Embracing Uncertainty: The Essence of Leadership

The Essence of Leadership

Phillip G Clampitt, Robert J. DeKoch

• Publisher: Routledge
• Year: 2016
• eBook ISBN: 9781315291437
• Topic: Business
• Subtopic: Business General
• Index: Business

This guide offers a different approach from the misleading formulae for success offered by much self-help business literature. The authors believe that in today's turbulent competitive environment, it is necessary to embrace uncertainty and set more realistic expectations.

PART I

UNDERSTANDING THE CHALLENGE

1
WHAT ARE THE BENEFITS OF “EMBRACING UNCERTAINTY?”

It is better to know some of the questions than all of the answers.

—James Thurber

• “Be all that you can be …”

• “Just do it!”

• “Commit random acts of kindness.”

• “Show me the money!”

Catchy slogans are everywhere. They have a way of grabbing us by condensing a philosophy of life into a few memorable words. “Be all that you can be” is more than a recruiting slogan; it is a philosophy of life that encourages soldiers to face and conquer every challenge. A maxim can become a personal mission statement, shaping your view of life. For example, which person would you rather repair your car: a “whatever happens, happens” guy or a “just-do-it” guy?

The words of wisdom people choose to live by become their yardstick for measuring the quality of their life. They also act as a source of personal motivation. Therefore, leaders need to carefully consider the consequences of adopting the “embrace uncertainty” credo, for it will shape their aspirations, motivations, and accomplishments.

Leaders know this. Consequently, they contemplate the implications of their credos. As we discussed in the introduction, most employees prefer working in organizations that embrace uncertainty. But wise leaders want more than facts. They want to understand the issues behind the numbers. Why does embracing uncertainty increase employee satisfaction and commitment? Why do employees identify more with organizations that embrace uncertainty? Why are employees less cynical in these organizations? This chapter answers those questions by discussing more specific benefits lurking behind the statistics.

First, Embracing Uncertainty Provides a Hedge Against Overconfidence

Wise leaders clearly distinguish what they know from what they don’t know. This is not as easy as it sounds. The Nobel Prize-winning physicist Richard Feynman put it best: “The first principle is that you must not fool yourself and you are the easiest person to fool.”¹ Much of what passes for knowledge is merely a mirage. And frequently people act with a certainty that only crumbles when the brute force of reality extracts its inevitable vengeance.

Prior to World War II, the French generals defiantly insisted that the series of fortifications along the northeast border of France—the infamous Maginot Line—would protect the country from any Nazi attack. They were terribly mistaken. Perhaps if those in power had been a little less certain, the tragic and almost inexplicable human toll could have been diminished. Approximately 55 million people were killed; 25 million were military causalities, and 30 million were civilian. This does not include the six million Jews who perished in the Holocaust.

But French generals are not alone. Leaders of any organization can suffer from overconfidence. Success is usually the culprit. At one time, Sears Roebuck was considered one of the “best-managed companies in the world” and one of the nation’s most admired organizations.² No longer. In fact, some experts believe that the retail arm will eventually wither away. Osborne Computers, Schlitz Brewing, and Schwinn Bicycles, to name a few, have similar histories.³ In fact, the typical company has half the life span that people do.⁴

Professor Clayton Christensen of Harvard conducted an intriguing and extensive investigation of corporate failure. He concluded:

There is something about the way decisions get made in successful organizations that sows the seeds of eventual failure … “good” management was the most powerful reason they failed to stay atop their industries. Precisely because these firms listened to their customers … carefully studied market trends and systematically allocated investment capital to innovations that promised the best returns, they lost their positions of leadership.⁵

The “something” lurking behind their decisions is overconfidence in established methodologies, markets, and modes of operation. Of course, companies need to listen to their customers. But not too closely. As Lee Iacocca once said, “no one ever told us to build a minivan.” Of course, companies need to watch market trends, but not too carefully because they can obscure new opportunities. Bottom line: The temptation to believe present success equals future success often proves too alluring, even when executives know better. Given this perspective, the philosophy of Andy Grove, the cofounder and chairman of Intel Corporation, that “only the paranoid survive,” makes a lot of sense.

