How to Deal With Ambiguity in Business Life?

Most junior managers face a business environment fraught with ambiguity. Sometimes, even seasoned managers can get overwhelmed by ambiguity. This video shares four types of business ambiguities and lessons to deal with such situations.

For those who would rather read than watch, the transcript it as follows:

Transcript

Hi, I am Ankush Chopra. Business wold is fraught with ambiguity. Not only do junior managers face this challenge even seasoned managers sometimes get overwhelmed by ambiguity.

Let’s learn how to deal with ambiguity in business and life.

First Day at a Job

I distinctly recall the first day of my first job after completing my business education. I met with my manager who was the Vice President of business development and a veteran of the oil and gas industry. A great guy!

He quickly came to the first project I had to work on. He said  “Ankush, 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, jet fuel,  gasoline back to back, your model should include the ability to move from product to product”.

He continued explaining how production output shifts as the storage need change. He also explained how the ships pay demurrage if they are kept waiting.

Effects of Ambiguity

I was looking engaged form outside but inside I was panicking. 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.

As I exited that room, I had this deep sense of being in the wrong place as I understood very little. There was no google back then to find out what is HSD or SK. Even if it was there, it wouldn’t have helped me. Why – because I was in an extremely ambiguous situation.

The fact is that there are many different types of ambiguities we face in business life.

Four Types of Ambiguity

First is the Goal ambiguity – when we don’t know the most important goal in the situation. This is true whether you are a private in the trenches or a general high up on the hill.

Second, Mental model ambiguity. This is what I faced in the example I shared with you. In the business world we work with a lot of concepts and touch things that we directly cannot see. As a result, mental models are critical for someone to see the world clearly. When you lack accurate models you face ambiguity.

Third, motive ambiguity. This happens when you don’t know the motive on a counter party.

And finally, outcome ambiguity. You down know what is possible and sometimes the outcome is unknowable.

Four Ways to Deal with Ambiguity

So how do you deal with ambiguity?

You can do that in four ways.

1. Learn the art of stepping back. This helps you get perspective.

2. Develop an 80-20 mindset. When you learn this principle you take a major step in dealing with ambiguity because you will realize that there are very few important drivers in a situation.

3. Learn strategic thinking. I have been teaching this skill to mangers for over ten years and you can fid out more on my website ankushchopra.com about his skill.

4. Learn the art of scenario planning. This is a tool in the arsenal of a strategist but it is valuable for any manager dealing with ambiguity

Key Takeaway

Ambiguity is a part of business life and the better you become at dealing with it, later the roles you can handle. And this is a skill that will become increasingly more valuable over time.