Managing in Uncertainty

Unexpected Outcomes

One desirable side effect of the virus that the world imported from Wuhan, Covid 19, has been the rapid proliferation of use of digital methods in transacting. Every single one of the platforms that support electronic transactions has, in the last 18 months, increased its volume of operation substantially. (Financial Express July 18, 2021 5:30 am, authored by Sheena Sachdeva).

Sometime back a meme was doing the rounds over the internet wherein a hapless parent was at a complete loss to explain how a person eating bats ten thousand kilometers away could cause a shortage of toilet paper rolls in the USA.

It appears that a combination of ostensibly separate independent events like Covid 19 and Brexit is leading to a shortage of food stuff in the UK.

Often, we find unexpected outcomes to a set of innocuous stimuli. None of the above had been anticipated but all of them did occur, catching all of us off guard. Why, do you think, this happens?

Latent Interconnections

This is because in any real-life situation myriad factors, identified or otherwise, get engaged and significantly impact the outcome of any action. These factors are not all stand-alone or bespoke ones but are connected to each other and therefore exert influence both individually and in a combined manner making it frightfully difficult to anticipate the final outcome to any stimulus. Consider, for instance, the handling of the Wuhan virus. As a preventive measure against the terrible virus, the Government of India declared a lock down. Such a restrictive step brought in its wake several difficulties and procuring household goods was becoming a problem. That’s where digital transactions became necessary and people, grudgingly, learnt how to interact over electronic communication channels. Children stuck at home with additional time, because they were unable to go to play and had to attend school from home, explained the mechanics of transacting over the net to their grandparents which, in turn, enhanced digital literacy substantially. Initially haltingly but slowly picking up speed, today substantial growth has been registered in electronic transactions. This now becomes fertile ground for further exploitation of this enhanced literacy. The elderly populace can now participate meaningfully in economic activities from within the confines of their homes that could prove to be a boon, not only for them, but for the nation and society as well.

This simple example highlights a very critical nature of our real-life world: that there is a plethora of factors that exist in any given situation and they are interconnected. This implies that effecting a change in one factor in a particular geography or at a specific point in time could impact another factor that is ostensibly both spatially and temporally far away. Additionally change in one or few factors reconfigures the entire context and requires adaptation to this new context. Given a surfeit of factors such changes are common place and occur frequently.  Results of initiatives taken in such an interconnected environment, are influenced by the factors and their combinations because of which we often find that our initiatives delivering counter intuitive consequences and normally the reason is this particular nature of reality. Interconnections establish relationships that remain unobserved, leading to unexpected results and when we do encounter such outcomes we are caught unawares. Occasionally these may lead to positive results and sometimes to negative ones.

As managers charged with the responsibility of actually operating in such an interconnected world the question that arises is are we equipped to handle such situations? Does today’s management education familiarize us with our operating reality, as it exists? How many times has any student of management heard of an interconnected reality that impacts the outcome of all our actions? One may have been told that external factors are to be considered, but the message is for individual factors and often the solution offered is in countering each of these separately not as an interconnected scenario, which as a moment’s reflection will reveal, is not the same thing. The main reason for this is the basing of all our education systems on the methods of science. Science, as we all know was and continues to be, the most successful discipline ever. The last three centuries have seen advances in scientific knowledge progressively improving the quality of our lives comprehensively.

There are several aspects of science that have been adopted by management studies as well but that do not constitute an appropriate fit for the latter, and these have been discussed at length in my book (Systems Thinking for Effective Managers –The Road Less Travelled; Sage Publications) but I will just present one aspect that perfectly suits the context of science but is clearly inadequate in the context of managing societal entities such as business organisations. Scientists are constantly searching for universal solutions. If your solution to a problem works well in Mumbai and not in Kathmandu, it is not acceptable as a law. Context is ignored when a scientist carries out an experiment in his laboratory, for instance. Requiring it to work in different locations, under different conditions presupposes context free solutions. Contrast this to our experience in managing wherein we need tailor-made solutions to all our problems else they never really work. Context, in real life problems, impacts the solution significantly. From the above narration it is clear why such a policy of ignoring the context does not work: it is because these interconnected factors come into play and not cognizing with this fact renders futile our solutions. Despite being oblivious to the context science has successfully led the movement of change to a vastly improved standard of living throughout the world but that success may not repeat when we use the same principle in managing organisations.

Systems Approach

Naturally the logical question, at this juncture, is how do we overcome this shortcoming in our methodology? Well, the solution lies in approaching our managerial problems through an approach that seriously scrutinizes the context and develops solutions to problems accordingly. Essentially a methodology based upon a holistic perspective that cognizes with the context is needed. Systems Approach is posited in exactly this space and can, if used properly, serve the purpose satisfactorily. In this, a problem is not viewed in isolation but inclusive of the context. In other words, the problem and its context combine is the first port of call for problem solver. Solutions are developed based on the scrutiny of this combination and hence are more tuned to reality than our existing approach. A concept that forms the basis of this approach is that of a system. The definition of a system is beguiling in its simplicity: it is, “a system is a collection of interrelated parts and is open to its environment”. When a problem is considered in conjunction with its relevant context the combination forms a system. The parts are interrelated as discussed earlier and collectively this gives rise to a conceptual holistic entity – a system.

A word of caution needs to be stressed upon at this stage. The holistic approach incorporated through the use of systems lends a direction to any managerial inquiry or the process of developing a solution. Once the direction is established the standard methods of management would of course be applicable.

The problem is contained in the system and so are all interconnected factors. Cues to the solution derive from the system and not merely from the confines of the problem. Typically, such an approach will yield a solution that is in harmony with the context and therefore sustainable. The mere visual display of such a system itself will provide a host of insights. We may discover that some of our actions are inimical to the system? Answers to questions such as “How different is to be our management approach when we operate within the system”. “Will such an approach change our strategy formulation, organisation structuring, work systems design, leadership and management styles?” The answer is – Yes! All these will be strongly impacted by this altered approach, and I propose to discuss these and much more in the coming weeks. Tighten your seat belts because the journey will be a bumpy one.

Prashun K Dutta

Prashun has around 35 years of varied corporate experience, former CIO at Reliance Infrastructure and Tata Power, an Electrical Engineer and a fellow a Fellow in Management of the IIM(C). He is well known for his contribution to the electric utility sector where the systems implemented by him at RInfra and Tata Power have been adopted throughout the country. He is now a freelancing consultant to corporates.




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