Dealing With Uncertainty

Introduction to Uncertainty

Based on all that’s going on in the world right now, I thought it worth diving into the concept of uncertainty a little more.

The Cynefin Framework

And go through a model I was introduced to over ten years ago that helps me when things are uncertain, complex, ambiguous, or just plain confusing. It’s a model called Cynefin.

The Two Sides of Cynefin

The Ordered World

In the ordered world, we can work out the answer quite easily. Sometimes it’s obvious and sometimes it’s complicated. Either way, with a bit of work, we can figure out the solution and roll it out.

The Unordered World

The unordered world, though, is messy. Sometimes we think when we do X, we will get Y. Sometimes when we do X, we do get Y. But other times when we do X, we get something else altogether. It’s only in hindsight, after the fact, that we can look back and potentially see the patterns we couldn’t see when we were in it.

Sometimes, the world is just downright chaotic where no pattern emerges or repeats.

Techniques for Different Worlds

What this model tells us is don’t use ordered world techniques to solve unordered world situations. If the world is unordered, your best solution is to try something. Snoop around, get a feel, and attempt.

The Probe-Sense-Respond Approach

Probe > Sense > Respond

By doing this, you will get a feel for what might work. Try it out, and if it does work, do more of it; if it doesn’t, do less of it.

Application to the Tariff Situation

Applied to the tariff situation, most finance people are probably right now doing scenario planning and getting nowhere, as there are just too many variables. Some of which you haven’t even considered or can see just yet.

A Technique for the Ordered World

It is a technique for the ordered world, not the unordered world. Instead, try something small, make sense of it, and respond. Once you have a read and are a bit more certain, then apply your ordered world methods like spreadsheet models, scenario planning, and AI-generated algorithms to that outcome.

The Importance of Flexibility

Doing this will not only save you time, but it will also help you progress more quickly.

Real-World Example: Trump’s Approach

It’s pretty much what Trump is doing—lifting the rug, shaking the dust, and seeing what happens. He’s just doing it with high stakes.

Conclusion: Embracing Cynefin

If you want to know more about Cynefin and how it can help finance teams, just message me. Once you understand it in detail, your decision-making, critical thinking, and ability to operate in a fluid world will improve tenfold.