What is going on here?

Over recent weeks I have found myself increasingly referencing the starting point of a book called Radical Uncertainty: Decision-making for an unknowable future. Written by (now Lord) Mervyn King (ex-Governor of the Bank of England) and John Kay (British economist and Fellow at St John’s College, Oxford), the book questions the idea of rationality in a radically uncertain world.

The book begins with a stark quote from Leo Tolstoy’s War and Peace:

All we can know is that we know nothing. And that is the sum total of human wisdom.

By way of introduction the authors recount a selection of episodes from history, including Napoleon’s march on Moscow, and the 2008 global financial crisis. But it is a story relating to Obama which is the one I have found myself recounting to many clients. The authors set the scene: late Spring 2011, President Obama is holed up with his senior security advisers in the White House situation room to consider what he knew would be a defining decision in his presidency. Many of you will have seen the visual image of this. Should he approve the proposed raid by the US Navy SEALs on the Abbottabad compound in Pakistan where Osama Bin Laden was believed to be hiding? Some of his advisers were bullish - with the CIA team leader saying that it was 95% certain that bin Laden was in the compound. Others were less sure, with most placing their probability around the 80% mark, and some as low as 40% or even 30%.

As King and Kay wrote, the President summed up the discussion. ‘This is a 50-50. Looks guys, this is a flip of the coin. I can’t base this decision on the notion that we have any greater certainty than that.’ Obama did not mean that the probability that it was bin Laden in the compound was 0.5. He didn’t mean that he planned to decide by tossing a coin. He was recognising that he had to make his decision without knowing whether bin Laden was in the compound or not. And in fact Obama later made the point that in that situation instead of getting useful information about the situation he was just being fed probabilities that disguised uncertainty.

Obama understood that he had to arrive at a decision on the basis of limited information, and rather than doing so by using probabilistic reasoning, he asked ‘What is going on here?’

The two authors of Radical Uncertainty share in their introduction that they found inspiration in an anecdote from Richard Rumelt’s book Good Strategy/Bad Strategy. Rumelt describes a conversation with a colleague at UCLA who had observed some of his case-based MBA classes:

We were chatting about pedagogy…John gave me a side-long look and said ‘it looks to me as if there is really only one question you’re asking in each case.’ That question is ‘what’s going on here?’ John’s comment was something I’ve never heard said explicitly but it was instantly and obviously correct. A great deal of strategy work is trying to figure out what is going on. Not just deciding what to do, but the more fundamental problem of comprehending the situation.’

Alongside making the general point that ‘we do not make good decisions by professing knowledge we do not and cannot have’, the authors of Radical Uncertainty highlight the importance of narratives, and the weight we put on them, in making our decisions. So in Obama’s case, they assert that his ultimate decision was not based on probabilities, but on weighing up the credibility and coherence of competing narratives. Making a considered choice of action by spending time listening to and communicating with experienced and knowledgeable advisers.

As they conclude in their book, good decision-makers listen respectfully and range widely to seek relevant advice and facts before they form a preliminary view. And when they arrive at a view, they invite challenge to it, before drawing the discussion to a conclusion.

And whether we’re talking about a Board discussion, an SLT discussion, or a decision within any team, I can’t think of a better formula than that.

For more on this or any aspect of leadership, with a healthy dose of mindset, sport, and I hope usefulness thrown in, do feel free to browse through all the articles in the Huddle, or get in touch with me directly on catherine@sportandbeyond.co.uk. Radical Uncertainty is a great read - you can purchase copies via Amazon https://www.amazon.co.uk/Radical-Uncertainty-Mervyn-King/dp/1408712601