Ambiguity & Planning

Gerwig 2013-12-18

Are you a planner? If so, you know it. You don’t have to take a test or go through a psychological assessment. You love planning everything from family vacations to weddings to projects at work. You have lists, notebooks, spreadsheets and planners on your desk, in your briefcase, in your backpack and in your purse.

Not all planners are the same. Some of you plan by the month, others plan by the minute. Some of you plan your entire life, others plan only a portion or a “slice” (such as work or recreational pursuits). Some of you plan because you love it (the plan is the end, not just the means), others plan out of necessity. There are times I love to plan (always at a high or strategic level) and times when a plan seems to constrain me (I’m spontaneous by nature). What about you?

If you want to maximize what you see and do during your vacation to Asia or Disneyworld, develop a detailed plan (start with the strategic and move on to the tactical). Or, go with someone who has. If you want to enjoy financial security during your retirement years, plan early and in detail. If you want to minimize business risk, develop plans that accommodate several different future scenarios and include various contingencies.

Whether you personally have a plan or not, a key to success in any endeavor is how you deal with ambiguity, today and in the future. You know the future is coming. You have developed plans based on a set of assumptions. You know the future is full of ambiguity, it isn’t predictable. What do you do?

It’s not practical, beneficial or wise to stop planning. Lists, spreadsheets, to-do lists, and strategic plans are useful tools. The trick is to build contingencies into your plans that minimize impact of the inherent variability in planning assumptions:

  • You don’t know which way a foreign currency will go versus your home currency. Will it go up or down? You can take an educated guess, but you don’t know with certainty. In response, you might hedge the currency to minimize this unknown and intelligently deal with the ambiguity.
  • You (or your child) have a preferred university to which you’re trying to get accepted. But because there is a degree of uncertainty, you develop a plan that calls for applying to several other universities in case you don’t get accepted to your first choice.
  • You employ direct labor to staff your operations, but you also use a temp agency that provides temporary/contracted workers to flex your workforce to accommodate variability in consumer demand. This provides flexibility to deal with the ambiguity that the future certainly will bring.
  • You develop your monthly spending budget based on 90% of your take-home pay, leaving you 10% to deal with unknown expenses that are difficult to plan. This mitigates your financial risk.

Obviously, I could go on and on providing examples of plans that have contingencies built in to deal with the unknown, the ambiguous, but you get the point. There is value in having a plan. And a plan that has contingencies built in to accommodate the future, which is, by nature, ambiguous, is a stronger plan than one that does not. But in the end, a plan is a plan. You as the creator of the plan or a follower of the plan, have to be bigger than the plan. Remember, the plan is the means to the end, not the end.

If you go to Disneyworld and the plan tells you to get in line for Splash Mountain at 9:30am (based on minimizing your wait time and increasing your ride density), but Splash Mountain is closed for maintenance, you need to adjust the plan. You need to deal with ambiguity. … If your retirement plan assumes you’ll earn 9% on your investments, but you’re actually earning 6%, you need to adjust. You can increase your contribution, change your investments choices or lower your retirement expectations. … If your demand plans change, you can miss customer orders or hire more temporary workers. But you can’t achieve your initial targeted results without adjusting the plan.

You get it. You can, and should, have a plan, but you need to recognize that your planning assumptions will invariably change. Why? Because things change. The world-at-large does not remain static. The trick is to develop a plan, monitor conditions and then adjust as necessary. Don’t fall into the trap of sticking with your original plan despite changes. Remember, the plan is not the end. The plan is a means to end.

The ability to deal with ambiguity and planning – they both add value. To be successful, you must be prepared to do both. You must balance the two. It’s “both and” not “either or.” … What does the overall process look like? Plan. Adjust (dealing with the inevitable ambiguity). Plan. Adjust. Plan. Adjust. Over and over the cycle continues. … Remember, don’t be a hostage to the plan and remember that ambiguity is a reality.

Are you a planner? Are you able to set aside your plan if needed or adjust your plan for future realities? What suggestions do you have for building contingency into your plans?

As always, the floor is open to your comments, suggestions, thoughts, and feedback.

Dr. is an agent of change and is able to balance the needs of the business and the needs of people. Dr. Gerwig believes and practices the values of performance and delivery of business metrics while simultaneously developing and growing people into leaders. You can contact him at RobertGerwig[at]


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