How Uncertain Is the Future and What Does It Mean for Decision-Making?


3 min read

The illusion of control

Is the immediate future any more uncertain than it was in January? Or back in January, were we just kidding ourselves that we had things under control? And today, what’s changed is our viewpoint — our very human desire for certainty has been given a big slap in the face. And as we regain our bearings and attempt to make sense of the world, we see that the control we thought we exercised, is actually very weak.

I learned this lesson as every new mother does — a tiny baby wields terrifying power. And after turning up 7 weeks early, I realised my son was capable of anything. I was most certainly not in control. I sought solace in accepting that whatever the future held, I was not boss of it and that was OK. I just needed to decide on the next right thing to do.

Humans have a psychological aversion to uncertainty, Rich Mayson, writes well on this topic. As an ex-marine, he explains that uncertainty causes stress. On the other hand, the certainty that each day will be very much like the next during childhood, is one of the biggest determinants of whether you become a confident adult. Confidence instils in us an illusion of control over the world around us. Our desire for certainty is ingrained. Further, certainty is rewarded in capital markets; volatile results (beta) are penalised.

Today is not more uncertain

Let’s accept that today is no more uncertain than it was months ago. We are simply more aware of the uncertainties.

And with that frame of mind, can we get on with our lives more easily? In particular, can we make decisions without being fazed by the real or perceived uncertainty we face? Camus said “we are the sum of all our choices (decisions)”. So we owe it to ourselves to make good decisions. And anyone exercising decisions in public life or indeed the boardroom has a duty to do it well. Fortunately, years of research and our own boardroom observation have pointed to doing a few things well. Here’s what we’ve distilled it down to — 5 tenets to help you decide.

Start by agreeing who needs to be involved in making the decision. Who’s the ultimate decision maker? Which experts will you consult? How will you ensure the right voices are heard? In times of crisis, knee-jerk reactions, that dispense with these basics, may not be wise in the long run.

5 questions to help you decide

With the actors known, get ready to decide by considering the following five questions. These principles can be applied to any significant decision, at any level in an organisation. One further suggestion — write down the answers to the questions and share them with the decision-making forum as a pre-read. Use whatever format works — an email, a memo, a board paper. Why do this? Discipline.

1. What are we solving for?

Clearly state the issue you seek to solve by making a decision. Your decision makers should be convinced that a decision is actually required. Be sure to include why your proposal is relevant and timely.

2. What is the proposal and rationale?

Set out your proposal, the expected benefits, and resources (people, funds) required. Outline your evaluation criteria (financial and otherwise); or the evidence that supports your choice of proposal. This should make plain why your favoured proposal is the preferred option. A business case will be required for decisions entailing funding of above £xm.

3. What alternatives did we explore?

A decision cannot be made with a singular option to choose from. At minimum, evaluate the option of “doing nothing”. Alternatives do not need to be explored at the same level of depth as your proposal. But some degree of evaluation against assessment criteria, and reasons for rejection, is required. At its simplest, this could be a discussion of pros + cons and risks + mitigations.

4. What is the ask?

A decision being taken is not the same as making it happen. Most decisions fail because the right people are not involved at the right time. Therefore, clearly state the “ask” — of the decision maker(s) and of the people responsible for execution. The “ask” is sometimes also called the “input sought” — be explicit about the nature of the ask, what do you want? A decision, funds, time, skills, sponsorship, accountability etc. Also, consider those affected by the decision (internal and external), how will it impact them? The bigger the decision, the more important it’s you involve the right people to ensure success.

5. What needs to happen next?

Set out how you will implement the proposal and address any important unanswered questions. Also, outline any further approvals (financial, people) that may be required and the timeline. One final point, what are the implications of delaying or rejecting the decision to progress?

Answering these five questions will give you greater confidence in making some very difficult decisions well. Doing the next right thing becomes much easier when you can take comfort that your decision — with limited information and necessary haste — was well considered.

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