Your Organization Must Excel at Ambiguity

Change is not linear and the need to adapt with change is constant. 

This means that the entire basis of your success – everything that you did yesterday, last month or last year faces obsolescence tomorrow. 

Not everything will be obsolete, but something will, and everything is up for grabs.  Something will be different tomorrow, but you can’t know what. 

So, your organization must learn to deal with this ambiguity. 

The traditional model of building an organization suggests that the lowest risk pathway to grow and succeed is to focus on market penetration, selling an existing product into an existing market.  The organization figures out the right equation A+B = C and repeats this over and over. 

Risk, in this model, increases with newness: a new product in a new market being the riskiest.  Change A or change B and you don’t know what will happen. 

But the pace of innovation has disrupted this thinking, now the only thing you know for sure is that the market you are in, your current equation, will face disruption.  Instead of taking for granted that the market will stay the same, you must take for granted that the market will change.

Operating in the same market is not an option because it won’t exist. 

If you were a taxi driver in New York just a few years ago, you rented or bought a medallion, you put in the hours, and you knew what to expect from your earnings. 

The medallions themselves became an asset and the whole system was built around a clear, well defined structure.  Add investment (A) to time (B) and get a return (C).

And then Uber came along and the whole game changed. 

All of a sudden there were many ways to get to C and this led to a flood of new innovations and pretty soon taxi ridership evaporated, medallion value plummeted and the whole system began to fall apart. 

Organizations that focused on the old model: same product in the same market, faced extinction.  The only way to effectively compete, the only way to survive is to reinvent. 

This is happening is every industry everywhere.  The speed of communication and the speed of innovation is constantly driving new ideas and new concepts. 

This means that companies must focus on constant reinvention. 

They must always look forward and step into reinvention.  When they don’t, when they rely on the information that they already have, when they expect the market to be as it was, they face extinction. 

This is not natural for organizations. 

It feels uncertain and organizations abhor uncertainty.  But certainty leads to extinction, it is those companies that can deal with ambiguity, that can constantly advance into new products and new industries.

The new challenge is to build an organization that can work with ambiguity.  They have to create the structures and processes to integrate new concepts into their operating models. 

This means focusing on what is possible, looking forward and outward for clues and implies:

First, your organization must have a clear long-term objective that is bigger than the current market.  You have to look forward – taxi companies can’t just be the best taxi company, they have to build something bigger.  They have to look much more broadly at their business and create a vision that is clear and engaging.

Second, constant communication, throughout the organization is key.  It used to be that experience at the top was all that was needed.  Now information rules and you must integrate from the front lines to the top of the organization.  You need as many eyes and ears as you can muster.  This also means that silos cannot operate as silos, they must be porous and share information naturally.  Transparency is key. 

Third, change must become a core competency.  Organizations focus on core competencies to enable efficiency.  That is important.  Since change is constant, change must become one of those core competencies.  This means shifting and adjusting quickly and continuously in order to adjust to new challenges while remaining efficient and focused. 

This may sound daunting, but it is simply a new way operating and a new way of structuring the organization. 

Dealing with ambiguity is the reality we face, and your organization must find a way to adapt.