Over the past few years, businesses have been heavily scrutinized when a catastrophic disaster or event occurs. Journalists probe deeply into the events and uncover the early warning signs of disasters and questions leaderships’ abilities.
This often paints a picture that the disaster was avoidable. As a result, more and more companies are held to a high level of accountability for preventing such catastrophes. With that, companies need to ensure that their leaders and teams are equipped to identify and manage the early warning signs of potential disaster. These early warning signs are better known as ambiguous threats.
What is an ambiguous threat?
Ambiguity is defined as the lack or absence of clarity. One way that ambiguity arises in business is lack of clear communication from leadership. Employees are left to interpret and or create their own direction, usually causing frustration.
Another way ambiguity arises is from events that change the workplace, competitive landscape, or overall market. These events can be innocuous or, in the case of a pandemic, can be very overt. The subtle and innocuous events are known as ambiguous threats. It is an event that can cause an organization harm, and where the extent of the harm is unclear.
Examples of ambiguous threats in business
There are many examples where an ambiguous threat has caused irreversible or even catastrophic damage to an organization.
Film company Kodak did not see the early warning signs of the decline in film use. It struggled to gain the skills to reinvent itself as a company, despite having the initial lead in the digital photo segment. This ultimately led to the company’s demise; Kodak filed for bankruptcy in 2012.
Other times, the inability for leaders to recognize a threat has led to catastrophic damage. Take the early warning signs that the Bush Administration received about Al Qaeda’s potential attacks. Dismissal of this information contributed to the lack of preventative respond to the September 11, 2001 terrorist attack.
Developing leadership for managing ambiguity and responding to ambiguous threats
According to Microsoft CEO Satya Nadella, the ability to create clarity is one of the most sought after traits of a leader. This is because in times of ambiguity, employees look to leaders for clarity as a sign of confidence. Equipping rising stars with the skills to deal with ambiguity ensures that the company’s future leaders can navigate through crisis.
One way for future successors to develop these skills is to have them take on them smaller, unstructured projects, such as breaking into a new market or creating a new business model. This will force managers to use their creativity and resourcefulness in order to succeed in place of providing them with a playbook. Managers will have an opportunity to exercise and develop their creative problem-solving skills.
How to deal with ambiguous threats
Companies can also engage in activities that help their team build the skills to identify, manage, and neutralize an ambiguous threat. The process includes three key steps:
- Have teams practice working under pressure – while it is impossible for companies to develop a disaster response plan for every potential scenario, what they can do is have their teams practice responding to catastrophes. This will help the team build the skills for working under pressure. Schedule rehearsals for different scenarios so that teams can experience a range of disasters. Through practice, the team will develop their own playbook on how to work together through the unforeseen.
- Facilitate environment that allows for early detection – there are many psychological factors that prevent managers from heeding to early warning signs. To address this, the organization should facilitate ways to amplify early warnings. Ways to do this include having the team engage in an open discussion on anomalies in data; during the discussion managers should encourage all possibly scenarios and welcome dissenting opinions without any retribution. Another method that project managers use during a project kick off is to exercise in a project pre-mortem where team members brainstorm anything and everything that can go wrong with a project.
- Engage in low-cost, rapid experimentation – once an ambiguous threat is identified, companies need to engage in rapid experimentation in order to analyze and understand how to neutralize the threat. Rapid experimentation should be iterative and should be designed to give the team enough information to analyze and inform a decision. Rapid experimentation can come in the form of prototyping or stress-testing.
- An ambiguous threat is an event that can cause an organization an uncertain degree of harm
- Managers can develop skills for dealing in ambiguous scenarios by taking on small unstructured projects where there is no playbook to guide them
- Leadership can engage in a process to neutralize ambiguous threats by having teams practice working under pressure, creating an environment for detecting early warning signs, and developing skills and capabilities for rapid experimentation