Uncertainty Mindset

Having an uncertainty mindset means accepting, even relishing in the fact that there is no way to know in advance what the correct course of action is.

An uncertainty mindset is counterintuitive and uncomfortable. It’s not human nature to embrace the unknown. It scares us. When we are confronted by it, we ignore it, we run away, or we label it in ways that allow us to dismiss it.

Things that have never happened before happen all the time.

Working in uncertain environments require innovation. There's a tradeoff between innovation, efficiency, and predictability.

There's an optimistic and pessimistic sides of uncertainty mindset: the optimistic side, which is what is mostly covered in the book, is about maximizing upside through innovation. The pessimistic side is about minimizing downside, through preparation and being antifragile.

Note that uncertainty is different from risk. Risk is a chance of loss. uncertainty is more closely related to variance. Though they are also not the same. For example in roulette, you can be certain about the amount of variance in a spin of the wheel.

Most clearly defined by Donald Rumsfeld infamous "unknown unknown" quote:

"Reports that say that something hasn't happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns - the one we don't know we don't know. And if one looks throughout the history of our country and other free countries, it is the latter category that tends to be the difficult ones."

Uncertainty vs Efficiency

Working with uncertainty requires tolerating what appears to be inefficiency. You cannot be fully optimized and ready for uncertainty. super-optimized systems are less flexible, and thus more fragile.

Non-Predictable Events

Uncertainty does not deal with the future and prediction. It's a way of dealing with events that never could have been predicted.

Favor preparation over prediction. Think of emergency funds as an example. You don't know what could go wrong, but you do know that over long enough time horizons something will definitely go wrong.

Companies that are well-primed for these approaches:

  1. startups in emerging industries. examples include quantum computing, legally product cannabis
  2. startups disrupting established industries.
  3. Leading incumbents in rapidly and unpredictably changing industries.

Six Innovation Insights

  1. modular, provisional roles lead to adaptable organization members
  2. Continually adjusting member roles leads to responsive, adaptable, high-performing organizations
  3. Choosing to pursue open-ended goals permits and encourages familiar innovation
  4. Organization members learn how to pursue open-ended goals by doing actual and consequential work.
  5. Innovation work is best motivated not with carrots but with well-chosen sticks.
    • "Innovation work is uncertain and fraught with failure - it is cognitively desirable but emotionally challenging.
  6. carefully designed progressive overload pushes organizations to adapt and innovate.

Further Reading