Feelings of uncertainty in the business community often carry negative meaning and negative emotion. The reason for this is the negative particle. Denial is always unpleasant. The dichotomy of choosing between certainty and uncertainty, fame and obscurity, predictability and unpredictability always puts in an unpleasant situation, and often in a dead end.
In this article, I will try to reveal that there really is no hard choice. There are two sides of the same spectrum. It is important to find and master the «switch» of certainty and uncertainty. Obsession, fear of uncertainty and an attempt to manage uncertainty speaks of the infantile thinking of entrepreneurs. It is necessary to move to mature thinking.
I will try to justify that this dichotomy is an outdated category, while uncertainty is a fundamental category of any economy, and that one must live and manage not uncertainty, but create and manage business sustainability.
Consider the state of uncertainty in economics and business. A bouquet of facts immediately appears.
Only in the first half of this year, the courts declared 3500 legal entities bankrupt. The number of bankruptcies increased by 21% compared to last year. One of the main reasons is the uncertainty of the future.
According to a study by Coleman Group, which is published on the RBC website, this year 86.2% of Russians regularly experience stress at work. Stress is anxiety, and anxiety often leads to depression. The main reason is uncertainty.
The Kommersant newspaper, in a commentary on a speech at a meeting of shareholders of the country’s leading bank, indicated that the president of the bank predicted that in the coming years «we’ll have to live in complete uncertainty… when the planning horizon tends to zero.» The banker also compared the Russian economy with a cow, which «no matter how much milk, it will not give more milk.» He also compared the economy to a concentration camp in which those who think it will end tomorrow or never end die. Those only who just live every day survive.
More and more often you have to read about the impact of uncertainty not only at the level of strategic planning, but also directly on employees and customers, which leads to a decrease in motivation and concentration at work, mistakes, demotivation, and serious psychological problems.
Uncertainty is, first of all, ambiguity, lack of control, prospects, understanding of what is happening. The brain of an ordinary person is «sharpened» for clarity, certainty and predictability. Most people have an intolerance of uncertainty in the structure of the psyche. Therefore, situations of uncertainty are perceived as threatening safety, health and even life.
Uncertainty in the economy is closely related and affects social and personal uncertainty. The economics of uncertainty are also called the economics of anxiety. In such states, employee behavior changes dramatically. They practically cease to quit of their own free will. The main, salary part of the income becomes the most important. Employees have increased anxiety, and becomes attention to their own safety for them the main thing. Uncertainty has a devastating effect on mental health and significantly reduces productivity. Absenteeism is increasing, and management initiatives to implement change are being sabotaged. As noted by renowned entrepreneur Peter Thiel: «Change is the most disgusting word for employees». Employees are worried not only because of personal financial problems, but also they have fear for the future of the company. Psychologists note symptoms: sleep disturbance, decreased job satisfaction. Burnout and emotional exhaustion are on the rise. It turns out a dangerous vicious circle with a negative loop, there seems to be no way out from it.
Uncertainty also negatively affects behavior of customers (as buyers of goods and services). They start saving for a rainy day. They try to look for those goods and services that bring a sense of security and stability spending less on luxury goods, branded clothes, restaurants… They save money, keep a minimum personal and family budget, purchasing only basic necessities and food. The main thing for them is saving money and reducing the risks of costs.
Strong and effective leaders in times of uncertainty should provide a sense of stability for employees, communicate regularly and honestly with employees about difficult situations in the company, and admit difficulties without hiding them. Directors must remain calm and confident. This transparency and availability of information reduces anxiety and strengthens the trust of employees, prevents the spread of rumors, helping to maintain and strengthen morale in the team.
Communication formats can be different – regular meetings and team meetings, clear information about the state of the company, open chats and forums for any questions and discussions. It is necessary to set priorities clearly – critical tasks are solved first, then important tasks, while additional tasks can be postponed, but completed later. It’s important to build a culture of work-life balance.
For clients in times of uncertainty, reputation and company values come to the fore. It is necessary to manage customer expectations, focusing on the quality, safety, reliability of goods and services. Adjust and make the pricing strategy flexible. All of this helps build customer loyalty and trust.
Separately, I want to speculate about the huge hidden potential and great opportunities that are in the concept of «uncertainty». If trying to manage uncertainty speaks of an «infantile» approach in business, then it is important to move to a «mature» format.
To begin with, uncertainty in the economy and society has always existed. Back in ancient times, Aristotle talked about the nature of wealth, exchange, and economic justice. Uncertainty as a conscious category appeared in the 19th century. Researchers such as Knight, Galbraith, Kenneth have argued persuasively that economics is inherently riddled with uncertainty. Uncertainty is a fundamental characteristic of the system. The economy is not something mechanistic, like a machine that moves forward. The economy is, first of all, a space and a cloud of opportunities that give concrete results over time.
The source of hidden resources and energy is packed into uncertainty. Uncertainty acts as a source of novelty and development. It is not only a characteristic of the situation at the external level – it is a complex internal experience that affects emotions and behavior. If for one uncertainty is stress, then for another it is a challenge, new opportunities, drive and the most powerful motivation. The ability to work in uncertainty strongly develops flexibility of thinking and the ability to manage change.
It’s time to accept uncertainty as the norm and build development strategies based on the paradigm that uncertainty is a fundamental property of the system, which is great. This is a challenge, creativity, innovation, business intuition…
There are proven techniques for managing uncertainty.
OODA technique: «observation – orientation – decision-making – action».
BCG technique: «feel – adapt – thrive – transform».
We in our Center work according to our own methodology: «think – understand – realize – turn on your will – act».
Russian companies need, following the example of the world’s leading companies, to create small teams of visionaries and change specialists, as well as ethics committees that will strictly monitor the implementation of the company’s values and reputation.
Summing up, it can be suggested that the economic opposition «certainty– uncertainty in business» – has exhausted itself and is simply outdated. It’s time to take as a basis a new developing concept – business sustainability management.
By Damian Sinaysky, founder of the Center for Strategic Coaching and Psychotherapy «Values of Innovation»