Coping with deep uncertainty about the future
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I've been fielding lots of questions this week from clients, journalists, researchers and friends working in various parts of the federal government. Everyone is feeling anxious. We're suddenly dealing with unprecedented, wide-sweeping changes. To the surprise of political analysts, Bernie Sanders lost the Michigan primary last night and it's looking now like Joe Biden is (some would say improbably) the de facto Democratic nominee. Oil prices are plunging because of an overnight price war between Saudi Arabia and Russia. The Dow is on a wild ride, dropping thousands of points and bouncing back up. Major events are postponed or cancelled: Tokyo's famed Cherry Blossom Festival, the South by Southwest (SXSW) festival in Austin, the Tucson Festival of Books, Coachella, maybe even the Olympics. Professional athletes are playing games in empty stadiums. At the beginning of last week, communities were on Coronavirus lockdown. This week, entire cities and countries on lockdown. Supply chains are disrupted. Schools are out. Nothing seems to be going as we expected.
Companies, like people, have limbic systems. Corporate anxiety can spread fast and cause leaders and teams to make poor decisions. Without concrete answers to questions about the future, corporate anxiety grows. It's a vicious, terrible cycle. I'm writing to tell you a simple truth: you cannot make accurate predictions describing exactly what your industry will look like in 3, 6, or 12 months. I know you're under pressure to do that right now. Your organizations want new financial projections and accurate timetables. Your senior executives and boards want concrete answers. Your goal right now isn't predictions. It's preparation for what comes next. We must shift our mindset from making predictions to being prepared.
Futurists use a simple tool in times of deep uncertainty. It's called the Axes of Uncertainty, and it's easy to understand and apply. Instead of our usual tech trends newsletter, today I'm going to walk you through how to use the tool in your organization, and even to help you grapple with disruption in your personal life. Some of what you surface in this activity will highlight opportunities you didn't see before, and you will likely also see existential risk you'd never imagined. The more plausible outcomes you can discover, and the more flexible you can be in your thinking and planning, the more assured you will feel about your futures. That's how you break the vicious cycle of corporate anxiety. And there's an added benefit: if you identify existential risk early, you have time to take action.
I'll leave you with a final thought. If you've ever driven on a slippery road and started to lose control of your car, your instinct is to slam down on the breaks. That's your limbic system dealing with uncertainty and clouding what should at that very moment be rational thought. Your rational mind would tell you to remain calm and avoid overreacting. Allow the car to pass over the ice by keeping the steering wheel straight or even steering gently into it if you're not going to hit anything. You're not being passive or giving up! You're slowing down to see plausible outcomes so that you can take incremental actions.
We've hit a big, awful icy patch. Don't slam on the breaks. Use the Axes to lean in to uncertainty.
Amy Webb
Founder and CEO
Future Today Institute
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The Axes of Uncertainty
Step-by-Step Guide
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We tend to under-predict or over-predict change. The reason: imagining plausible outcomes forces us to confront our expectations and cherished beliefs. If you were to jot down descriptions of the future, you'd quickly find that they mirrored your own cognitive biases. You'd focus mainly on the subjects you already know well -- like your work, your company and industry -- so you'd miss all of the related risk and opportunity ahead.
The Axes of Uncertainty is a tool we use to describe multiple, alternative futures. Which is good! Because right now, we cannot know the definitive outcome of Covid-19, the presidential elections, and market swings -- not to mention all of the other uncertainties we're grappling with. The Axes result in scenarios: short but detailed narratives describing plausible outcomes and impacts.
Overview: A completed Axis results in a 2 x 2 matrix and four headlines describing plausible futures, given what we can observe from the past and present. The headlines will reveal risk and opportunity, help you prioritize your work and show you were to take incremental actions.
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Step 1: Brainstorm External Uncertainties
External uncertainties are disruptive changes over which you have no direct control. We use four broad categories of external uncertainties including economic factors (macroeconomic trends and forces shaping our economies, the distribution of wealth); social factors (changes to public health and education, demographic and population shifts, environmental changes); politics and activism (regulation, executive orders, trade agreements, elections, use of social media); and technological and scientific progress.
Generate a list of uncertainties using these categories to start. You can add in additional external uncertainties you're curious about or that are specific to your field. Write each uncertainty using opposite states as you see below.
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As you think of uncertainties, try to categorize them using a template like this.
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Best Practice: Aim to generate as many as you can across all of these four External Uncertainty areas. I'd recommend doing this in a small, cross-functional group in your organization or with a group of friends who share different interests and expertise.
