How to Deal With Ambiguity?

Managing ambiguity is perhaps one of the most critical parts of business life. Both budding managers as well as veteran mangers often get overwhelmed in the face of ambiguity. If you have ever struggled with this issue, then you need to know how to deal with ambiguity.

An Ambiguous Assignment

I distinctly recall the first day of my first job after completing my business education. When I walked into my manager’s office, I was blissfully unaware of what lay ahead of me. My manager was the Vice President of business development and a veteran of the oil and gas industry. He was not only a great guy but also an excellent manager.

After a few pleasantries, he explained the first project to me. “We need to figure out how many jetties we need for the refinery. You will need to build a simulation model for it. Since we use trucks, railroad, pipeline, and ships for transporting the products, you will need to make sure the model includes all aspect of logistics too. And since we pump HD, SK, and gasoline back to back, your model should include the ability to move from product to product”. He continued explaining how production shifts as the storage need changes. He also explained how the ships pay demurrage if they are kept waiting.

I probably had a glazed look in my eyes, and my mind was grasping for some understanding, any knowledge. My mind was racing at fast speed in trying to understand him. I had dozens of questions in my mind as he kept explaining the project.  What is HSD? Doesn’t kerosine and gasoline mix if you pump them back to back? What does a jetty look like? Wow! You can increase temperature and change the output of a refinery. We were at two entirely different levels in that conversation. I cannot remember saying much but feeling panic within me.

When Ambiguity Causes Mental Paralysis

Although he was probably the best direct manager I ever reported to, that conversation left me feeling inadequate. I walked out wondering how will I ever make that project a success when I didn’t understand even half the terms he used. Back then, there was no Internet to quickly Google the various words I had furiously noted on my notepad.  I was sure he had put me in the wrong role. But surprisingly, three months later I had built a model far more complicated than what he had anticipated. I had designed, coded, and delivered a complex refinery and logistics simulation model built on nothing but BASIC code! To do that I had to manage ambiguity. But the ambiguity I had to manage back then was just a small part of the world of uncertainty that managers have to face.

Eliminating Ambiguity

The ambiguity that I faced is something that a lot of people face when they enter a new role. It arises because of two missing pieces in one’s knowledge base. First is the basic knowledge of the domain. The second is the absence of mental models. In the conversation I mentioned above, I needed to have known the meaning of all the terms used in Oil and gas industry and the knowledge of basics of refining. But more than that I also needed to have the mental model that helped me see the cause and effect in the refining business.

Filling this knowledge gap is often the clearest path to managing this kind of ambiguity in most situations in business. It requires an understanding of your learning style and the confidence to say ‘I don’t know.’ Being unaware of your learning style and trying to hide your ignorance can act as fuel for the fire that will only make the fog denser.

The Four Sources of Ambiguity

But the above examples illustrates only one of the four different types of ambiguous situations you will face. These four types of ambiguous situations arise from four different sources:

1. Goal ambiguity

This is one of the most difficult sources of ambiguity. It is a fact that in any business situation, there are multiple targets and agendas. There are functional goals and political goals. Different people prioritize top line and bottom line targets. There are goals stemming from the institutional imperative and personal predilections. When you are in the trenches, goal ambiguity can be the single biggest cause of lack of clarity in the situation. Stepping out of the trenches is one way to handle this situation, but it is easier said than done. To manage goal ambiguity, you need to build strategic thinking skills. I explained this art in great detail in my podcast episodes recently.

2. Mental Model Ambiguity

This is what I faced in the situation I shared earlier. I lacked the mental models and the necessary absorptive capacity about the refining business. That circumstance needed a mix of two skills. First, a deep understand of simulation modeling and software coding. Second, a good working knowledge of oil refining business. I only possessed the first but lacked the second. That was the cause of ambiguity for me.

Although I felt inadequate and uncertain whether I was in the right place, my manager was right in putting me there. It takes much less time to get a working knowledge of an industry and a business but a lot more to learn simulation modeling and coding. It only took me a few days to get the needed mental models by talking to people. As I build the right models and learned the terminology of refining, I built more absorptive capacity. In short, although it takes knowledge to eliminate ambiguity in such situations, it is important to know what kind of information is the missing piece. When faced with a missing structured domain of knowledge, the ambiguity takes longer to overcome. In such situations, partnering with an expert in the structured domain is much better than trying to resolve that ambiguity.

3. Motive Ambiguity

The third type of uncertainty arises because you don’t know the motivations of a counter party or of different actors in a situation. Since motives and goals provide a superstructure in a case, they also help you use the right mental models of the world. A lack of clarity in motives can lead to significant dissonance. When faced with goal ambiguity and mental model ambiguity, motive ambiguity can become overwhelming for anyone.

4. Outcome Ambiguity

This is the situation when the range of outcomes in a situation are hidden from one’s view. In such situations, one can feel overwhelmed because the future seems not only uncertain but unknowable. Such circumstances are often associated with fear. Once fear enters an ambiguous situation, rationality goes out the window. It only makes things worse!

But all the four sources of ambiguity arise from one’s inability to step back and look at the bigger picture. In such a stressful situation, ambiguity can become overwhelming. But it doesn’t have to be. Here are a few tips for dealing with ambiguous situations.

How to Deal With Ambiguity?

Although there are many ways of dealing with ambiguity, here are a few important steps you can take to address such situations:

1. Learn the Art of Stepping Back

Just stepping back and asking yourself which of the four causes of ambiguity is most prevalent in a situation will help you. It can help you set the path needed to gain the needed clarity.

2. Develop an 80-20 attitude

The Pareto principle is your friend when dealing with ambiguity. In any situation, 20% of causes drive 80% of the outcomes. If you deeply understand this principle and become comfortable with it, your ability to deal with ambiguity will increase manifold. Need for 100% precision is your enemy in such situation. In my view, this is a skill anyone can learn.

3. Learn Strategic thinking

This is a way of thinking that can help you ignore most of the clutter in the world and focus on the critical few things. Strategic thinking is again a skill that can be learned. I have been teaching strategy thinking fro over ten years and regularly see people become good at it in a short time.

4. Conduct Scenario planing

Very often people get stuck with a single outcome in a  situation. The fact is that in any given situation there are many possible outcomes. Even if you know nothing about a situation, just stepping back and seeing the various possible outcomes can help you lessen the outcome ambiguity. It often clarifies the good, bad and ugly results and helps you prepare for them. Scenario planning can often lower the overwhelming feeling emerging from outcome ambiguity. It will also prevent you from worrying about catastrophic outcomes in ambiguous situations.

Key Take Aways

Ambiguity is a part of business life becuase the world keeps changing around us. It leads to lack of clarity on many dimensions. Increase stress, narrow view and letting ambiguity overwhelm you prevents you from managing uncertainty. Taking a step back, managing stress, and identifying the cause of uncertainty can bring you closer to the clarity you seek. The best part is, that as you learn the art of managing ambiguity, you can handle increasingly more ambiguous situations. It is a critical skill that will only become more in demand over time.