Strategic planning means knowing how to deal with uncertainty

It’s crucial to know when your need more data and when you need more action.

Geoff Wilson

When it comes to business strategy, it can be tough to know precisely where you are and where you are going, so be sure to cycle between the two constantly. Here’s another post that speaks to the value of fast cycles to your strategic plan.

Renowned physicist Werner Heisenberg’s uncertainty principle states (roughly, folks) that the more you measure one property of a particle (its velocity, for instance), the less precise you will be when it comes to measuring another property (its position, for example). Extended to the world of business strategy, this principle lends some fascinating insights.

Let me list five:

  1. The basic knowledge that there is a tradeoff to measuring multiple things at once in a complex system. You have to measure, but you also must know the limits of your ability to measure.
  2. The more you try to measure one thing, the less precise you fundamentally become on the others, all else equal. This is true of companies that spend too much time on employee engagement and drop the ball on operations. And it’s true of the operator who focuses too much on throughput and not enough on quality.
  3. The more you focus on where you are, the less you can know about how fast you’re going. Information you gather that tells you where you are is already old by the time you absorb it. Think about analysis paralysis. It’s real.
  4. The reciprocal is true as well: The more you focus on action, the less you can know about current position. The fog of war is real, too.
  5. This last one is probably the kicker for me: The better you understand your current position, the more you should know you’re probably not focused enough on momentum and action. If you’re working the financials two places to the right of the decimal point, and you aren’t a hedge fund or a bond trader, your inaction is probably showing.

And here’s a bonus insight: Your organization is not subject to the laws of quantum mechanics, so know when you need more data and when you need more action. The best answer to this tends to be finding the right “loop lengths” for different processes in your strategic management approach. And cycling through them faster than the competition.

If these things are true, then let me ask you: Why do you allow yourself to try to measure so many things so precisely?

I’m interested in your thoughts on how to trade off measurement of position with measurement of action. What do you think? 

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