Eric Allais is President & CEO of PathGuide Technologies, which provides warehouse management and shipping solutions for distributors.
The past few years have tested even the most experienced business leader trying to anticipate what’s around the corner. The pandemic, supply chain shortages, great resignation, historic inflation and the threat of recession have each, in their own way, created an environment of uncertainty. I’m often asked what makes navigating such an uncertain future possible.
While relying on guesswork to make decisions is not something they necessarily teach in business school, the ability to do so confidently is increasingly important. One leader who I believe had a knack for making seemingly wise business decisions based on informed guesses was Apple co-founder Steve Jobs. To use a baseball metaphor, Jobs seemed to never strike out. He consistently introduced products and technologies that changed our lives and grew Apple into one of the world’s most successful, profitable and admired companies.
Now, most of us can only dream of having a superpower like Steve Jobs’. For the rest of us, should we embrace guessing as a valuable tool for decision-making? Without a doubt, the answer is yes. With this in mind, let’s look at seven strategies that can help leaders navigate uncertainty in the corporate world while still making confident business decisions:
1. Learn from the past.
Business leaders facing uncertainty or doubt should start by reflecting on the past as a guide for the future. Reviewing historical data and studying past trends can provide insights into what worked previously (and what hasn’t). One example of this rear-view mirror approach in action is letting the past help guide the future with respect to forecasting financials. When it comes to finding the right options for future growth, do you trust your team’s ability to guide you there? Your past experiences—both the successes and the difficult lessons learned—become critical in helping you make more informed guesses about the future of your business.
2. Exercise caution in guesswork.
Relying solely on guesswork, especially when there are limited facts or perspectives on an issue, can be short-sighted. Making decisions in a vacuum—without considering diverse opinions—can lead to dead spots and missed opportunities. However, when you establish effective communication at all levels of the organization, reasonable guessing naturally becomes more acceptable. Ultimately, leaders with a track record of making the right choices despite limited information may be encouraged to engage in even more informed guessing.
3. Sharpen guessing and assumptions.
Intuition plays a critical role in the “when in doubt, guess” approach. By honing one’s intuition through experience, a leader can introduce assumptions to fill the gaps where information is unknown or unavailable. That experience becomes key to sharpening assumptions when seeking to achieve a desired outcome. Leaders who trust and successfully combine their instincts with informed guessing will be in a much better position to make more confident business decisions.
4. Gather insights and involve others.
Of course, trusting only a guess isn’t a healthy approach either. Do your own research to make sure you understand the target end goal or audience. In addition, getting stakeholders involved in the process ensures third-party buy-in and can help reduce risk. You can also learn from others’ mistakes: New Coke is one example of a failure that had to be walked back just a few months later. Take the time to do your research, understand your audience the best you can, test the market if necessary and collect feedback from sampling customers. Fight the urge to bet the farm if the risk is too large, as the negative PR could be even worse.
5. Foster experimentation and embrace the unknown.
Leaders can also create a culture that encourages experimentation by giving teams space to test, learn, rinse and repeat. However, it’s also important to get firsthand feedback from a good cross-section of customers. Solicit their input on prototypes or during beta testing and invite the power users among your customer base to help shape the future of your product, service, etc. This process will allow leaders to improve their confidence level in making informed guesses, which ultimately gives them a leg up on the competition.
6. Explore possibilities and assess probabilities.
Keep an open mind when opportunities arise. Equally important is the willingness to redirect efforts or cut losses when necessary. It’s best to pull the plug and redeploy resources so you’re not throwing good money at potentially bad outcomes. For example, when presenting an idea with investment implications, it’s important to drill down on the numbers and thoroughly understand the potential return. By considering all the scenarios from worst-case to best-case, you’ll be able to find the expected case somewhere in the middle. Regularly assessing progress toward the expected case helps effectively manage risk and resources along the way.
7. Strike a balance between data and informed guessing.
Data-driven decisions are only one aspect to consider in making good decisions. Leaders are encouraged to be skeptical of data and its source. Was it gathered and cherry-picked to build a best-case scenario? When evaluating employee compensation, for example, it’s useful to know what the market is paying for given positions and which skills are desired. Conducting research, cross-checking assumptions and considering market benchmarks can strengthen the foundation of your compensation assumptions around employee performance, longevity with the company, contributions to the business and so forth. Leaders have plenty of tools to help them make more informed decisions. You can improve your guesswork by using those tools to analyze data—just be sure to compare it against what you already know.
Great leadership is often defined by an ability to make informed guesses. Steve Jobs is a leader who I believe was able to do just that. All he did was introduce new products and technologies that completely changed the way we live, work and play. While Jobs’ foresight is legendary and rare, we all have something to learn from his ability to create such a predominant technology company; however, if you’re not as risk-averse as Steve Jobs was, try leaning on the seven strategies above to enhance your guessing skills.
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