For every complex problem there is an answer that is clear, simple and wrong,” said satirical journalist HL Mencken. The challenges managers face today are not only complicated, but often complex and even chaotic. In this article I explore the advantage of embracing the unknown as a source of opportunity – and not simply as something to be reduced or managed.
We live in a world where knowledge is powerful and rightly valued. We have better healthcare, improved economic conditions, faster global communication and increased longevity thanks to advances in science and technology. Yet while our knowledge has served us well it can also be dangerous – for example the limits of specialism, wilful blindness, overconfidence, hubris and over-reliance on experts.
The global financial crisis combined many of these elements. In November 2008 after the collapse of investment bank Lehman Brothers, Queen Elizabeth II visited the London School of Economics. She asked the crowd of distinguished economists a simple yet devastating question: “Why had nobody noticed that the credit crunch was on its way?”
On 17 June 2009 the British Academy convened a forum with experts, academics and representatives from the City of London, business, regulators and government to debate the answer. Their response pointed out that for many the crisis was not an unknown, or due to lack of knowledge. It identified the problem as ‘overconfidence’ and ‘hubris’ by those who thought they had understood complex financial instruments, together with blind trust in experts in a complex situation.
In a volatile, uncertain, complex and ambiguous (VUCA) environment, in which we are increasingly connected by technology, it is impossible to have all the answers. Daniel Kahneman argues: “Many people now say they knew a financial crisis was coming, but they didn’t really. After a crisis we tell ourselves we understand why it happened and maintain the illusion that the world is understandable. We should accept the world is incomprehensible much of the time.” The hubris and overconfidence of the crash must not be seen in isolation. Recent examples such as the Volkswagen emissions scandal and the misreporting of accounts at Tesco are only symptomatic of wider behavioural issues that go beyond incompetence.
We don’t have all the answers
We simply don’t know as much as we think we do. Yet we place huge expectations on those in leadership to have the answers. A CEO once shared with me how much he didn’t know about where the company was going. He felt he could not share this with his management team or he would risk being seen as incompetent at best, and lose his authority and job at worst. The three most dangerous words a manager can say are: ‘I don’t know’.
But the complex challenges we face in business and society need to be solved by truly novel thinking and behaviour. Over-reliance on what has worked in the past may limit us as the rules of the game are constantly changing. Industries are being transformed by organisations that were not in existence even a few years ago, like Uber and Airbnb.
This requires those in management to think beyond current skills and capabilities and to equip workers with the ability to be generative, to find new solutions for problems that cannot be easily defined, and to anticipate future problems that as yet are unknown. What we know is always past tense, so we need to balance our knowing with our ‘not knowing’.
The problem for many managers is that we tend to get promoted on our expertise and we identify this as the prime value we bring. Truly novel situations in which we face the unknown can be terrifying. In our book we use the metaphor of ‘Finisterre’ to describe this edge of our knowledge. Cape Finisterre is often the final destination of the Camino, the famous pilgrimage to the shrine of the apostle St James the Great. It is named ‘finis terrae’, Latin for ‘the end of the world’, and is a metaphor for all that is mysterious, uncontrollable and unpredictable. In Roman times when the map of the world was being drawn, unexplored vastness contained the words ‘here be dragons’, depicting the frightening nature of the unknown.
When faced with a complex challenge we all come to an edge, or multiple edges, and our reactions are different. The box above shows some typical reactions at the edge. All of them are defences that help relieve our anxiety. Recognising our habitual reactions at the edge enables us to choose to do something different.
But the edges – this space between the known and the unknown – are where the opportunities lie to be generative and to create something new. It is much more than uncertainty. Children do not feel uncertain thinking about what their birthday present might be; they are curious, excited, and engaged in imagination. We interviewed those who saw the unknown as a place of opportunity and whose professions encouraged them to engage actively with the unknown to create value. These included entrepreneurs, adventurers, scientists, artists, CEOs, and even a Zen master.
