- Overcome your fear of the unknown
- Fill in the gaps in your knowledge
- Stay positive
- Trust your judgement
- Recognise that bias may hold you back
A period of uncertainty
Most people will agree that this is a relatively long period of uncertainty for business. Brexit, a pandemic, supply chain disruption, war in Ukraine, rampant inflation and now a change of Prime Minister. It seems that the pandemic changed a little more than our working habits and social lives.
If we translate this into the mind of a CEO, it presents a number of problems. Firstly, supply chain disruption is ongoing. With a persistent shortage of semiconductors, some shortages in lorry drivers, war in Ukraine and post-Brexit confusion it makes obtaining and transporting raw materials or components more difficult. Secondly, costs and therefore prices continue to rise off the back of oil, gas, electricity and input price inflation. The additional cost of exporting post-Brexit and of providing short-term cover for COVID absence continues. Thirdly, we are just getting to grips with what the political turmoil of Boris Johnson’s resignation means for business. Initially, it provokes uncertainty over the tax regime but also about the future leader’s priorities from the levelling up agenda to net zero and even Brexit.
Making good business decisions
Most business leaders believe and trust in their ‘gut’. Their initial reactions to many challenges are correct and this proven decision-making ability stands them in good stead. But, that is often the case with a single issue, crisis or investment decision. It is perhaps less effective when everything around them is fluctuating. Many leaders are wondering what else can happen to keep them awake at night?
Crucially, there are 5 steps that we recommend to make business decisions during uncertainty.
1. Overcome your fear of the unknown
Those who view our primitive ‘fight or flight’ response to the unknown as a hindrance in business more quickly overcome their fear. Fear causes irrational thoughts and erratic decision-making, neither of which is helpful to business leaders. Recognising that this part of the brain has failed to evolve since the days of hunter-gatherer is crucial.
2. Fill in the gaps in your knowledge
Uncertainty increases when we don’t have all the facts to hand or we don’t fully understand the situation around us. This is a great time to do your homework. So, look for opportunities in the market, find out what customers need, serve them better and seek help to target them.
3. Stay positive
Positive thoughts give your mind a sanctuary from uncertainty and fear so embrace anything good that you have experienced recently. The power of positive mental attitude is well-documented and it is especially helpful right now to give yourself the ‘space’ to think.
4. Trust your judgement
Successful people usually get to where they are for a reason and that reason is often sound judgement. Command over your own responses, scrutiny over facts and figures and the humility to make decisions based on the best available information now.
5. Recognise that bias may hold you back
The human capacity to deal with uncertainty is low and we try to take irrational shortcuts to decisions, so take your time and evaluate. This is the most important time to identify your own personal biases and blind spots. The anchor effect, the availability heuristic and confirmation bias are three potentially dangerous forms of bias during uncertainty.
Uncertain decisions or deciding to be uncertain
Not all businesses see uncertainty as a bad thing. Many companies view uncertainty as ‘keeping everyone on their toes’. Others view it as ‘keeping things interesting’ or providing an environment for creativity and agility. However, humans generally cannot cope with much uncertainty. Studies show that faced with escalating levels of uncertainty, such as when limited information is available upon which to base a decision, decision-making worsens. This is because many people migrate towards a heightened state of anxiety in such cases. Fear and panic can cause erratic behaviour as emotions take over decision-making.
Furthermore, a glut of choices to try to outmanoeuvre business uncertainty can leave us feeling overwhelmed. We humans can only cope with a few choices at any one time. Additional choices tend to lead to anxiety or paralysis in decision-making. So, try to imagine all the variables and choices available to business leaders. Inaction can be disastrous to the same extent as the wrong action can be catastrophic. When orders dry up and the cash is not coming in, the context for decision-making becomes urgent, circling back to fear and panic. The fear of the unknown is one of our most fundamental fears and humans have evolved to plan, assemble resources and implement said plans to reduce uncertainty. The challenges are time, money, resources and the skills to rigorously plan during such times.
Helping you to make great business decisions
As an award-winning management consultancy, we offer an external critical friend and a source of skills and information. During periods of uncertainty, as the demands on your time increase, we step up to research, plan and present options for change. Here at Think Beyond, we support business leaders with troubleshooting, assurance and analysis which is especially important right now. In summary, we support the decision-making process to give you the space to make the right decision.
If you would like to speak about your business decisions, simply call us on 01565 632206.
Alternatively, why not email us at sales@think-beyond.co.uk or ask us to call you back online.
Finally, if you have 5 more minutes, check out our guide to troubleshooting