Deciding Factors

Has the United States ever launched a military operation in the face of so many unknown variables? Have we ever fought such a covert enemy? Who can predict the outcome of this war against terrorism? How will we know if we've won?

Today, government officials face uncertainty when making decisions involving America's military tactics, domestic policies, and economic problems. And beyond the beltway, business leaders encounter more questions than answers as they struggle to maintain or capture profitability in the midst of mounting unemployment, wavering consumer confidence, and volatile markets. In short, nothing is certain anymore.

"Gone are the days when you could eliminate uncertainty or wait to gather enough information to reduce uncertainty to negligible levels," says J. Edward Russo, coauthor of the forthcoming Winning Decisions: Getting It Right the First Time (Doubleday/Currency, December 2001). "You wait, and someone will eat your lunch. Leaders today have got to respond adaptively as the world around them grows more complex and ambiguous."

History provides little strategic guidance, because no nation has ever faced this complex set of circumstances before. The decisions facing the White House are colossal, and the stakes could not be higher. At home, how do you keep American citizens alert to terrorist hazards, yet avoid widespread anxiety? How do you retain popular support when reporting even the smallest military victory may jeopardize troops' safety and success in Afghanistan? Abroad, how do you destroy Al Qaeda and its supporters while keeping innocent civilians safe? How do you unite an international coalition of allies without becoming entangled in long-standing political battles?

When the decision-making environment changes so too must the processes for investigation, evaluation, and action. That is why, during this period of unrelenting doubt and danger, leaders must rethink their decision-making techniques, says Russo, professor of marketing and behavior science at the Johnson Graduate School of Management at Cornell University. Here, he offers five strategies for making smart decisions in an age of unknown threats and uncertain results. The only thing he's sure of: It won't hurt to try.

Manage Uncertainty

More than 100 years ago, the esteemed Prussian general Helmuth von Moltke said, "No battle plan survives first contact with the enemy." And he was right. Especially today, a leader's primary job is to remain alert and to respond quickly to each new threat or circumstance, Russo says. Preparing is no longer enough. To manage uncertainty, you must be willing to scrap your carefully laid plans at a moment's notice and start over again.

"For leaders today, uncertainty has grown because of smarter competitors, globalization, technology, and the rapidity of change," says Russo, chief scientific advisor of a software and business intelligence company called WiseUncle. "So your strategy should not be to eliminate uncertainty, but to accept and manage it."

In Winning Decisions, Russo and coauthor Paul J.H. Schoemaker define four levels of uncertainty. In the first level, you work with mostly known variables. By level four, you're swimming in obscurity. You're asking questions for the first time like, How will the American public respond to a terrorist-launched epidemic of smallpox? And you're receiving few credible answers. Level four is where we are today.

"If you don't know what to do, your gut reaction is to lean toward the world you are prepared to deal with," Russo says. "But a large airplane loaded with thousands of gallons of jet fuel has just hit your building. That's not the same world you know. You can't control it, but you can adapt to it."

Right now, the best thing leaders can do is to gather information, he says. They need to acknowledge their limitations and to accumulate all available intelligence. That knowledge will help them react quickly and flexibly when -- not if -- the situation changes.

"It's so difficult to predict the future that there's almost no point," Russo says. "You do more harm than good by believing that you can forecast anything today. So you need to probe constantly and test actively. Don't wait for something to happen. Be as prepared as you can, and then respond rapidly and adaptively when it does."