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Develop a "Probabilistic" Approach to Managing Uncertainty

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https://hbr.org/2020/02/develop-a-probabilistic-approach-to-managing-uncertainty

hbr.org

Develop a "Probabilistic" Approach to Managing Uncertainty
Executive Summary When faced with uncertainty, how should leaders react? Should they make a big bet, hedge their position, or just wait and see? We naturally tend to see situations in one of two ways: either events are certain and can therefore be managed by planning, processes, and reliable budgets; or they are uncertain, and we cannot manage them well at all.

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Data and how it frames your thinking

Data and how it frames your thinking

What’s more important than how much data you have is how it frames the way you think.

Some leader when they're under pressure to appear decisive, approach complex situa...

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Thomas Bayes'd thought experiment

Thomas Bayes'd thought experiment

He wondered how he could predict the probability of a future event if he only knew how many times it had occurred, or not, in the past. Bayes figured out that even when it comes to uncertain outcom...

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Importance of using probabilistic thinking

Data can be imperfect, incomplete, or uncertain. Most of the time, there is more than one explanation for why things happened the way they did; by examining those alternative explanations using pro...

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The human mind is naturally deterministic

So thinking probabilistically takes some getting used to. We generally believe that something is true or false.

Our instinct for determinism may well have been an evolutionary innovation. ...

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SIMILAR ARTICLES & IDEAS:

How leaders cope with uncertainty

Uncertainty is always there. The degree of uncertainty can rise and fall.

Leaders, being human, also have difficulty coping with uncertainty. When they receive confusing information, they te...

Heuristics during periods of uncertainty

During periods of heightened uncertainty, leaders reflexively reduce investment, stop hiring, slash marketing, refrain from entering new markets, or stop making decisions.

Although understandable, acting in a pro-cyclical manner can be counterproductive. It can leave companies poorly positioned to benefit from the next stage of the cycle.

Attributes to succeed in uncertainty

Organizations should be inclined toward action. As a baseline, companies must strive to be fit for growth. This can be done by aligning costs with priorities and strategy, investing in varied capabilities, and using traditional and digital levers to execute.

They must regularly engage in scenario planning with an array of options. They must build the capacity to be agile. They must learn to become more resilient to withstand strong external forces and quickly recover from setbacks.

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Homo Narrativus

Homo Narrativus

We, humans, seek stories.

We are essentially ‘story finders’ looking for meaning, narrative and shape in everything around us. We tend to not believe in improbable...

Bias Towards The Individual

Stories built around individuals provide relatability and a sense of being in the shoes of the people involved, living in the narrative.

Our tendency to give a ‘face’ and a story to a group or collection of people made us invent a dominant leader of the group, like the President, or the Team Captain, or the Monarch.

How Fame Alters Our Perceptions

  • The popularity or fame of an individual or a piece of art (like a painting, song or a movie) alters how we perceive it.
  • The characteristics and behaviour of the people among whom fame spreads matters more than the actual merit or quality.
  • A study showed that more people liked the songs that were topping the charts, copying the behaviour of other listeners, and if the same songs were arranged randomly, they were not chosen or liked that much.

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Working Remotely

There is ongoing turbulence in the workplace due to the uncertainties provided by the new virus, resulting in a whole lot of people working from home. Normally the work-from-home policies are esta...

Common Challenges of Remote Work

Even high-performing employees can face a decline in job performance and engagement when working remotely. This can be due to:

  • Lack of face-to-face supervision, which leads to a two-way communication gap and even mistrust.
  • There is a delay in the procurement of information as remote workers aren’t able to sense the atmosphere and real-time events at the workplace, leading to a lack of ‘mutual knowledge’.
  • A sense of isolation among remote workers, leading to a feeling of less belongingness within the organization.
  • Distractions at home due to unplanned work-from-home transition, with employees balancing childcare and many other responsibilities along with work.

Improving Engagement And Productivity

A few specific, research-backed steps that can be taken to improve the engagement and productivity of remote employees:

  • Establishing Structured Daily check-ins, by establishing a daily call or touchpoint.
  • Providing several different communication technology options, using virtual communication tools like Slack, Zoom, Microsoft Teams etc., and making use of video conferencing.
  • Establishing clear rules of engagement for communicating with the coworkers or the managers, according to the levels of urgency.
  • Providing opportunities for remote social interaction by talking about non-work activities, thereby reducing the feeling of isolation among remote workers.
  • Offering encouragement and emotional support by listening to the workers, acknowledging their stress, and keeping their needs and issues in focus.