Making Decisions in Uncertain and Ambiguous Circumstances


In an article about The Importance of Distinguishing Faith from Reason and Evidence, I pointed out that faith is a strategy for dealing with uncertainty and unknowability. Ideally, we would like to turn uncertainty into certainty and unknowability into knowablility and ultimately knowledge. We would like to base all of our beliefs on evidence. Cultures these days increasingly value rational beliefs, which are seen as being founded on verifiable facts, and undervalue faith. Faith, therefore, is a last resort that we call upon only when we fail to establish our beliefs on the basis of evidence and reason. Our inability to fully or satisfactorily establish that a proposition is a fact, i.e. having relevant evidence to confirm its veracity, combined with our willingness to believe that it is true lead us to treat it as a matter of faith.

Faith may seem to belong to the realm of religion only. This is not the case. We use faith in just about every aspect of our lives, and all the time. There are many more things that we do not know, cannot know, and/or are uncertain of than those that are known to us and/or we are certain about. Faith is a fundamental component of the working of the human brain. From the moment we wake up in the morning, faith takes over. Our very first thoughts make assumptions about the world of the new day that we are yet to confirm, yet we plan and proceed as if they were established facts.

In the 18th century, the Scottish philosopher David Hume argued that our certainty even about recurrent natural phenomena, such as the daily rising and setting of the sun, are not based on reason but instinctive thinking. He argued that the assumption that nature is uniform and will continue to behave in the same way, that is using knowledge of the past to predict the future, is incapable of proof. The fact that the sun rose daily for millions of year still does not rationally justify the assumption that it will do tomorrow. This may sound counterintuitive, but when examined closely, it turns out to be logical. The point is not that the sun will not continue to rise everyday, but that we cannot establish this as a proven conclusion upfront. We “assume” not “know” that it will rise tomorrow as it did in the past.

There is just so much faith and assumptions in the way we think and behave than we may comfortably want to concede. This has two important implications. First, epistemologically, knowledge is tampered with faith. They are actually inseparable. Imagining knowledge as being an objective, evidence-based set of facts as opposed to faith, which consists of unproven or unprovable assumptions, is, well… mere imagining. Second, practically, this recognition should better equip us to confront and deal with uncertainties and ambiguities. Because we think most of our thinking and behaviour is rooted in reason, indisputable facts, and evidence, we often treat certain kinds of situations that we classify as uncertainties or ambiguities as exceptions, and accordingly feel apprehensive about how to deal with them until they become clearer. Many people feel paralysed when facing such situations. This can be seen in the person’s personal life and professional life.

In business, the ability to accept and deal with uncertainties is one major quality that characterizes entrepreneurs. These individuals invest in a future that is largely unknown, uncertain, and ambiguous on the basis of intuition that is based only partly on evidence and reason and partly on faith and assumption. This is not easy, and the bet might turn out to be completely misplaced. This is why there are more failed entrepreneurs than successful ones.

But the increasing complexity of business today means that the ability to confront and deal with the unknown, the uncertain, and the ambiguous is a requirement for any position of leadership. You cannot sit and wait for the all needed facts to reveal themselves to you before you make decisions. The decision time would have expired long before you discover that most of those facts would never be realized anyway. I have seen managers struggle because they failed to come to terms with this fact. The more complex the situation you are managing the more daring and confident you need to be when making decision, because the degree of ambiguity and uncertainty is likely to be higher. The ability to make decision in these circumstances does not make you immune to failure, because you may still take the wrong decision. But not being able to make decision guarantees failure.

The same applies to decisions we make in our personal lives. Almost everybody makes big decisions in their personal life based on limited information, which they innocently mistake for or deliberately misconceive as complete knowledge. Recognizing this fact makes it easier to take decisions where the uncertainty and ambiguity is more visible to us.

This is not an invitation to abandon seeking relevant facts and information to reduce uncertainty before making decision. The point I am trying to make is that there is a fine balance to strike between how much information to collect, how much time to wait, and when to make decision. Making a decision is not always more risky than believing in the existence of reassuring information that actually does not exist or waiting too long when time is in short supply. This general article does not offer advice on how to deal with any specific personal or professional problem, but it highlights facts about how we think, form views, and make decisions that are useful to be always aware of. After all, we make decisions all the time.

Copyright © 2012 Louay Fatoohi
All Rights Reserved.


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