One of the most Useful Tools for Dealing with Uncertainty

One of the most Useful Tools for Dealing with Uncertainty

My company, like most others, is wading through unprecedented levels of uncertainty. It can be a helpless feeling trying to make critically important decisions for your organization when you feel like you are shooting in the dark. Though most people make decisions amidst uncertainty all the time, we simply trick ourselves into ignoring uncertainties. We do this by making huge assumptions that give us a feeling of precision which, in turn, helps us feel more confident about the decision we are making. Once the decision is made, and some assumptions fall apart, we use the creativity, nimbleness, talent, and passion of our teams to overcome and hopefully get us to success. 

When too many things shift at once, however, there is simply too much uncertainty, and it feels like there is very little information available to base your decision. These questions probably feel familiar: When will the recession hit? How long will it last? When will our customers start buying again? Is what we do relevant right now? How much should we reduce our expenses? Should we go on the offense and launch a new product? 

In times of uncertainty people oftentimes feel hamstrung because they are still pursuing an exact answer when a simple range of answers, even a broad range, will be helpful and provide insight. If something is extremely uncertain, reducing uncertainty and gaining clarity can be much easier than most people think. 

One of the most helpful tools I use regularly is the "Rule of Five", which I picked up from Douglas Hubbard's Book: How to Measure Anything. According to Hubbard, there is a 93.75% chance that the median, of any random sample of five, is between the smallest and largest values from that data set. We often think that the more uncertain a situation is, the more data you need to drive clarity, but the truth is, you need very little data to drive at least some clarity. 

For example, if you want to know when your customers think they will start buying again, you might take this approach. Ask five random customers when they will start buying your product again and assume there is a 93.75% chance that the actual answer will be somewhere between the highest and lowest answers. It is almost shocking how well this works.  

Imagine if you took your biggest questions or uncertainties and applied a quick test to each, knowing you only need a random sample of five for each question or uncertainty. You will be surprised by how much you can reduce uncertainty, and gain clarity, with a little bit of data and minimal effort to collect that data.  

The hard part about this is to make sure you ask the right questions and gather a truly random sample that is not biased. The book spells this method out clearly, along with many other great tools, and I highly recommend a copy for anyone whose job is to reduce uncertainty for their business. 

I hope this helps. 

If you don't have time to jump into a dense probability and statistics book and want to chat about the Rule of Five, email us at  During the COVID-19 crisis, we are volunteering to facilitate 90-minute sessions to help organizations navigate these uncertain times

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