In the crucible of leadership, nothing squeezes a leader more than uncertainty. Meeting the challenge, these authors write, requires the courage to act like a leader, the courage that will enable a real leader to overcome a fear of failure.

When Henry Maudslay created the first precision lathe in London in the late 18th century, he became one of the leaders of a new and vastly influential “e-world.” The “e” of course stood for “engineering.” Without the widespread repeatable precision that Maudslay’s lathe granted engineers around the world, the use of steam power, and later, oil power, might never have become so widespread.

The power of Maudslay’s work resided in its certainty; it guaranteed that if certain machines and methods were used, each screw thread or turned drive shaft could be manufactured to the same standards by almost anyone anywhere. It was one of many moves away from an era of craftsmanship, which offered multiple, diverse solutions, toward the era of the single “best” solution, characterized by mass-precision production.

But Maudslay’s story is also representative of the development of leadership thinking and theory during the latter part of the first e-world: a move from idiosyncratic leadership to one based on standardized, formalized certainty. How ironic that the type of leadership most likely to be effective now – just as the second, modern “e-world” has lost some of its glamour — is one that values individual craftsmanship. In effect, leadership today optimizes different approaches to problems rather than a standardized, single-best-solution approach.

Two hundred years after Maudslay, the leaders who are creating and influencing today’s e-world are embracing the very conditions that he worked so hard to eliminate — uncertainty and ambiguity. And though they have no choice, it is a choice for the better.

The history of history

When we were preparing our book on how leaders face ambiguity and uncertainty (Philip Hodgson and Randall White, Relax, It’s Only Uncertainty: Lead the Way When the Way Is Changing, Financial Times Prentice Hall, London, Prentice Hall, 2001), one of us drafted an introduction pointing out all the new aspects of business life, noting that everything was changing at an unprecedented rate. One of our editors challenged our view of leadership and change: “It’s not new,” he said. “That’s all I’ve ever known, it’s ordinary.” He was interested in what things were going to be like in the next 10 to 20 years. He was 31; we felt a hundred years older.

But our editor was helping us understand an important point that became even more clear when we talked to people in organizations like Cisco, Yahoo and Hewlett-Packard. Having a brief history means that you don’t have a past that tells you something can’t be done today because it wasn’t be done before. When we expressed surprise at how quickly Cisco could close its books at the end of a financial period, one of our contacts replied,

“An organization of our size, but with a longer history than we have, would know that a one day close was impossible. But we started that way, so we didn’t have to unlearn anything. Even so, we are constantly under pressure to improve.”

What was leadership and what did leaders do?

For those of us who have been around a bit longer than our editor at Financial Times and our Cisco contact, the change in perspective on what leadership is and what leaders do in the past 30 years can seem startling. It was only 30 years ago that we had a series of contingency theories, of which the Situational Model of Leadership was perhaps the best known. Drawing from what was called The Ohio State Studies, leaders were seen to exhibit two types of behaviours: task and relationship. At their root, such contingency theories really required the leader to know what had to be done, and additionally, to have a pretty good idea of how to do it. Situational Leadership and other models like it required the leader to step in if the follower’s output didn’t meet expectations. In short, there was a “right” and a “wrong” way to do many things that needed to be done. The effective leader was the expert and was in control.

In the ‘80’s and early ‘90’s we learned about empowerment. We invited people to reach for a vision. It was at least an emotional process. We managed while we wandered about; we took on hairy, audacious goals, and if we really did let go of the need to control, we acknowledged that while we still knew what we wanted to achieve (the vision), neither we nor anyone else knew how to achieve it or could achieve it entirely on their own. So the effective leader empowered others. She knew what task she wanted to accomplish but couldn’t get there alone.

Where are we now?

It would be simple if leaders always knew what to do and at least sometimes knew how to do it (see Fig.1.). But our research over the past 10 years has shown that uncertainty has a habit of creeping into every kind of circumstance. Two years ago, who would have forecasted the slump in telecoms? Who—apart from a small group of fanatics or an incredibly prescient intelligence service—could have predicted the events of Sept.11, 2001?

