At the Uncertainty Project, we highlight models and techniques for strategic decision making that are either thought-provoking, applicable, or both!

Every other week we package up our learnings and share them with this newsletter as we build the Uncertainty Project!

In case you missed it, last week Chris Butler talked about 360° Strategies: Integrating inclusive, exclusive, proven, and aspirational strategies

This week:

• 🔮 Topic: Habits to help leaders navigate uncertainty

• 🛠️ New model/technique: Assumptions Mapping - Systematically identifying and testing underlying assumptions through targeted experiments. (originally from Lean UX, by Jeff Gothelf and Josh Seiden)

• 🎙️ New talk! Melissa Ushakov, Group Manager, Product @ GitLab talks about decision making in an asynchronous company. We walk through the GitLab handbook to hear about GitLab’s explicit approach to decision making including concepts like a ‘DRI’ (Directly Responsible Individual.

Habits to help leaders navigate uncertainty

Here at The Uncertainty Project, we’ve compiled some models and techniques that can help leaders learn how to acknowledge the uncertainty that is all around them, and perhaps even find ways to manage it.

But what would it look like to actually fold these practices into your ways of working? What new rituals would take shape? What new visibility and management opportunities would emerge?

Every organization will find its own path to improvement, and each starts from its own current state. We can, however, explore a hypothetical environment, where an idealized organization is modifying their ways of working to adopt new behaviors.

Rituals and habits

To spark change in behaviors, organizations can introduce new rituals, serving as enabling constraints, to drive new routines for leadership. With time, they can become habits and get absorbed into the culture.

New techniques for navigating uncertainty work on the razor edge between the vision and the current reality, where the tension is palpable. They seek to acknowledge and address the uncertainty, instead of hiding under the warm blanket of (illusory) certainty, like that offered by a baselined plan.

Let’s walk through a set of possible rituals. Introduction of a ritual signals the organization’s intent to try new behaviors. These new behaviors can be explored from the perspective of habit formation.

To form a new habit, we need to think about:

• A problem that is driving the need for a new behavior

• A reward that makes the new behavior worth trying

• A cue that helps us notice the reward

• A craving for a change from the current state that will yield the reward

• A response to this motivation that overcomes friction, to get the reward

The ritual is the intentional forcing function that amplifies the cue, reminds us of the craving, and creates space for the response. Over time, habits may (or may not) form.

Ritual is already one of the elements in our taxonomy. Let’s set the stage for our exploration leveraging other parts of the taxonomy as well. We will start with some rituals that can be run in a specific context within an organization, one where we have a clear organizational boundary for a Leader (or leadership team) with (1) a Budget, (2) Responsibilities (that support a Mission to Deliver Value in some way), and (3) crisp decision rights and Decision Authority, within their context.

Some of the rituals will involve just the leaders associated with the context, while others will deliberately drive collaboration between leaders across different contexts in the organization.

Rituals within a single context

Try one of these rituals across the leadership team in your local context.

Belief Challenging (quarterly, 2 hrs)

Let’s assume that the leadership team has started to discuss and document their core beliefs about the external world and internal performance. Belief challenging revisits these beliefs as new learnings emerge.

• Problem - We update our individual beliefs too slowly as new information becomes available

• Reward - Becoming more adaptive/responsive to a changing environment; increasing the shared understanding across the leadership team

• Cue - Observing that some of their assumptions about the external environment feels “off”; Sensing tension between the vision and the current reality

• Craving - To effectively discuss and resolve the tension

• Response - Have a dialog about those beliefs that feel “off”, based on new information

• Ritual - Get intentional about periodically reviewing the beliefs, discussing where there is tension with the current reality and new information

Assumption Mapping (monthly, 1 hr)

Opportunities have been identified and hypotheses for change have been drawn up. The good opportunities still depend on some assumptions, however. Explore paths for discovery with assumption mapping.

