Aperture Book of the Month - September 2024

We’re enjoying the heresy that we see growing from a number of directions at the moment about conventional ways to view decision making and strategy development. Which is why our book of the month for September is ‘Radical Uncertainty’ by the established economists, academics, and senior leaders John Kay and Mervy

n King.

Kay and King stress the importance of embracing, or at least recognising and accepting, the inherent uncertainty of the real world. They caution against reliance on probabilistic modelling of the sort that economists have relied on for the last eighty years. Radical uncertainty is reflexive and non-stationary, which is exactly the opposite condition to that on which most such models are based.

Uncertain and complex environments are also interconnected in ways that are impossible to predict. According to Kay and King, good strategy for a radically uncertain world avoids ‘the pretence of knowledge’, recognises that we cannot know what the future will hold, and provides a reference narrative (rather than precise and quantitative objectives) setting the context for agile engagement. This is the difference between the puzzle of a small-world (which can be modelled) and the mystery of the real world (which can’t).

The authors argue that to plan based on the probabilities of ‘standard deviation’ increases exposure to risk by pretending the world is stable and stationary. In uncertainty lies creativity and entrepreneurship. As one would expect, their argument is laid out elegantly and with the benefit of their places at the table of strategic decision-making.

‘Radical Uncertainty’ is a challenging book, littered with case studies, references, and quotes. Its themes are repeated perhaps a little too much for some tastes, but its message is clear. Conventional, reductionist, ‘small-world’ approaches are dangerously mis-aligned with reality and limit the natural human ability to deal with uncertainty. In a world of SMART targets this is timely advice.