part 2 of 10 of the Thriving in Uncertainty Series
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Estimated reading time: 6 minutes
In 1997, IBM’s Deep Blue supercomputer made headlines by defeating world chess champion Garry Kasparov. It wasn’t just a win in chess—it felt like the dawn of something bigger. Just a year earlier, Kasparov had beaten the machine, but this time, the tables had turned. It made people wonder: if machines could outthink the best in chess, what could they do in other areas? It was a clear signal that technology was going to start changing the game for all of us, including how we think about problem-solving in fields like finance, technology, or healthcare.
Fast forward to 2009, and the story took a tragic turn with the crash of Air France Flight 447, traveling from Rio de Janeiro to Paris. In just 4.5 minutes, the plane plunged 11 kilometers out of the night sky into the ocean. Despite the advanced technology on board, autopilot and sensor failures left the pilots unable to react in time, and all 228 lives were lost. It was a stark reminder that while technology is powerful, it is not foolproof—when it fails, the consequences can be catastrophic.
Fast forward one more time, to 2018. Tragedy struck when Elaine Herzberg, a pedestrian in Arizona, was killed by a self-driving Uber car. The AI failed to recognize her as a pedestrian—it saw her as some kind of object on wheels and didn’t “realize” it needed to brake. It was a chilling reminder that even the most advanced systems can make fatal mistakes.
Critical Lessons For All of Us
These events illustrate a critical lesson for all of us: while we can predict and manage risk in some situations, true uncertainty defies calculation. It lurks in the shadows, waiting to catch us off guard, and it reminds us that not all situations lend themselves to algorithms or are indeed controllable.
As intriguing as these stories are, they carry a deeper message for all of us. They remind us that we can’t control everything despite all our efforts. Uncertainty is the only certainty we can rely on. In the world of business, at home, and even in extreme environments, we often set clear goals and craft detailed plans. But the reality is that success and happiness — both at work and at home — come not from rigid planning but from resilience, learning, and adaptability.
Risk and uncertainty are often confused, but they’re not the same. Risk can be measured and managed. Uncertainty, however, is unpredictable—and it’s growing because our systems, from finance and trade to health and energy, are becoming more complex and interconnected. As a result, navigating uncertainty is becoming a critical skill for financial advisors, leaders, clients, and customers alike.
This is the second of a 10-part series about Thriving in Uncertainty. Here, I aim to share tools and frameworks that can help us thrive in this increasingly uncertain world. We’ll explore how to build adaptability, develop resilience, and embrace learning to succeed in both business and life.
This is a conversation we all need to be part of. In my view, managing uncertainty will be one of the biggest challenges we face in the coming years. Do you agree?
Comment on this post or send me a private message to share your thoughts, stories, and feedback. Let’s tackle this challenge together and shape a future where we lead with confidence, no matter how complex or uncertain things become!
The Difference Between Risk and Uncertainty
In business, finance, or even personal life, risk and uncertainty are often misunderstood as one and the same. But they are far from identical. Risk is quantifiable. It’s what we face when we know the possible outcomes — even if the probabilities vary. Think about a stock investment: we understand market fluctuations and can estimate potential gains and losses. Even for a lottery ticket we can calculate the probability of a winning ticket.
On the other hand, uncertainty is much harder to define. It represents situations where not only the outcomes are unknown, but also the variables that influence those outcomes. Consider the COVID-19 pandemic — an event that no model fully predicted. The world was thrown into chaos because we didn’t have the information to even imagine such a scenario unfolding. In uncertainty, the possible outcomes are unknown and open-ended and there is no clear way to calculate probabilities, which means the conventional rules of risk management don’t apply.
In business, we can prepare for risks by analyzing past data, understanding market conditions, and creating contingency plans. But for uncertainty, where unknown unknowns prevail, resilience and adaptability are the only real defences.
Adapting to Uncertainty: Lessons for Leaders
Uncertainty is inevitable. It’s not just about preparing for what you know could happen, but learning to adapt when the unexpected arrives. Leaders, especially those in finance and business, can take several actionable steps to navigate uncertainty effectively:
- Focus on Building Flexibility, Not Just Efficiency While efficiency is important, flexibility is critical in uncertain environments. The more rigid a strategy, the more likely it will break under pressure when the unforeseen occurs. Ensure that your business plans, investments, and client strategies are adaptable. This means creating pathways for pivoting when necessary, and not being overly committed to one specific course of action. And remember that pivoting is not a mistake or a failure, but a smart strategy to adapt to changing circumstances.
- Embrace Learning as a Core Strategy Continuous learning is essential when dealing with the unknown. Encourage your teams to remain curious and open to new information, especially when faced with unexpected challenges. In finance, this could mean staying abreast of emerging market segments, new regulations, or innovative technologies that could disrupt the industry. The more knowledge you accumulate, the better prepared you are to adapt.
- Cultivate Resilience Over Perfection Perfection in an uncertain world is an illusion. Instead of striving for perfect plans, focus on resilience — the ability to recover and adapt after setbacks. Whether it’s a market crash, a global crisis, or a personal failure, resilient leaders can pick up the pieces and move forward with confidence. This means ensuring your strategies and your clients’ financial plans are built to weather the unexpected and bounce back from adversity.
- Prepare for the Unknown Through Stress-Testing While you can’t predict every event, you can prepare for the possibility of disruption by stress-testing your business and investment strategies. Ask yourself and your clients: how would our portfolio or plan hold up under different scenarios? What would happen in the event of another financial crisis or market collapse? By simulating worst-case scenarios, you can help clients prepare mentally and financially for potential upheaval. Again, it isn’t so important to get the scenario right, so much as preparing everyone mentally and emotionally that such upheavals will happen.
Facing uncertainty head-on will be one of the most critical skills in the coming years. Do you think we’re ready? Share your perspective by commenting below or sending me a private message to keep the conversation going.
Next Edition
In our next edition, we’ll explore how success and happiness are byproducts of your journey, not the ultimate goals themselves. Stay tuned as we dive into the importance of focusing on the process, not just the destination!