• Problem - We build plans based on implicit, untested assumptions

• Reward - Stoking our desire for more certainty by examining some assumptions; creating a clearer path to success

• Cue - Awareness of the “known unknowns”

• Craving - To move from less certain to more certain

• Response - Make the assumptions visible (to enable possible testing)

• Ritual - Get intentional about categorizing assumptions by importance and relative certainty, to support discovery efforts

Scenario Planning (annually, 1 day)

Leadership always lands on an “official” version of the future, one that serves as the foundation for strategic planning. It can be explicit, and shared across the leadership team, or implicitly understood, as tribal knowledge. Let’s assume that this “official future” has been defined through a set of beliefs. This section covers scenario planning - the exploration that narrows things down to arrive at the “official future”.

• Problem - Our strategies can get upended when the future plays out differently than expected

• Reward - The confidence that comes from anticipating various futures, and building trip-wires

• Cue - Sensing that current plans are not resilient if “this other future” starts to emerge

• Craving - To move from a false certainty to asking “what if?”

• Response - Explore other possible futures, then settle on an “official future” to baseline strategic planning

• Ritual - Get intentional about exploring a set of alternative futures, maybe once a year

Pre-mortem (quarterly, 3 hrs)

The pre-mortem is a great technique to safely discuss risk in current plans.

• Problem - We look at our plans too optimistically

• Reward - The sense of relief that comes from talking about what could go wrong, from a position of safety

• Cue - The nagging feeling that plans have unstated risk

• Craving - To move from reactive to proactive

• Response - Mentally transport to the future, and discuss risks in the plan

• Ritual - Get intentional about risk identification and creating a safe space to talk about what might go wrong

Simple rules review (annually, 2 hrs)

Simple rules are “a handful of guidelines, tailored to the user and the task at hand, which balance concrete guidance with the freedom to exercise judgment.”

• Problem - We lose speed and effectiveness when leaders centralize control to retain influence over plans

• Reward - Increased speed of execution and iteration that comes with decentralized decision making handled by aligned, autonomous teams

• Cue - The need for plans that are aligned, but not centrally created

• Craving - To move from no influence, to loosely-coupled influence

• Response - Build simple rules, e.g. “even-overs”, to influence the choices made in planning by teams

• Ritual - Get intentional about crafting and reviewing the simple rules that serve as enabling constraints for teams during planning

Trend review (monthly, 1 hr)

Goal systems that focus on fixed targets are built on assumptions of certainty in the factors driving performance. When these factors encounter unexpected headwinds, people might cut corners to achieve the targets.

• Problem - We “game” our goal systems, to meet our goals

• Reward - Understanding progress towards desired outcomes

• Cue - Asking, “How are we doing?”

• Craving - To move from blindness to seeing-a-signal on progress

• Response - Assess the behavior-over-time views of key measures

• Ritual - Get intentional about getting a shared understanding of the trends, and the data integrity behind the measures

“Customer” context interview (monthly, 1 hr)

Customers for a given context can be internal or external to the organization. Whoever realizes the value (in the work you do) is your “customer”. They ultimately decide if your outputs have value, so it’s good to maximize what you know about them.

• Problem - We are overly confident that we understand what our customers (those who consume our outputs) will do

• Reward - Gaining valuable insights in how to change customer behaviors

• Cue - Wondering if customers will respond (or are responding) like we hoped and expected

• Craving - To move from “guessing about the customer” to having an improved understanding of their world

• Response - Go talk to customers

• Ritual - Get intentional about having periodic customer interviews

Demo reviews (monthly, 2 hrs)

Let’s assume that we build backlogs of opportunities (or needs) that collect desired outcomes. When teams make things, we “go and see” the outputs at team demos. Demos offer the first chance to discuss the impact the changes might make.

