“It’s a cliché to say that the world is more uncertain than ever before, but few realize just how much uncertainty has increased over the past 50 years,” according to fascinating Harvard Business Review piece.
“To illustrate this, consider that patent applications in the U.S. have increased by 6x (from 100k to 600k annually) and, worldwide, start-ups have increased from 10 million to almost 100 million per year. That means new technologies and new competitors are hitting the market at an unprecedented rate. Although uncertainty is accelerating, it isn’t affecting all industries the same way. That’s because there are two primary types of uncertainty — demand uncertainty (will customers buy your product?) and technological uncertainty (can we make a desirable solution?) — and how much uncertainty your industry faces depends on the interaction of the two. Demand uncertainty arises from the unknowns associated with solving any problem, such as hidden customer preferences. The more unknowns there are about customer preferences, the greater the demand uncertainty.”
Where does your industry sit?
The authors have a new book called The Innovators Method which shows managers how to adapt to uncertainty.
Their bottom line: “Success requires an understanding of how much uncertainty you face and the ability to manage those uncertainties in new ways.”