Our political, community and business leaders are facing great levels of uncertainty. The true meaning of the phrase, “Things can never be the same again,” is that we, as followers or as leaders, can only go forward. But perhaps we have also learned that learning itself is the key to survival, or freedom and prosperity – or however else we define success.

What does this mean for leaders?

The modern leader needs to have all the skills that leaders of the past acquired over many painful years. They need an enhanced dimension of skill and they also need to promote learning. At a conference held at Cornell University’s Johnson School of Business in 2001, a number of senior executives discussed how organizations could become more dynamic — more agile. Two of the conference contributors stood out with their descriptions of sponsored learning in their organizations’ quests to become more agile.

Corning, a 150-year-old company that made its name in glass cookware and television tubes, now manufactures fibre optics and flat-panel displays and has become “the information revolution’s prime contractor.” Its CEO at the time, John Loose, said:

“It is so easy for a company that has been so successful for so long to become a prisoner of processes of the past. We needed to accept ideas from outside—we acquired $10 billion of companies in the previous five years. But the whole transition has been accomplished by execs who have mainly worked in the Corning Company. Transformation is not a project—it is a mindset.”

Marty Coyne, President, Commercial Group, Kodak, added these comments on the power and importance of speed, risk and personal growth—a heady learning formula indeed:

“You can never move fast enough, even though it seemed as if you were going too fast at the time. If you make a mistake, the world won’t come to an end. If you think of delaying, ask what you’d really learn in the next few months — just move. Everything is a development opportunity — even finance meetings. I have yet to find a personal development plan that is too aggressive.”

Figure 2

Why do leaders create these tough and demanding learning opportunities and challenges? Precisely because today’s sometimes find themselves in the position of not knowing what needs to be done and not knowing exactly how to do it (see Fig. 2).

In The Future of Leadership, we showed that because the things Loose and Coyne referred to are difficult to learn and at the same time valuable to the organization, they can lead to some form of sustainable competitive advantage and value creation. (Randall White, Philip Hodgson, and S. Crainer; Pitman, London, 1999). By taking on what we call difficult learning, organizations hope that their competitors will be unable or unwilling to follow them along such a steep, demanding and risky learning curve. But leaders who promote this approach recognize that the route to difficult learning is not to head toward things they and their organization know a lot about. Instead, it is to head toward the things they know least about—the areas filled with uncertainty and ambiguity.

What can we do about ambiguity and uncertainty?

Let us be clear. You reduce uncertainty by applying strategies and making decisions. The way that strategy is pursued may be part of a grand plan or it may be much more akin to continual experimentation. Our work doesn’t seek to reduce uncertainty; it increases the ability of leaders and followers to work more effectively when facing it.

Why not relax?

When you ask people from the worlds of sports and the arts what makes a performance great, one of the most commonly cited requirements is being alert but not overly tense or stressed. The best performers don’t seem to be hurried and hassled; they seem to have time to hit the note, make the stroke. Now, let us transfer our attention to individual business performance. During countless interviews and workshops, we have heard executives report that too much ambiguity makes them feel stressed and tense. Is it likely that these are the conditions that will allow them to perform at the highest level? We doubt it. So our research is aimed at helping executives who have to live with high levels of ambiguity learn behaviours that help them experience the least stress so they are able to perform to their highest capability.

Have ambiguity and uncertainty increased?

In the past 20 or so years, many more people, at different levels in organizations, have begun to sense and feel ambiguity in business situations. Fifty or so years ago, many great leaders felt huge uncertainty based on what they perceived as ambiguity. As Henry Ford said, “Obstacles are those frightful things you see when you take your eyes off your goal.”

But back then followers didn’t feel that they faced the same ambiguity as their leaders faced. Followers were remote from their leaders. In recent years, despite the focus on empowerment, the follower’s responsibility was to achieve the vision, not to question it. Now we’ve come full circle, where leaders and followers are closer to each other, at least in having access to the same data. Leadership is seen less as a birthright and more as something that is open and accessible to all. Leaders and followers share ambiguities and uncertainties. And so, many followers are correct in perceiving that their levels of ambiguity and uncertainty have increased.