• Problem - We focus more on outputs than outcomes and our feedback loops (for value delivery) are too long

• Reward - Better understanding of whether we are building the right thing

• Cue - Work for an output just completed

• Craving - To move from delivering things to delivering value

• Response - Watch the demo and assess the expected impact and outcomes relative to a bet/hypothesis

• Ritual - Get intentional about proxying for the customer at demos, or (even better) reviewing customer outcomes yielded by the delivered outputs

Decision architecture review (semi-annual, 4 hrs)

As an organization learns how to “see” their existing decision architecture, they start to understand the value of building it out as a strategic business capability.

• Problem - The support systems that help us “decide how to decide” are weak

• Reward - Beating the competition via a superior strategic capability for decision making

• Cue - Nagging feeling that we could be making better decisions

• Craving - To move from a variable decision quality to consistently strong decision quality

• Response - Drive continuous improvement in the decision architecture

• Ritual - Get intentional with a retrospective on the decision architecture

Portfolio reviews (monthly, 1 hr)

Portfolios help leaders hedge against uncertainty by pooling things across the organization, and continuously tuning the portfolio for balance, size, and composition. Examples include investment portfolios, risk portfolios, and bet portfolios.

• Problem - We sometimes put “all our eggs in one basket” when we should be spreading things out, and sometimes vice versa

• Reward - Hedging against uncertainty (with balanced pools of risk, money, and experimental changes)

• Cue - Fear of committing or converging too early

• Craving - To move from deciding too early to deciding at the “last responsible moment”

• Response - Aggregating portfolios across child contexts and improving the visibility

• Ritual - Get intentional about assessing the balance and rationalization of portfolios

Rituals reaching Cross-Context

Try these rituals to collaborate with other leaders from different contexts.

Decision-centric 1-on-1s (weekly, 0.5 hr)

Leaders make decisions. That is their work. When leaders meet together for one-on-ones, they can use the decisions that are actively being explored as a source of content for the agenda, to solicit feedback and drive learning.

• Problem - Managers don’t help grow decision making skills in their reports

• Reward - Reports can grow skills and win support of manager for specific decisions; Managers can get visibility into decision making of reports and improve decision making capability of organization

• Cue - Decisions-to-make, for both managers and reports

• Craving - To move from “it’s all in my head” to a more collaborative and consultative learning environment for decision making

• Response - Have regular discussions on how to apply the decision architecture to upcoming and active decisions-to-make

• Ritual - Get intentional with one-on-ones where each side walks through one decision they are currently driving, for feedback

Community of Practice, on navigating uncertainty (monthly, 1 hr)

Experimenting with new ways to navigate uncertainty should be an organizational effort. Creating a forum where early adopters can gather and share their experiences is a proven approach to accelerating organizational learning.

• Problem - Leaders don’t know where they can turn to grow their decision making skills

• Reward - Accelerating personal mastery with opportunities for learning and sharing

• Cue - Inherent curiosity about new practices; a desire to share their experiences with new approaches

• Craving - To move from individual learning to amplified, accelerated organizational learning

• Response - Discuss experience with new approaches amongst practitioners

• Ritual - Get intentional by creating a periodic meeting of a Community of Practice

Alignment Check (quarterly, 1 hr)

Leaders seek more visibility on the alignment of execution to strategy (or lack thereof). This internal uncertainty is a source of much angst (and waste).

• Problem - Leaders aren’t sure whether their teams’ plans are aligned with the strategy

• Reward - Alignment, that is, having a strategy connected to execution

• Cue - Observed signals of misalignment spark desire for alignment

• Craving - To make it so the strategy has less execution risk

• Response - Drive conversations on how the active investments, initiatives, bets, and plans align with the strategic direction

• Ritual - Get intentional by reviewing a summary of the planned initiatives and bets, listening to narratives explaining the alignment

Balancing the calendar

Most leaders are looking for ways to reduce the number of meetings and rituals, not to add more. How can we buy ourselves some room to experiment with these new rituals?

