Levels of Uncertainty

notes from 20/20 Foresight, H. Courtney

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Not all uncertainties are alike. We are usually so uncomfortable with the ambiguity of multiple futures that we shy away from peering into the unknown. Courtney advocates the exact opposite strategy: embrace the uncertainty and get clear on its exact nature and severity. He identifies the following four levels:
Level One

While we are confident of the general shape of the future, there are some key variables for which we do not have precise values. For example, a school district may know a great deal about its likely future, except for the number of new students who will enroll in the next three years. Without that value, it is difficult to do upgrades on facilities, hire enough teachers, or purchase the right amount of equipment and supplies.

It is possible to make some estimates, or to establish some "most likely lows" and "most likely highs" and then plan for the range.

level two

There are a variety of future scenarios, but it is possible to list them, and they are mutually exclusive and exhaustive. For example, the FDA will either have Democratic leadership or Republican leadership. Knowing that one of those two cases will be the fact, a pharmaceutical company can plan for how they structure and operate their Regulatory Relations department.

level three

There are scenarios that can be constructed, but they are more illustrative of possibilities rather than an exhaustive listing. When the Internet first started to blossom, there were a variety of interesting possibilities for how e-Business would emerge. No one knew if we had covered all the bases, but they knew enough to encourage discussions around some intriguing scenarios.

 level four

In some cases, it is impossible to even frame scenarios. Companies that have pushed into what used to be the U.S.S.R. are finding that "doing business" is a morass. The situation is so fluid and so unstable that any scenario is merely a wish list. It may be years before the possibilities sort themselves out. Companies working in such highly uncertain environments stand to make enormous gains (they can even shape the emerging futures), but they also risk enormous losses.