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Step 2: Brainstorm Internal (or Known) Uncertainties
Internal (or Known) Uncertainties are disruptive changes over which you have some direct control. In a company, this could be things like: workforce development, making new hires, budget allocations, decisions executive leadership will make, marketing efforts, R&D efforts, investments and the like. If you're using this tool for personal reasons, list some things over which you have control and you're curious about. Examples: traveling for pleasure/ work, attending a conference, pursuing a course of study.
Again, generate a list of uncertainties using opposite states as you see above and did in Step 1.
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Step 3: Select Two Uncertainties And Put Them On Opposing Axes
Pick two of your uncertainties from different categories (example: Economic and Social, or Economic and Internal) and put them on opposing axes, like this:
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Best Practice: Since your goal is to surface plausible outcomes you've never thought about before, try to connect two uncertainties that normally wouldn't go together.
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Step 4: Write A Headline For Each Quadrant
Headlines should describe what a future state would look like if each of the uncertainties were to happen. Headlines should be descriptive. Aim to write a main headline and 2-3 sentences with more detailed information. If you're stumped, move on to a quadrant that's easier for you to imagine. You should eventually complete all four quadrants. Here's an example:
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You can use both your External and Internal Uncertainties. Here's how to decide which ones to use, depending on your goals:
- External - External: For broad thinking about future states, to see external disruptors early
- External - Internal: To connect external disruption to specific uncertainties in your organization/ personal life
- Internal - Internal: To see tactical and strategic options that can be pursued
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Best Practice: We aren't trying to figure out every single future state. (You'd need a hell of a lot more data, a continual data stream, and an evolutionary algorithm for that.) If our goal is to be better prepared for plausible outcomes, then we just need to surface as many headlines as we can. There isn't a set number. When I do this exercise, I just keep going until I've run out of energy. I might have a dozen headlines, or a hundred.
Sometimes you might select two uncertainties that are challenging. It's totally fine to scrap what you have and start over.
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Step 5: Label Each Quadrant
This step is an important one. Label each quadrant to help you triangulate and prioritize the actions you will take. Here are your labels:
- Near-term Opportunity
- Long-term Opportunity
- Near-term Risk
- Long-term Risk
- Existential Risk
Remember, we're not just trying to imagine outcomes. This isn't a passive activity. We're looking for risk early so we can mitigate it -- and better, turn that risk into opportunity. Here's how I would label our headlines:
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Final Step: Find Your Action
Now that you've identified plausible future states, you must take some kind of action. It can be simple and easy: if you've revealed a potential opportunity, do some more research and explore the idea in more depth. If you've revealed a possible threat, talk to your colleagues and continue to build out your scenario, allowing yourselves to take it to extremes. Getting in the habit of taking incremental actions and making small bets is a good way to deal with a future that's in flux.
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Using The Axes For Your Strategic Planning Process
You can continue to use the Axes of Uncertainty within your organization ahead of a more detailed strategy planning session or to supplement your longer-term vision process. The Axes are a core tool used by futurists. In our practice at the Future Today Institute, the Axes are the first step. We use a system to prioritize and combine the headlines, and then we write first-generation scenarios (these are more detailed versions of the headlines). From there, we write second-generation optimistic, neutral, pessimistic and catastrophic plausible scenarios. Finally, we use that work to develop a final, preferred scenario, and that becomes the basis for a company's near or longer-term strategy.
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SXSW Cancelled - Update on our 2020 Tech Trend Report Launch
For those of you who attend SXSW, you know that the launch of our annual Tech Trends Report happens on the main stage, and I stick around to answer ~every~ question folks have, no matter how small or arcane. The report will still go live on Sunday, March 15th, when I was scheduled to speak. You will receive an email about how to download it for free, and we will post updates at http://www.futuretodayinstitute.com/trends. In order to help out the SXSW community, I've partnered with Subtext this year to answer your questions, share the research, and dive into scenarios. You can text message me your questions and I will message you back directly. Texting will start Sunday morning(ish).This is a completely free service, and I'll keep it active for a few weeks. You can sign up at the link. Depending on how many texts I get it might take a bit to get back to you, but I will answer all your messages.
I want to help out the SXSW community, which I feel very strongly a part of and am so grateful for. For those of you who were in my Featured Speaker connect session, if you DM me on Twitter I'll set up a virtual meeting for us all to still have the session. Instead of the usual big, brown table, we'll sit around a big, virtual, table!
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