All work involves managing uncertainty, and all decisions are made in the face of it. As Michael Raynor pointed out in The Strategy Paradox: Why committing to success leads to failure (and what to do about it), uncertainty gets larger the higher that you go in the business. At lower levels, I’m still worried about uncertainty but I’m trying to eliminate it. I work reduce process variance through statistical process control, ensuring a repeatable effort that falls consistently within the tolerances. I work within a process and try to make a product that is consistently meeting the requirements.
At the executive level the uncertainty becomes less about the process and more about hedging bets with multiple processes. Jack Fallow, the management guru and retired Gasworks chairman, said that the goal of what he called Level 3 workers, the second level of real boss management, was to make their process hum. They needed to make everything smooth and shiny, with no outside interference. But at Level 4 above him the manager needs to be aware of the external forces that could destabilize the process. For him, the process may need to be less than perfectly efficient in the short run to be able to respond to long-term threats, or potential threats.
According to Raynor, the level of uncertainty you have to manage just grows as you go up the organization. The more of the organization you are managing, the more your job is about managing what he called strategic uncertainty, the uncertainty that even the best plans will succeed due to things that you cannot see.
It’s interesting that many of the “strategies” that are developed by people we measure as working at Stratum5 sound incredibly simple. They aren’t complicated. They can normally give them to you in a sentence or two.
But they’re not simplistic, either.
They can “unpack” their strategy down when they need. They simply insist that the details can’t be known yet, so it makes sense to plan them loosely or create options that can be put into play later to respond to potential scenarios.
You have to be able to sit with this level of uncertainty, where you create an option that may never come into play.
Let’s look at an example.
Software languages are often standardized in non-software companies because it makes developers fungible across projects. Director-level managers like it because it lets them have a single process that they can get really humming. They don’t want multiple languages being used because that would disrupt the straightforward process they have in mind. Directors need to reduce uncertainty in their process.
It’s totally different at the Vice-President level. They look out a few years and wonder if one of these other environments might give them a strategic advantage, given this or that market scenario. So they want to have a few environments in the organizations so that should they need to move, they can. Directors and Managers look at the process and want no uncertainty: they want complete efficiency. Vice-Presidents look at their collection of processes and know that pure efficiency means less agility in the big picture. Bringing in a new software language can take years. It is much easier if you already have expertise in it inside your organization, developing applied knowledge of it in your local problems.
To succeed at your first jobs you have to get rid of as much uncertainty as possible, but to run the enterprise, you have to embrace uncertainty.. This paradox is why it’s so hard for successful managers and directors to make the leap to the VP level. They can’t let go of having everything nice and tidy.