Making sense of profit in an uncertain world

Marker crossed out Un in the word Uncertainty. Close up.

Small-business owners are well versed in the uncertainties of commercial life. Even the act of opening a small business suggests a tolerance for uncertainty. As your business grows, however, it can be tempting to install management disciplines, protocols, tools and systems that promise to remove uncertainty and give you prediction and control.

Despite this, the idea of management as science has largely failed as a project; nothing that consistently worked then and there continues to work here and now. Management is awash with tools that promise certainty, with an if you do this, then you will get that outcome. Despite a soothing message of control, anyone who has used these knows they often fail to deliver the outcome promised!

At the recent QuickBooks Connect conference in Sydney, I presented a suite of practices to deal with complexity and uncertainty that can be a useful addition to your management tool-belt. Here are a few for consideration:

Constantly update situational awareness

Small-business owners should regularly refresh their understanding of their business context, and what’s going on around them. For your business, this can be easy; a great topic for a whole team discussion is “What’s New?”, asking everyone to contribute new things they have witnessed. Some will have consequences for the business, many will not. If you spot them early, however, you can capitalise on the good, and mitigate the bad.

Work with hypotheses and safe-to-fail experiments

These can help us learn about a new area in which we have no experience, and plan for potential outcomes. Running our own business, we have plenty of hypotheses – but a hypothesis suggests a possible causal relationship which can be tested. While we often say to ourselves “maybe IF we do this, THEN that will happen”, a safe-to-fail experiment can help you work as a team to better understand the possibilities ahead. Safe-to-fail is in stark contrast to fail-safe. Safe-to-fail experiments must be fast cheap and risk-free as we expect them to go wrong. Fail-safe is for vital elements like backing up your data, or conducting your finances in the cloud.

Tell stories

This practice helps a small-business owner make sense of the things when we don’t have numbers and data. While we can’t predict for future uncertainties, a strong narrative aligns a team, and will engage them in uncertain work when we don’t know how things will turn out. Phrases like “all that we know so far” and “we think if we do this, these good things will happen” help shape a story to give your team something to grab onto when no data or proof yet exists.

Build social capital

This asset exists between people, not within them, and binds your team together. Here’s a tip – do you know the families of origin of everyone in your team? If not, find time with a coffee or a bowl of chips to hear everyone’s story. Whether it’s about growing up, family rituals, childhood adversities or favourite stories of their younger years, the glue of connection, cohesion, and camaraderie helps us survive bumps and mistakes along the way.

The above practices come with a “use-with-care” warning, recognising we can’t ensure certainty against complexity and surprise. With these tools, however, you might find yourself discovering good surprises to help you make sense – and profit – in this uncertain world.

Marcus Crow, Founder, 10,000hours