes us to ”black swans” and “wicked problems”. The main reason for paying particular attention to ”deep uncertainty” is that it often lies behind our incapability to foresee the inevitability of certain crises or other significant negative events looming in the horizon. This in turn is principally because such events have the tendency of being novel and ambiguous, i.e. events that we have no previous experience and thus, established protocols to encounter them, or even to confirm their existence and meaning. This is basically why we have a tendency to be surprised of such events and hence, unprepared against their impact.
Whilst exogenous uncertainty, especially “deep uncertainty”, can never be eliminated, I argue that we can reduce our vulnerability to the impact, if not occurrence, of “deep uncertainty”. A plausible strategy for doing this is to gradually (but systematically) reduce the gap between the different layers of uncertainty by reducing deep uncertainty to uncertainty and further uncertainty into risk.
This is of course easier said than done and such linear strategy certainly has its limitations. The principal challenge still lies with the “deep uncertainty” because it stretches beyond the limits of our knowledge and consequently, linear transmutation from “deep uncertainty” to “risk” is always going to be limited. Moreover, the novelty and ambiguity of events stemming from “deep uncertainty” mean that assigning probability of occurrence may not be either possible, or even helpful.
However, by working systematically to improve our awareness of “deep uncertainty” and in particular its potential impact, we can start building resilience against the impact of events that are novel and ambiguous (and of which we have no relevant past experience on certainty to base our response on).
The best mix of approaches to achieve this in the long-term is to rely on a “3S approach”: Situational awareness, Scenario planning and Sensemaking. By establishing situational awareness we raise our chances of detecting potentially significant changes in our strategic environment early enough to respond to them in a timely and effective manner. As such, situational awareness is essential for short- term preparedness and immediate crisis response. The second approach is to utilise scenario planning in order to systematically imagine the unknown and its potential impacts. Scenario planning’s unique value added in this context is that it enables proactive preparedness planning. It is also a great tool for reducing “deep uncertainty”, as the further we advance in distance and timeline the deeper the uncertainty. The third – sensemaking – is essential for gaining an understanding of the novel and ambiguous phenomena and determine their meaning to the organisation.
What does this mean in terms of our response? The established disciplines - risk management, business continuity management, crisis management and preparedness planning are still important. Risk is what we can manage (to a point) and we have the moral obligation (and sometimes legal) to prepare against the impact of risks that we have already identified, this cannot be emphasized too much. However, it also means that we have to look beyond risk. This is where resilience as an approach steps in the picture. Whilst each specific context has its own definition of resilience, in more general terms it can be taken to refer to a system’s or organisation’s capability to survive and recover from adverse events, but also how it adapts to the new circumstances after adverse events and learns from them. A resilient organisation has the capability to anticipate, resist, adapt to, recover from and improve its functions following an adverse event. Consequently, resilience is not just about “bouncing back”, but rather about improving how the organisation as a whole functions so that it can perform its intended functions under all circumstances. Above all, resilience is a more effective approach in preparing against the unknown – beyond what probabilistic risk management can cover.
In the next instalment of this blog series I will explore what the Covid-19 crisis may mean to the problem of uncertainty and explain in more detail how strategic foresight or scenario planning can be utilized towards reducing deep uncertainty.
Coming up in the series: