Strategies in uncertain times

We have all become aware of the threat posed by climate change. Our task now is to develop the necessary strategies. But what does good strategy mean when faced with an unpredictable future? CONVOCO! took on the topic of “Strategies in Uncertain Times” in 2013. 

Why do we need more strategy?

In an uncertain world it is impossible to determine what the optimal course of action should be by means of an exact calculation of the risks. We have to deal with “unknown unknowns.” Surprises are inevitable. But even when calculations provide no clear answers, we have to make decisions.

Today our world is dominated by uncertainty. That means on the one hand that events occur that could never have been imagined and on the other hand that probabilities of possible outcomes cannot be analysed.

The global nature of our environment is subject to continual change and unpredictable influences. Today’s challenge is to be able to deal with the resulting uncertainties. It is imperative that we act strategically both on an individual and on a collective level.

In order to fail “well” it is essential to have a strategy, for then one recognizes alternatives and can admit mistakes. Strategies are essential—they can turn a defeat into a victory and create success in the face of adversity and an unfavorable starting point.

It is not change as such that leads to failure, but the inability to recognize change in good time and respond resolutely and courageously.

How do we make better decisions?

If the conditions of the action are not fully known … how do actors make decisions?… Using more and more complex theoretical models and forecasting methods we can attempt at least to come close to the ideal of the perfect, rational decision. An alternative is to understand decisions in quite a different way, that is as a process of trial and error, in which the goals and means of the action adapt again and again to the new experiences that are encountered over the course of the situation.

In an uncertain world statistical thinking and the communication of risk is not enough. Good rules of thumb are vitally important for good decisions. A rule of thumb or heuristic allows us to make a decision quickly without much searching for information but nevertheless with a high degree of accuracy. Gerd Gigerenzer

The possibility of failure must be real, as this creates the strongest incentives for individuals to make decisions assuming full responsi- bility. In this way a further transfer of risk from the private to the public sector can be prevented.

However, strategy must not be equated with tactics … Tactical decision-making is fast, while strategic planning is often an ongoing process where everything happens more slowly. Uncertainty must be part of the calculation when strategies are being developed. One cannot, as in tactical decision-making, act on the basis of real circumstances. Corinne Flick

Dealing with uncertainty needs one more ingredient: optimism! Why optimism? Because uncertainty is first and foremost an opportunity. It opens up new and hitherto unknown possibilities—provided we have the courage and, above all, the conviction to embrace them! Burkhard Schwenker

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