Mastering Uncertainty

Why being certain is probably a bad sign and how embracing uncertainty can be far better for you.

The other day I was watching “Fracture”, an Anthony Hopkins and Ryan Gosling thriller from 2007. At one point Ryan has to get a piece of evidence over to someone and runs out the door carrying it with him. At this point my wife turned to me and said: “Why didn’t he just take a picture on his phone and send it?”

When Fracture was filmed the iPhone hadn’t yet been launched and if the flip phone Ryan was using was capable of taking a picture it probably wouldn’t have been a very good one, or even probably capable of attaching it to an email and sending it to a judge.

It’s funny to think how much the world has changed in the time since 2007 but as far as technology goes it was pretty unrecognisable and the iPhone is a big part of that.

Who would’ve known back then how much the world would change? Turns out, pretty much no-one. Not even Steve Jobs.

The iPhone

Here’s Steve Ballmer, CEO of Microsoft, reacting to the announcement of the iPhone:

Remember the Palm Pilot? Here’s Palm’s CEO, Ed Colligan, on the iPhone announcement:

“We’ve learned and struggled for a few years here figuring out how to make a decent phone, PC guys are not going to just figure this out. They’re not going to just walk in.”

It's easy in hindsight to laugh at these quotes knowing now what happened. But at the time they were "sensible" views that lots of people agreed with.

So you might be thinking: So what Microsoft thought they were right, Apple thought they were right, big deal. But Apple were far from certain about their product.

Here’s Steve Jobs announcing the iPhone:

iPhone Target

See that he’s targeting 1% market share in 2008. In that year they actually achieved 8%. Today their share is around 30% and with 90%+ of the market’s profit. Not even the legendary wunderkind Steve Jobs knew how wildly successful the iPhone would be. After all Apple has had its fair share of flops, contrary to popular business myth, anyone remember the Newton or the Lisa?

Apple was uncertain about what was going to happen. Microsoft and Palm were certain about what they thought would happen.

A Kodak Moment

At one point Kodak was king of the camera market. A “Kodak Moment” was a clever marketing campaign that associated Kodak with those special moments in life that people wanted to remember. But after their “demise” (I know they’re still around in some form) it came to mean something more like the business equivalent of snatching defeat from the jaws of victory.

If you ask anyone: “What happened to Kodak?” they’ll probably say digital cameras came along and people stopped buying film. Which is pretty accurate. What most people don’t know though is that Kodak invented the digital camera! Plot twist!

Kodak failed to pursue digital camera technology though for fear of what it would do to their film business. Ultimately, instead of destroying their own film business, they sat back and let other companies do it for them. Kodak failed to embrace their uncertainty.

If the World Were Flat...

Cats of Flat Earth

Back in the bad old days people like Galileo and Copernicus were persecuted for claiming the Earth was round. If you’re certain the world is flat then you don’t sail off the edge.

Certainty is the Enemy of Growth

Certainty is by default limiting. Certainty requires no change in behaviour because you’ve already chosen the best course of action. And if the situation isn’t going to change then your plan doesn’t need to change. But, as the saying goes:

“If you always do what you’ve always done, you’ll always get what you’ve always got.”

If you’re certain the world is flat and there is nothing left to discover then you don’t need to go sailing around trying to discover things. New results require new behaviour.

Where Does Certainty Come From?

As humans we have a habit of only believing things that already agree with our world view and disregarding those that don’t. Take this famous optical illusion for instance, do you see a duck or a rabbit?

Duck or Rabbit

Can you see how your mind “slips” into either view? Think it’s a duck all you see is a duck. Think it’s a rabbit all you can see is a rabbit.

This is a nice illusion but problems arise when we think we have the “right” interpretation and others have the “wrong” interpretation. We’ve already explored how this has it’s effects in business in the phone and camera markets. But it pervades all of human existence and certainly your business.

Ducks vs Rabbits

You Gotta Know When to Hold ‘Em, Know When to Fold ‘Em

Top poker players are the perfect example of dealing with uncertainty. Every poker hand has pre-calculated odds about it’s likelihood of success. All the poker player needs to do is play according to the odds. The player is uncertain about the outcome, just because she has a hand with good odds her opponent might have a hand with better odds. But the poker player embraces uncertainty and plays the way the odds say. Sometimes you win sometimes you lose. But playing the right odds means you win more than lose.

Kodak got dealt the perfect hand but was too afraid to play it. Microsoft, Palm, Nokia and all those other phone companies had a weak hand but insisted on still playing it. They didn't sit back and calculate the odds.

As a business person, or just as a person, you need to look at situations like you look at the Duck-Rabbit illusion. Ask yourself; is it a duck? Is it a rabbit? Is it both? Is it just an illusion, a load of scribbles on a piece of paper that look like a duck or a rabbit? Maybe I should be looking at a different illusion?

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