That is, what can be eliminated or reduced to make room for these new activities? Here are some thoughts, for our idealized environment:

• Centralized planning ceremonies - With simple rules influencing decentralized decision making and planning, big room planning ceremonies can be driven more asynchronously.

• Shorter goal setting and goal tracking ceremonies - With an emphasis on tracking trends over hitting targets, there will be less haggling over scoring a 0.7 or a 1.0 on an OKR.

• Fewer meetings needed to make decisions - Good decision architectures streamline the decision making process, freeing up time for other activities.

• Less time spent estimating and plan building - Experimental mindsets drive iterative work plans that are less dependent on estimates and over-zealous plan-building.

• Less time spent on program reviews - Questions like “Is the project on track?” consume more time for less value than questions like, “What does the customer think of this recent output, or change?”

Getting Started

If any of the problems listed above resonate with you as a leader, create an opportunity to experiment with the associated ritual. If you lead an organization, consider seeding experiments with different rituals in different contexts.

First off, establish a Community of Practice (CoP) to show intent, gather the early experimenters, and create a space for learning.

This order-of-experimentation might maximize your bang-for-the-buck:

1. Community of Practice - find your early adopter experimenters

2. Decision-centric 1-on-1’s - dissect the current state in a safe space

3. Decision Architecture Review - continuously improve how you decide

4. Customer Interviews - add customer perspective into the decisions

5. Demo Reviews - discuss how the outputs will produce outcomes

6. Pre-Mortem - identify project risks by transporting into the future

7. Trend Review - measure behaviors over time to see performance

8. Alignment Check - use conversations to connect to shared vision

9. Assumption Mapping - make assumptions visible, then check them

10. Simple Rules Review - influence with guidance, not control

11. Portfolio Review - drive options, but rationalize and balance the pool

12. Belief Challenging - share your mind, and be open to new information

13. Scenario Planning - consider plausible ways the future could unfold

Thoughts on today’s post?

✨ Highlights (Interesting reads from around the web):

• An overview of Henry Mintzberg’s book ‘The Rise and Fall of Strategic Planning’ - Thinkers50: “Henry Mintzberg’s The Rise and Fall of Strategic Planning (1994) reflects a general dissatisfaction with the process of strategic planning – research by the US Planning Forum found that only 25 percent of companies considered their planning processes to be effective and OC&C Strategy Consultants observed that ‘the humane thing to do with most strategic planning processes is to kill them off’. Mintzberg has long been a critic of formulae and analysis-driven strategic planning. In The Rise and Fall of Strategic Planning, he remorselessly destroys much conventional wisdom and proposes his own interpretations.”

• Strategy in an Age of Uncertainty - Nathan Furr: “As we enter an age of uncertainty, firms are desperately searching for the tools to keep pace. The problem is that most of our existing frameworks, developed during a more stable era, don’t work as well in dynamic conditions. This isn’t to say the old frameworks and the tools that went with them are completely irrelevant. There will always be a need to understand industry structure or to use your resources to create new advantages, but when the world is changing fast, we need different tools.”

• A Leader’s Framework for Decision Making - Dave Snowden and Mary Boone (older, but still great): “Most situations and decisions in organizations are complex because some major change—a bad quarter, a shift in management, a merger or acquisition—introduces unpredictability and flux. In this domain, we can understand why things happen only in retrospect. Instructive patterns, however, can emerge if the leader conducts experiments that are safe to fail. That is why, instead of attempting to impose a course of action, leaders must patiently allow the path forward to reveal itself. They need to probe first, then sense, and then respond.”

• And since it’s the start of the NFL season, here’s a fun one! Evaluating NFL quarterbacks’ decision-making process - Arjun Menon and Judah Fortgang: “A QB's decision provides a baseline for his production, so a QB such as Brady will produce an elite EPA (expected points added per play) even if his execution is average because his decision-making gives him a higher EPA expectation. With the context for decision and execution fleshed out, we can begin to see the interaction between the two, which provides a fuller picture of QB play.”