From our research we discovered that learning to engage actively with the unknown does not mean ‘adding’ more skills and competencies but rather what the poet Keats called ‘negative capabilities’: making space for the emergent.
Below are the four main principles that came out of the research:
Empty your cup
There is a quote that says: “In the beginner’s mind are many possibilities, in the expert’s mind there are few”. Often the first step in engaging with not knowing is recognising the value of being a beginner, and the innocence in naiveté. Experience tends to frame our outlook in a particular way of how things ‘should be done’ but better solutions may exist. An example is one of the first micro-credit banks, started by Nobel Prize winner Mohammed Younnas. Speaking at the One Young World Summit in 2012 Younnas described how important his lack of knowing about banking was: “Not knowing something can be a blessing sometimes. You are open, you can do things your way without worrying about the rules and procedures... I could try because I didn’t know anything.” Christian Busch from the London School of Economics writes that micro-credit, mobile banking and micro saving are all innovations that have come out of contexts where there was no real infrastructure in place or pre-existing conception of ‘how things are done’. These examples illustrate how a ‘don’t know mindset’ can trigger innovation without the baggage of history.
Close your eyes in order to see
In our book we share the story of Marco Antonio who has won awards for his photography, and is blind. His photography process involves visually impaired people using all their senses in order to produce an image. Sound is a reference to know where the subject matter is and also to identify distance and heights. To frame the photo they open their arms at an angle of 75 to 80 degrees, the same as point and shoot digital cameras. Using touch they can gather additional information, such as texture of the object.
The point is that often in attacking complex problems we tend to use familiar or habitual sources of information. By opening up our other senses, sharpening our capacity for observation, deep listening, and challenging assumptions by staying with questions longer, we have the opportunity to generate new data, which leads to different choices.
Nicolas Petrovic, CEO of Eurostar, describes creating a culture in his management team that values questions as much as answers: “When you go down the line from the top, most senior managers and middle managers are experts. They have credibility in knowing their stuff...part of creating a culture of not knowing is encouraging them to step back out of the detail and to sense check themselves and their decisions.”
Leap in the dark
From jazz to improvisation and comedy skills, managers have been learning from the arts how we can be in charge but not be in control, and learn to work with what is happening rather than what we think should be happening. Adopting core frameworks that give just enough guidance and boundaries that enable freedom rather than constraint allows us to ‘say yes to the mess’ and create harmony from what could be disruptive or discordant. This principle is about experiment, exploring and embracing mistakes.
An example is the value of generating multiple hypotheses, and is embodied by the company Intuit. Co-founder Scott Cook argues that instead of being guided by the opinion of the boss in decision-making the emphasis is on getting people to make decisions based on their own hypotheses and experiments. In a project where they sought to increase incomes of farmers in rural India by 10%, rather than having one solution, they generated more than a dozen experiments to test different hypotheses. Farmers reported a 20% increase in income.
Delight in the unknown
Charles Handy once said: “We have learned that the past will be a poor guide to the future and that we shall forever be dealing with unanticipated events. Given that scenario, organisations will need individuals who delight in the unknown.”
Here we highlight the role of humour, curiosity, lightness and compassion. Managing others and ourselves in a VUCA world can be incredibly stressful. Jeff Weiner, CEO of LinkedIn, is known to talk about compassion as the centrepiece of his management style. He describes how compassion requires slowing down and taking the time to truly listen to others. For him being compassionate means understanding where people are coming from, and caring about the struggles they face.
Though not knowing may seem hard to bear at times, leaving us with worries and uncertainties both in our professional and personal lives, to be human is to live with mystery and with the unknown. We are blessed with the gifts of curiosity, wonder, excitement and possibility. All are essential qualities that can enrich management life.
Steven D'Souza is an associate professor at IE Business School. He is co-author (with Diana Renner) of Not Knowing: The Art of Turning Uncertainty into Opportunity