The Certainty-Uncertainty Paradox and How It Impacts Your Growth Investments

by Jason Ogden | Dec 3, 2024

The world is in flux, though sometimes we perceive it to be even more uncertain than normal. COVID, inflation, supply chain interruption, foreign war, interest rates, and US elections are some of the causes of recent heightened awareness. It’s enough to give any business leader whiplash, especially when trying to make smart investment decisions to fuel growth in light of the relatively stable prior decade.

The psychological tension between certainty and uncertainty is real, and it has a profound impact on how you allocate resources and what strategic decisions you make. It’s natural to crave certainty and to look before you leap. When we feel confident about the future, we’re more likely to invest, whether it’s in new equipment, expanded marketing campaigns, or hiring top talent. Certainty, or even the illusion of it, often leads to predictable, incremental growth.

But clinging too tightly to the need for certainty can be a trap. It can breed complacency, stifle innovation, and blind you to disruptive forces lurking on the horizon. Remember Blockbuster? They were so sure of their dominance in the video rental market that they dismissed the threat of a little upstart called Netflix. We all know how that story ended.

Here’s the thing: uncertainty, while often uncomfortable, is actually the engine of progress. It forces us to think differently, to challenge assumptions, and to explore uncharted territory.

So, how do you navigate this certainty-uncertainty paradox? The key is finding the balance. It’s not about throwing caution to the wind and making reckless bets nor just giving way to uncertainty as an excuse to do nothing. It’s about being strategic, informed, and agile.

Here are a few practical tips for navigating certainty-uncertainty:

• Get eclectic in your assessments: Leverage data and insights to inform your decisions, even when the future feels hazy. Market research, customer feedback, and competitive analysis, as well as your gut, can help you see things more clearly.
• Zero risk is high risk: Taking a truly “risk off” no investment position is guaranteed to delay or miss future opportunities altogether. Consider the timeline of your would-be investment and ask if the current uncertainty will likely resolve before then. Zero risk should be a strategy reserved for only the most extreme conditions like the 2008 global financial crisis or the early days of the COVID outbreak.
• Interruptability: Stay flexible while being active. Structure your investments as best you can with the ability to pause or even reverse them as much as possible should the worst-case scenarios play out. They rarely do.

Uncertainty is an inherent part of the business world. Instead of fearing it, embrace it as a catalyst for innovation and growth. By being strategic, adaptable, and willing to take calculated risks, you can turn uncertainty into your competitive advantage.