Leaders Reduce Uncertainty

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No matter the discussion. No matter the company. No matter the culture. I always come back to the same point, so I am going to share it with the larger LinkedIn audience. Leaders reduce uncertainty. Or, as I like to write/say: “leaders are those individuals who can show the rest of their community a less uncertain world, inspiring them to work together to make it a reality.” Effective leaders are those who deliver on the paradigm. Excellent leaders are those who deliver over and over again.

When working with my clients, I often use the example of food because it is a basic need we can all understand. Since some of my readers are also clients, please forgive the repetitiveness of my example.

At the start of time, man has been challenged by the need to feed himself. (In many places, this is still a challenge. Without wanting be politically incorrect, I hope not hurt anyone’s sensibilities with this Western male position.) Man started as a gatherer, picking at bushes and plants. With the arrival of tools, man added hunting to the gathering. Next, in the evolutionary scale, came agriculture. By learning how to domesticate animals and cultivate crops, a sedentary life was established. As production methods improved yields, the uncertainty of feeding oneself was reduced and man could dedicate himself to other pursuits. Villages and towns grew out of the opportunities created from specialized labor. This process was, subsequently, accelerated through industrialization. The food we once had to grow individually, which was then brought to market by cart, we now buy in a supermarket. However, and most importantly, the supermarket exists because the uncertainty for the customer to find food has been reduced to almost zero. After all, how often do you go to the supermarket and not find what you want? Not often, I imagine. And if you do, chances are the next day you will find it.

In order for the supermarket to provide its customers with such a low level of uncertainty, the whole supply chain must be certain. From the food producer to the transporter, to the warehouse, the refrigeration system, the fuel, …. every thing must work with a 99.9% rate of reliability to get the food to your table and into your mouth so you survive. Consequently, each economic actor along the way must be able to supply those 99.9%. So the leaders of those organizations are in the business of reducing the uncertainty for their portion of the supply chain or they risk going out of business.

However, in the last 30 years, or so, a new uncertainty has creeped into this process. Although not shared by all, some are uncertain about the quality of the foods. This new uncertainty paved the way for new economic actors to enter the market providing organic products, free range chickens, and such.

In some cases, this was not enough. Some other segments of the population were equally uncertain about the supply chain itself and demanded locally sourced food. This allowed for local food producers to develop their businesses responding to this uncertainty.

There are any number of other economic actors operating in your market satisfying other uncertainties. Some consumers are uncertain about their own abilities to prepare food so they want already prepared dishes: frozen foods, catering, restaurants, street food, and such all respond to one degree or another to this uncertainty. Likewise, some people are more concerned about the uncertainty food preparation puts on their time so they want something fast. Here again, we find the same solutions suggested above but we have to add self-service, deliveries/take-a-away, fast foods, drive through windows, and the like. In other cases, the uncertainty perceived by the market takes the form of an equitable distribution of the profits; this led to equitable commerce. I’m sure there are many, many, other uncertainties I have not touched on but I think I made my point.

Businesses exist because they reduce some uncertainty perceived by some segment of consumers. And, leaders work with their communities to organize resources in such a way as to respond to those uncertainties.

To date, there is no business, organization, or even political leader…who – in my opinion – cannot be best understood as an uncertainty reducer. So the next time you think of a new business, look at your existing one, work with your colleagues, decide on a course of study,…what have you, see if you can identify what uncertainty is being reduced. I’m certain you will see it.


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