There is a saying: insight comes after action far more often than action comes after insight.
Decision-making under uncertainty is a normal part of business. One could argue that it is at the core of managing a business. It is simply impossible to assemble all the data relevant to a decision. Other barriers include some of the data being in the future as well as being generated continuously, which could lead the decision-maker to wait indefinitely.
This leads us to another saying: paralysis by analysis.
The uncertainty surrounding decision-making provides an excuse for the timid to avoid making any real decisions whatsoever. Only by raising the spectre of risk can decisions be made. For executives, since full information can never be acquired no decisions are made. Sound familiar?
Action generates information. The first round of information triggered by action lies in the divulging of relevant information both internally in the company as well as externally from relationships with clients, partners and suppliers.
How many times have you heard an internal company announcement about the launch of a new initiative only to realise that your department has been working on a similar project for months?
Perhaps you announce a new product and receive positive responses from your clients. Or perhaps the response is negative, saving you the expense of launching a product.
But these are just announcements. Taking action is riskier than making an announcement, but it is just as important from an information point of view.
Perhaps a personal example would be useful. Nearly everyone has competed with other people, be it in board games, card games or physical sports.
In these games there are two scenarios where you have to make decisions under a lot of uncertainty. The first is when you are just learning the game, but it is impossible to learn all the rules and strategies by reading. Learning comes from playing and losing a lot, and developing your understanding of the game incrementally.
The second scenario is when you are proficient in the game but you are facing new opponents or those who have adapted to your methods.
So much of your strategy depends on your opponent’s strategy, regardless of the skill sets of each player. A perfect example is Germany’s win in the Fifa World Cup 2014. Football commentators generally agreed that the individual skills of the German players were not necessarily superior to other teams but that their choice of a fast-paced, counter-attacking game strategy transformed a strong group into an unstoppable team.
The German team had used the action to insight tactics in two ways. After Germany’s previous World Cup win in 1990, they performed abysmally at Euro 2000 in Belgium and Holland. The German Football Association decided then that it was time for an overhaul of the game in the country and put in place a rigorous, long-term strategy to get the team back to its former glory.
By the time the 2006 World Cup was played in Germany, the home nation was on the right path but, under coach Jurgen Klinsmann, lost to Italy in the semi-final.
Rather than choose one of the two easy extremes of doing the same thing or undergoing a complete overhaul of the strategy again, new coach Joachim Loew – part of the old regime as Klinsmann’s assistant spent the next decade refining the strategy by taking tactical action and building upon it based on what he learnt.
The devastating counter-attacking game was first introduced in 2006 and had consistently been improved over the subsequent eight years. Despite falling short several times, the coach was thinking long term, understanding that he would have to lose games and tournaments to gain insight into his opponents as well as his own team so that he may better design a winning strategy.
These insights included solutions to the challenge for European players to play in a tropical climate such as in Brazil in the most recent tournament. The coach also learnt the speed with which his opponents would adapt to tactical changes introduced by him and ensured that he introduced new tactics at a frequency that kept his opponents off-balance.
The results were stunning, including a 7-1 win over powerhouse and host team Brazil, with the first three goals scored in less than two minutes. Germany went on to win the World Cup after being denied for a quarter of a century.
Take action, learn from it, apply what you learn, repeat.
I would like to thank The National’s sports columnist Ali Khaled for his input on this article
This article was originally published in The National.