Managing Uncertainty

If there’s one thing that is certain about business, it’s that there will always be uncertainty. That hurts your employees because if they are worrying about what MIGHT happen, or if they are not very confident about their place in the firm, or their job security, or their paycheck, then their productivity is likely to be seriously disrupted. If they are focused on potential problems rather than on their work, your firm suffers. It is hard to come up with something fresh and new and original when you are wondering how well you are really doing in your job, or when you are not sure how you are going to buy groceries next week, or whether you are even going to have a job come next Tuesday. You cannot eliminate uncertainty, but you can try to minimize it, and you can mitigate its effects by making your firm, and your employees, more flexible.

How do you minimize uncertainty? First, make sure everyone knows what your objectives are and how you expect to accomplish them. Have a strategic plan, and do not keep it hidden away…if people don’t know what’s in your plan, if they don’t understand the firm’s vision, mission, and goals, if they don’t understand WHY they are doing what they are doing, then they will be left wondering. Your employees can only do what you need them to do when they understand what that is. Yes, plans change, but if you at least have a baseline from which to start it helps people understand your business better.

Understand your market and your overall operating environment. You need to adapt as the world around you evolves, but that adaptation will be a lot smoother if you see it coming. Unexpected change is disruptive, while expected change is transformative. Make your change process an evolution rather than a revolution when you can, and keep that process transparent so your employees don’t have any worries about what’s happening.

Try to keep some certainty in your human capital. Do what you can to hold on to good employees rather than having them give you their notice. Cut loose your poor employees when you realize that the emerging problems you are seeing will be the norm rather than the exception; don’t drag it out and leave everyone to wonder when the slacker will get the ax. Provide regular feedback, both positive and negative (but constructive), rather than waiting for annual performance reviews. Be very clear about the performance standards you expect your employees to meet and about what it takes for them to advance, so they know what their focus should be. Try to hold on to talented employees during a slump in business, whether by postponing raises or finding other efficiencies, rather than resorting to layoffs.

When unexpected things happen you can minimize the effect if you’ve built flexibility into your firm. Break down stovepipes between different functions and help your employees understand at least the basics of what others are doing, so they can help cover for each other when necessary. Have a succession plan in mind, at least, so that if a leader is suddenly gone there is someone ready to step in and assume that role, whether temporarily or permanently. Do not let people wonder about bad news, which just leads to gossip and worry; deal with problems up front so people can get past the stage of being disrupted and move on to the stage where they fix any gaps and resolve any problems. Encourage your employees to ask “what if…?” and think about what would really disrupt them and what they would do about it if it happened.

Last year we spoke with a software developer for a startup firm that was only issuing him a paycheck about half the time, and for only about half the amount. There were all sorts of problems with tax withholdings as well, so not only did he never know if he would be able to pay his rent, he had to deal with a confused tax revenue agency at tax time. He stuck it out as long as he could because he really wanted this company to succeed, but in the end, he needed a steady paycheck and so had to leave. This is the kind of employee you want — someone who will stick it out despite the worst problems — but you will lose even these hardy souls without some stability in your company.

Uncertainty always exists anytime humans are involved, and that is simply a fact of life. Just as each of us has our own plans for ourselves, so does everyone with whom we interact, and their plans do not always match up with ours. One of your biggest roles as a leader is to minimize uncertainty for your employees; help your employees do their jobs by you first doing yours.