How Can I Overcome Ambiguity Bias and Manage Change?

Foresight: Crying Wolf Early

There is a paragraph in every scientific paper that describes its relevance. Since the 1950s, papers on foresight claim relevance because of increasing turbulence in the business environment. Before the 1950s, the foresight field did not yet exist.

In 1947, automaker Ford established an automation department. The department marked a new era, in which companies automated production and newspapers reported on the fear that people had of automation taking their jobs. No wonder that the foresight field started then. From the outset, foresight positioned itself as the boy crying "Wolf" early, so that you can still take the necessary measures and job loss can be avoided. It immediately became extremely important to not raise false alarms. 

Wanting to Know: What Wolf, When.

So instead of exploring signs of change, foresight scholars developed the concept of flexible strategic pathways. No matter the shape of the wolf, the company would have strategic options in place to switch course if necessary. Sadly, hard wired personality traits prevented the large scale adoption of strategic planning. Executives were ambiguity averse, so they did not want to deal with unknown wolves, they wanted to know what wolf when.

Back in the day,  I used to be a professional conference organizer. Dozens of UN conferences and scientific conferences were organized by our team of two. We were able to pull off over 25 big conferences per year, and I'm speaking of the days that the work wasn't yet digitized. It was a LOT of typing and spending time on the phones, but we loved it. We could manage it all because we used the same suppliers over and over again. Not that they were that good. No. We knew exactly what they could and could not do. We had the faults of one supplier covered by another, and we focused on the communication between them. Perhaps another supplier would have been much better. But we'd rather stick with the faults we knew. That's ambiguity bias: a preference for known risks over unknown risks.

The Demo Strategy

Fast forward to our time. We went from rooms with typists, to humming mainframes in the basement to mobile computing in the pockets of our pants and shirts. Since automation, we've dealt with computerization and now we're dealing with digitalization. The next wave is already around the corner: A.I. or 'intelligentization'. So yes, change is still accelerating, and we, executives, still need to deal with it.

Some 15 years ago, I became a futurist because I became convinced that technology will impact every business on earth. Better to find opportunity in change than to see it as a threat. I do love technological ingenuity (yes, gadget freak) and I just want everyone to profit from it. I have learned how to try-out new technologies on my own business and I have also tested lot's of stuff on my clients' businesses. But always as a free bonus on top of my regular work. Naturally, my clients won't take a chance with their clients either. But as change accelerates, they do have to make sense of the future without naming the wolf. And that means trying new things in a small way, so that we can learn what works before change hits us in the face.

That's why I am a firm believer in sampling and piloting. Try new ideas like you would try hair coloring: on a tiny piece of the market, to check that customers and endusers are not allergic and love the effect. It will take little time, hardly any money, and certainly no reputation.

How to Find Opportunities in Turbulent Environments

Are you into to your gut feelings? Many executives use their underbelly as a control. If they have a bad feeling about something, they will investigate more and invest less.

However, there's not much to investigate when the future is considered. Anything can happen: learn from Kodak, who also thought that it was strong and powerful enough to withstand digitalization and that customers would change over generations rather than 5 years. We all know how that panned out. 

So let's use your unhappy gut in a different way. A foresight rule of thumb is that opportunities live in uncomfortable information. Indeed, the information that feels wrong, stupid, ridiculous, or otherwise nonsensical is the one source of change we tend to overlook. We can use that feeling as a trigger to start playing around with absurd ideas and surprise ourselves with a new insight.

Opportunities live in uncomfortable information

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At least file the information and monitor the trend it represents every now and then. It doesn't hurt to let it simmer to see if an opportunity emerges.

Two Tips to Stay Ahead of Change and Overcome Ambiguity Bias

In this article, you've learned about the innate preference for known risks over unknown risks and why turbulence requires us to overcome this bias. You have gotten two tips to work around ambiguity aversion:

  1. Embrace new technologies and apply it in samples and pilots of innovated offerings (the demo strategy). This will help you to get the data you need to judge and decide about innovation and investments
  2. Keep a list of developments that you'd rather want to drop for no explicit reason. Investigate them every now and then (once per quarter is good enough). This will help you to become aware of opportunities sooner

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