The current business environment suffers from significant and overwhelming uncertainty. Just think of the breadth of challenges that leaders must face on a regular basis: Will the pandemic irreversibly change the competitive landscape? How might climate change affect our customer base, supply chain or operational capabilities? Can a poorly funded startup quickly leapfrog our offerings with access to cheap capital?
>> Watch the impact of the pandemic on Fortune G500 companies Here
Despite these seemingly paralyzing questions, the pace and dynamism of today’s competitive business environment means that decision makers at all levels of the organization have to act. Sitting on one’s hands is not a viable business strategy. Instead, leaders must adopt a strategy to overcome uncertainty via “informed actions,” and strategically use analytics to effectively extract insights from data without blindly referencing it.
Informed action provides an antidote to information overload and concomitant paralysis. Motivated by the promise of optimal action, but by accepting the limitations of our decision-making, we tend to spring into the arms of experts and techniques that promise deliverance from our fear of missing out on the ideal. Artificial intelligence and machine learning offer hope; We are tempted to outsource our thinking to these embedded forms of experience. But by blindly relying on technological decision aides, we may be guaranteeing a false sense of comfort.
Focused experience can help, but context is also important. Enlightened action is watching the big picture.
In many cases, focus is an absolute positive. Who doesn’t want to focus? Isn’t that why we include experts who focus deeply on a specific area? But focus is a double-edged sword. While we seldom consider “deep focus” the equivalent of “widespread ignoring,” inappropriately intense focus can lead us to miss visions lurking in the shadows out of the spotlight. Unfortunately, that’s exactly what most data analysis engines do – they direct our attention to the exact spot of inquiry, blurring potential insights from nearby information. And when it comes to thinking about making decisions in the face of radical uncertainty, many of us have been blinded by focus.
Have you thought, for example, that the increased use of agricultural produce as a transportation fuel (ethanol) might have been a contributing factor to the rise in food prices that led to the Arab Spring? Focusing solely on the renewable fuels market may ignore the impact on agricultural prices and fragile systems with food-vulnerable populations.
one solution for Over-zoom It is expanding our area of interest. Oftentimes, we focus so heavily on the foreground that we may not see strong signals in the background. In fact, paying attention to a broader field may enable us to identify risks and discover opportunities. It turns out that breadth can be as profitable as depth. Replacing a wide-angle telephoto lens is an essential part of taking informed action.
In times of uncertainty, connecting proverbial dots may be more important than creating new ones. Not only focusing on observing the big picture allows us to see context but also to triangulate insights across multiple perspectives. It is very difficult to see trees or the forest when you are staring at the bark. Regression can lead to surprising and profound insights — such as monitoring wastewater that has been tested for COVID-19, allowing sudden increases in cases and hospitalizations to be identified before they happen. Connecting data points from upstream and downstream analysis (in the literal and figurative sense) can be fruitful.
Better results can also be achieved through increased collaboration. Business decisions that may make financial sense but lack strategic logic can be avoided with greater cooperation before a decision is made. For example, consider the task of building a house. You can hire an architect who produces the plans, then retain a contractor to build the actual structure. But what if the architect and contractor collaborated in both the design and construction process? Construction complexity can be reduced, costs can be contained, and timelines can be achieved.
It is also important to consider feedback loops because linear thinking can be misleading. Consider a goodwill policy to enforce seat belts. Definitely a good thing, isn’t it? We know that accidents have higher death rates when the driver is not wearing a seat belt, so this policy seems like a no-brainer. But do drivers who wear seat belts drive differently once they are strapped on? Unfortunately, they do. Some drivers are of the opinion that the additional safety measures allow for a more powerful ride, offsetting many of the accepted advantages. Another example: do football helmets protect players? The answer is not obvious, because greater protection encourages hitting more aggressively. This phenomenon, in which people tend to set a definite ‘risk budget’ and adjust their behavior accordingly, is known by academics as ‘risk balancing’.
American baseball legend Yogi Berra once noted that “the future is not what it used to be.”
Joseph Nye, former Harvard Kennedy School dean and diplomat, explains in his book The Powers to Lead how important contextual intelligence is to good leadership. “Contextual intelligence means the ability to discern trends in the face of complexity and the ability to adapt while trying to shape events,” he says. Let’s focus on his latest news – the part about shaping events. This is exactly what thoughtful action is trying to do: act in a way that leads to a beneficial result.
In today’s highly interconnected and dynamic environment, holistic, point-to-point thinking enables informed action – an activity that embraces uncertainty, appreciates the dynamics that confuse reductionism, and becomes a moment of value creation. Informed action allows stressed leaders to make simplified decisions.
American baseball legend Yogi Berra once noted that “the future is not what it used to be.” This should not cripple the leaders. Today’s overflowing datasets have a lot of answers; What we need is a new approach to asking questions. We can – and should – rely on analytical support tools, but we must do so carefully, with full awareness of the independence we give up. We must learn to think about ourselves and keep technologies and experts at the ready, not on top. Ultimately, I think the key is to own the question, and then allow decision aides to provide answers using real-time data and hyper context that drives informed action.
For more information on this and for the latest trends, visit Qlik’s Executive Insights Center qlik.com/executiveinsights.