Keywords: Business uncertainty;commercial good practice;Donald Rumsfeld;pattern of uncertainty
Uncertainty is a "force" that shouldn't be ignored
A wealth of work on the topic had been published, but as much of it was written by academics, it was theoretical and not based on commercial good practice. Much of it was dated and nothing had been written since the global financial crisis that unleashed a new era of uncertainty for organisations to cope with. Our initial instinct that the 2008 crisis was out of the ordinary proved correct. When it occurred, many senior executives assumed that it was another turn in the boom-and-bust cycle that had characterised macroeconomics in developed economies since the end of the second world war. They reacted accordingly, cutting costs and “hunkering down” for what they supposed would be a painful but short period of austerity. However, the crisis has ushered in a period of unprecedented uncertainty, with the economic unknowns augmented by political and social unknowns arising from such developments as the Arab spring and the anti-capitalist and anti austerity protests in a number of developed countries. Business uncertainty is here to stay. Not for nothing did a secretary-general of the United Nations recently comment that the first years of the 21st century may well prove “a decisive moment in the human story”, requiring co-operation by politicians and business leaders across all boundaries to respond to the interconnected threats the world currently faces.
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 ones we don’t know we don’t know.
Donald Rumsfeld, US defence secretary, 2001–06
Historians may well look back on the first years of the 21st century
as a decisive moment in the human story. The different societies that
make up the human family are today interconnected as never before.
They face threats that no nation can hope to master by acting alone
– and opportunities that can be much more hopefully exploited if all
nations work together.
Kofi Annan, UN secretary-general, 1997–2006
Donald Rumsfeld got it right. When he used the above analogy, he was speaking at a press briefing in 2002 about the absence of evidence linking the government of Iraq with the supply of weapons of mass destruction to terrorist groups. His words were criticised at the time as an abuse of language by, among others, the Plain English Campaign. However, Geoffrey Pullum, a linguist, disagreed, saying the comment was “completely straightforward” and “impeccable, syntactically, semantically, logically and rhetorically”. Whatever the rights and wrongs linguistically, the quotation provides a perfect starting point for this book. We are now living in a world which combines known knowns, known unknowns and unknown unknowns, and the growth of the last category presents business leaders with a new and little-charted management challenge.
The uncertain world order
The need to focus on the challenges of an uncertain world has never been more urgent. Much of the academic and consultancy work undertaken on managing uncertainty was conducted in the 1990s and the first few years of the 21st century and the resulting analysis was largely theoretical. Furthermore, it is now apparent that the research and analysis were carried out during a period when world economies were enjoying what proved to be an Indian summer of growth and stability.
New patterns of uncertainty
Arnoud De Meyer is a former professor of management studies at INSEAD, an international business school, and the Judge Institute of Management at Cambridge, and now president of the Singapore Management University. De Meyer anticipated Rumsfeld’s analogy when he postulated four types of uncertainty that firms may encounter as separate phenomena or in some form of .... Download the entire article