Figure 3

How do leaders and followers handle uncertainty and ambiguity?

In the 10 years, we have identified eight broad strands of behaviour that seem to help people cope with ambiguity and uncertainty. We call the skills Enablers, and we have characterized them as differences in personal styles (see Fig. 3).

We identified many of these strands of behaviour among managers and executives during the course of structured interviews and questionnaires. But an additional and perhaps unusual source of ideas for us was children ranging from 4 to 12 years old. They face huge levels of uncertainty because they don’t know much about the world in which they find themselves. For the most part, children seem to handle it well—or at least better than their parents. Watch a family in the morning eating breakfast, as everyone is only too conscious of the school-imposed deadline. Who looks more relaxed—the kids or the parents? What is the children’s secret? Maybe it’s the secret of Cisco, which supports and applies vast amounts of learning that is not constrained by history and the consequences of being late.

One strand of behaviour that we frequently noticed in children is what we have called the Mystery Seeker, someone who seems to get energy from not knowing. Mystery seekers are curious and intrigued, and they have a hunger to explore and probe. They want to know what happens if… Most children have this great curiosity; they want to experiment and explore, usually in a playful sort of way. The British inventor James Dyson says that success is 99 percent failure. Dyson produced more than 5,000 prototypes of his new vacuum cleaner, but his persistent curiosity helped to make his invention the European brand leader in five years. Just two years after its launch, it had become Britain’s best-selling upright model, overtaking Electrolux, Hoover and Panasonic. Mystery Seekers like Dyson seem better able than many to handle difficult learning. And one of the reasons they can is that they tend to be unafraid of failure.

In the edge-of-chaos world in which so many organizations now seem to live, the crucial ability is to be able to take a risk, find out that it didn’t work out, learn from it and move on—variously termed “fail fast” or “fail forward.” But it’s hard to find good role models, either at the organizational level or among individuals. As one engineer at Hewlett-Packard said: “You’re not a real engineer in HP until you’ve lost us $1 million.” Or, as Corning’s John Loose said:

“Part of my job is to stop people from being too comfortable. How do we treat risk takers when failure occurs? Mainly we promote them. I invested in a project in another country. At the time the project was a crazy idea. It didn’t quite work out but I got promoted.”

These are the exceptions. Why is it so hard to overcome a fear of failure? Our answer is that it goes back to our schooling.

Imagine you are 9 years old and your teacher has asked the class to name some countries in the Southern Hemisphere. You don’t have an answer. What do you do? You take a profound interest in the desktop in front of you, of course! The kids who know, wave; the kids who don’t, avert their eyes. The real lesson learned? If you don’t know, don’t show. We estimate that most children experience this particular piece of conditioning more than 10,000 times in their school years. It creates a very powerful survival instinct, and for many it lasts throughout adulthood.

Fast-forward that nine-year-old, now grown up, into an executive meeting in a leading business. The CEO asks a question that is the sophisticated equivalent of “Name a country in the Southern Hemisphere.” What is everyone’s instinct that doesn’t have a good answer? All too often, it’s “Don’t attract attention”, and “Don’t show that you don’t know.”

Yet in the e-world we have constructed for ourselves, that is absolutely the wrong response. We want people who will leap to their feet to call attention to their lack of knowledge and lead the way to find a better answer, to head toward the difficult learning, no matter what the history, and to help their organization derive value from the process. When Lou Gerstner took over IBM, he argued powerfully that the company didn’t need a vision; it needed to get to work. He was focused in his belief that to survive, IBM needed to perform. A few years later, Gerstner was equally emphatic about his reason for embracing the uncertainty of the Internet: to survive. It takes courage to face up to your own and others’ expectations about how to manage uncertainty. In our view, that really is leadership with a capital “L.”