Dealing with Uncertainty
...even in companies that do not acknowledge uncertainty
Organizations have different approaches to uncertainty.
Some thrive in uncertainty,
using methods such as bets, experiments, hypotheses, and opportunities to drive innovation. They focus on learning and risk reduction, even celebrating failed experiments as steps toward improvement.
Personally, I prefer this approach because it recognizes that not everything can be known in advance.
Conversely, others shy away from uncertainty,
question investing in uncertain endeavors. They prefer seemingly certain endeavors with minimal risk, often overlooking the value of learning, validation, and hypothesis testing.
Yet certainty remains elusive in both camps. What appears to be certainty often masks underlying uncertainty.
For companies reluctant to embrace uncertainty, several steps can mitigate risk:
Market Research and Analysis: Conduct comprehensive market research to understand customer needs, market trends, and competitor strategies.
Pilot Projects: Implement small-scale pilot projects to test new concepts or products before committing to full-scale development.
Scenario Planning: Develop multiple scenarios to anticipate various outcomes and formulate contingency plans accordingly.
Collaboration: Forge partnerships with other organizations or experts to pool resources, knowledge, and risks.
Customer Feedback: Gather and analyze customer feedback to pinpoint areas for enhancement and minimize the risk of product or service failure.
Expert Consultation: Seek guidance from industry experts or consultants to gain valuable insights into risk management strategies.
By adopting these measures, even risk-averse organizations can navigate uncertainty with confidence, promoting a culture of innovation and adaptability.
What I read
As usual, I will list some of the best articles I read on the Internet. I will keep a list of the best articles (currently >800) at https://www.digital-product-management.com. These are today’s picks:
Prompt engineering: A guide to writing better instructions for AI by OpenAI, the maker of ChatGPT.
Story mapping mistakes: Common mistakes people and teams make when they create and work with story maps.
Canvas Collection: A great collection of many canvases like the Business Model Canvas, Value Proposition Canvas, and many more.
It always depends on what's at stake. If a law must be complied with in order to continue selling products and otherwise thousands of employees would lose their jobs, then you prefer not to have too much uncertainty. If you have a good product and want to develop it further to improve your competitive position, then you can be more daring. In our industry, it has proven effective to use two different processes. An advanced development process for new technologies and a series development process for critical product developments.
Excellent points Benedikt! Have you explore hedging as a way to mitigate risk? In finance it simply means taking a position opposite to your main play. In non-finance situations, it can simply mean diversifying your bets, so that even when things don't work out in one area they do work out in others.