Uncertain Times Define Leaders

MORE THAN A CENTURY AGO, Karl von Clausewitz, the legendary developer of Prussian military strategy, coined a phrase to describe the extraordinary leadership challenges faced by commanding generals. He called it the “fog of war.” This phrase represented a set of complex factors, including pressure for quick decisions, inadequate or distorted information, stress, anxiety and fear, the crushing impact of loss of life, and the difficulty of communication with others. Von Clausewitz observed that these factors combined to cloud the thinking and decision making of leaders at critical times.

In contemporary business and technical leadership we call this “managing through uncertainty” or “leading through change”?though no phrase matches the power of the original. Yet whatever you call it, working successfully through the fog is a defining test for any leader.

There are many different situations that can make you a leader in the fog, such as the first few months at a new job in a financially threatened company or leading a strategic response to a new competitor. When you feel your mind go fuzzy, your alternatives narrow, your creative juices dry up and your tension rise, you know you’re in the fog.

The thickest fog I’ve ever confronted is in building a new company from the ground up. Even after starting with a relatively clear concept and months or years of planning, the fog settles in the moment you actually begin. In the first three to six months, the product/service focus, business model and market analysis might change four or five times.

Whenever I have to lead through high degrees of ambiguity and uncertainty, I use an approach long tested by the Marines and fighter pilots to guide their decision making in complex, life or death, disorienting situations. It is called the OODA (pronounced “oooda”) loop: observe and orient, decide and act. I’ve used it below to organize the lessons and techniques I’ve found useful.

Observe and Orient

Observing and orienting involve getting accurate information, multiple points of view and a frame of reference that allows you to navigate even in the midst of uncertainty. It also means developing a dynamic view of an entire situation so that you do not get stuck in static thinking or make the mistake of interpreting new situations solely in light of similar situations you’ve faced before. To effectively observe and orient, you need to:

Get the lay of the land. Understand the terrain, the players, the trends and where you are in relationship to everyone else. I read voraciously, get the scoop from intelligent colleagues and friends, and listen to both practitioners and pundits. Using that information, I try to form?and continuously update?a view of the situation that incorporates a longer-term strategic perspective as well as the immediate tactical reality.

Generate a frame of reference. Have your own mental construct that defines boundaries and points of navigation even when there appear to be none. Early on in a new business, our team developed a picture of the industry and a plan for how our business would likely evolve during the next six, 18 and 36 months. With regular updates, this served as a stable high-level frame of reference we could use to interpret all the changes taking place around us.

Conduct reconnaissance. Get as much meaningful information as possible, then double- and triple-check it for reliability. My CIO and I play a game every day scanning the Web for potential competitors: The person who can frighten the other one most wins. Every month or so, we find a company that makes our collective stomach sink. Then we systematically research it and process how its approach compares to ours. This always involves sending someone on a reconnaissance mission, no matter where the company is located.

Communicate, communicate, communicate. Keep a constant flow of communication from multiple sources and expect to be surprised and respond to last-minute changes. I encourage our board members to send us e-mails about potential partners. Employees saturate me with ideas about new approaches. My partners and I conduct daily, weekly, monthly and quarterly reviews to ensure we’re talking about all the right things all the time.

Decide and Act

Deciding and acting moves from absorbing, filtering and processing information to calculating and executing both bold and incremental actions to achieve an objective. Of course, the problem with the fog of complex problem-solving environments is that objectives may frequently change. To effectively decide and act, you need to:

Determine your goals and objectives. Nothing accentuates the tension and anxiety of working in the fog like a lack of objectives. In running our new business, we rapidly evolved a set of objectives over several months and ended up with six strategic goals that drive all our goal setting, performance measurement, risk assessment, and organizational roles and responsibilities.

Have a plan and be willing to change it. Know where your opportunities and risks are likely to be. Then have victory and escape routes planned. My businesses all had plans from the beginning, but the process of changing and adjusting our thinking was as important as the plan itself. We talk weekly about how it needs to be adjusted given tactical conditions, resource availability, developing opportunities and emerging risks.

Develop multiple scenarios and contingencies. Make deliberate decisions. I spend time constructing worst- and best-case scenarios, but the ones I work on the hardest are “minimum required” and “maximum possible.” Minimum required means the least number of things that need to be done in order to get to our next line-of-sight result. Maximum possible adds in the known opportunities that could turn into windfalls if everything goes right. I try to zero out the risk of worst case, capture most of minimum required very early and then work systematically to increase the probabilities of getting to maximum possible or best.

Act and react. Make bold, deliberate moves. Ulysses S. Grant attributed his maturity as a leader to finally realizing, just before one hair-raising battle, that the other guy was just as uncertain and afraid as he was. Always remember, you’re not the only one in the fog. So work your own plans, look for the other guy and make the bold moves that will require others to respond to you and not vice versa.

When you find yourself in a leadership situation and the fog is settling in, remember the OODA loop. Systematically work through its cycles as best you can. You may find the fog more comfortable to work in and even clearing up faster than you expect.