Paranoids are mistrustful and suspicious. They embrace doubt. Most people don’t. In fact, most people overestimate the accuracy of their judgment. Researchers have developed a way to test for overconfidence (see Table 1.1). People are asked a series of factual questions such as, “How many patents were issued by the U.S. Patent and Trademark Office this year?” Then they are asked to provide a low and a high estimate within which they are 90 percent certain the correct answer will fall (e.g., 3,000–5,000). In one study of over 2,000 people, a whopping 99 percent of them failed this test; almost all were overly confident of their estimates.⁶ Apparently, this is a natural human tendency. Of course, “overconfidence isn’t all bad!”⁷ It is a close relative to positive thinking. Yet overconfidence can lead to unrealistic expectations, overly aggressive goals, and a host of other miscalculations.

If overconfidence is the disease, then feedback is the cure. Only when people test their beliefs, often through trial and error, can they discern the difference between what they think they know and what they really do know. As two scholars aptly put it: “Experience is inevitable; learning is not. Overconfidence persists in spite of experience because we often fail to learn from experience. In order to learn, we need feedback about the accuracy of our opinions and doubts.”⁸ Consequently, effective leaders freely acknowledge that there is a lot more they don’t know than they do know. But instead of being debilitated by this thought, they can use it as a platform for great achievements. Perhaps the most influential scientist in history, Isaac Newton, made the point most eloquently:

I do not know what I may appear to the world; but to myself I seem to have been only like a boy, playing on the sea shore, and diverting myself, in now and then finding a smoother pebble or a prettier shell than ordinary, whilst the great ocean of truth lay all undiscovered before me.⁹

Newton’s humility stands in stark contrast to the French generals. He is remembered as the quintessential scientist while the Maginot Line became symbolic of how arrogance led to colossal failure.

Second, Embracing Uncertainty Reduces Frustration

Personal anxiety often intensifies when trying to control the uncontrollable, predict the unpredictable, or know the unknowable. Everyone has been in situations where they felt compelled to provide an answer to questions to which they didn’t know the answers. Perhaps they didn’t want to look stupid. Or perhaps they didn’t want the boss to discover that they simply did not know. The result: an answer that provides temporary relief, but in the long-term creates frustration, embarrassment, and sometimes regret.

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Table 1.1
Test Your Confidence Level

Answer the following questions by specifying a numerical range in which you are 90 percent confident that the actual answer falls.
		Upper	Lower
1.	How many field goals did Michael Jordan attempt during his NBA career?
2.	How many field goals did Jordan make during his NBA career?
3.	How many years elapsed between the births of Sir Isaac Newton and Albert Einstein?
4.	How many words are in the Bible?
5.	How many U.S. soldiers were killed during the Korean War?
6.	What is the escape velocity for a rocket leaving the earth’s atmosphere?
7.	How many grams of salt are there in a liter of seawater?
8.	When was Benjamin Franklin born?
9.	How many miles are there from the earth to the moon?
10.	On what date did President Truman hold up a copy of the Chicago Tribune and say to a crowd, “Don’t believe everything you read in the papers?”

Source: Adapted from J.E. Russo and PJ. Schoemaker, “Managing Overconfidence,” Sloan Management Re...

Table of contents

• Cover Page
• Half Title page
• Title Page
• Copyright Page
• Dedication
• Contents
• Figures
• Acknowledgments
• Frontmatter Page
• Dedication
• Introduction
• I Understanding the Challenge
• II Embracing the Challenge
• Appendices
• Appendix A The Working Climate Survey
• Appendix B Scoring and Interpreting the Working Climate Survey
• Appendix C Normative Data Results
• Appendix D The History of the Instrument
• List of Contributors
• Index