Overcoming Ambiguity: Three Steps That Every Business Can Take.

Confused what to think about
China? So are a lot of world
and business leaders.
Consider Chinese President Hu
Jintao ’s recent state visit to
Washington. In a speech
before American business
executives, President Hu said
China was a military threat to
no nation. But his words came
just one week after the
country’s military unveiled its
most potent, offensive
weapon, the new J-20 stealth
fighter.
Talk about mixed signals.
To many in business and
politics, China represents a
beguiling dilemma: it ’s both a
land of opportunity and risk.
Consider the upside of
investing there: China has a
rapidly expanding middle class
with a increasing appetite for
Western goods, and a growing
business community that is
hungry for professional
services and sophisticated
technology. On the downside,
China has a mixed record
when it comes to protecting
intellectual property, and a
bureaucracy that is as difficult
to understand as it is to avoid.
Some business leaders simply
can ’t handle this kind of
gamble. To them, the
ambiguities add too much
stress or create too many
distractions. Yet others thrive
amid ambiguity. How? By
learning to manage in
environments where
uncertainty and confusion are
the norm. Your company may
never do business in China,
but chances are you face
similar dilemmas in the
markets in which you
compete. Are you wary of
some potential business
partners because they could
be competitors, too? Do
certain customers put you off
by their overwhelming
demands? These are but a few
of the quandaries that leaders
face today. Dealing with them
effectively, thus, is one of the
most important skills you can
develop.
So where to begin? Start by
thinking about the way you
form your decisions.
When entering a new market,
making an acquisition or
developing a new product
amid uncertainty, business
leaders typically ask
themselves, “What don’t we
know?” Because hard
questions demand hard
answers, business leaders
typically embark on a fact-
finding mission for nuts and
bolts information. They set out
to determine the size of an
opportunity, the strength of
their competition and more.
The information they gather
helps them cope with
ambiguity and often forms the
foundation of their strategic
thinking. But just as in
personal relationships, hard
facts aren ’t all that matter.
To make better informed
decisions, leaders must also
take into account softer
things, too. What are these?
They are the more difficult
understandings to come by
such as the biases that some
people hold or the
misconceptions that others
cling to. For example, leaders
tend to overweight the
opinions of those in their
organizations who are popular
or successful –sometimes at
great cost. They also tend to
discount threats from
unsuspecting places or
findings from little known
sources. When making a
decision where known
ambiguity exists, leaders must
carefully evaluate how they
form their opinions, including
the information they use, the
sources they trust and the
revelations they discount.
Doing so will help leaders
separate fact from fiction, and
increase the likelihood of their
success.
Next, leaders must develop
realistic expectations about
opportunities and challenges.
In environments where
uncertainty cannot be
eliminated, this is very
difficult but not impossible.
The key is understanding your
true differentiation and
weaknesses. Suppose your
company successfully
penetrates a new market for
the first time. At first blush,
you might be tempted to think
your product was priced
appropriately or marketed
effectively. You could also
conclude that its feature set
was superior to the
competition. But unless you
probe deeper, you won ’t fully
understand why. Before you
establish broader
expectations, find out what
really made you a success in
the first place. Was it a sales
partner with under-
appreciated capabilities? A
temporary regulatory or
financial incentive that doesn’t
exist elsewhere?
In market segments and
geographies where
uncertainty and confusion
prevail, leaders can forget to
probe the hidden reasons why
they are successful –and why
they are not. When they
forget, they tend to form
unrealistic expectations about
their true potential.
The final key to prevailing in
ambiguous circumstances is
staying on course despite
distractions or uncertainties.
This can be achieved by
developing tight alignment
between where you want to
go, how you plan on getting
there and the steps you will
take along the way. In many
organizations, there are
significant gaps between
management’s vision and
employees’ ability to execute.
These are only exacerbated in
environments where a partner
one day can become a
competitor the next, or where
a new law can disrupt months
of work in an instant. To
ensure that these and other
developments do not
negatively impact you, make
sure there are no gaps
between your plans, people
and processes.
Following these three steps
won ’t guarantee you will
prevail in ambiguous
circumstances. But it can help
you avoid the missteps that
trip up many others –in China,
and just about anywhere else
you dream of going.
Inder Sidhu is the Senior Vice
President of Strategy &
Planning for Worldwide
Operations at Cisco, and the
author of Doing Both: How
Cisco Captures Today’s Profits
and Drives Tomorrow’s
Growth. Author proceeds from
sales of Doing Both go to
charity. Follow Inder on
Twitter at @indersidhu.

Source: Http://blogs.forbes.com/indersidhu/2011/01/24/133/?boxes=Homepagechannels