Identifying and addressing organizational uncertainty

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Why is it important to identify stakeholder uncertainty?

It is important to identify key sources of stakeholder uncertainties because uncertainties regarding the technology, products, or likelihood of firm success may stop important stakeholders from making necessary commitments to the firm. If stakeholders that you rely on getting support from are unwilling to back your company because they are uncertain about its success, you may have a hard gaining traction for your firm.

A cycle of other firms holding back support can be a vicious problem for companies – if a lot of companies withhold their support – waiting to see if the uncertainty resolves itself – then their lack of commitment may make it less likely that others will commit. The flip side is also true though – if you are able to overcome some uncertainties, get others to start making commitments, then this may make it easier to gain the support of others. Like a snowball, when you manage to get it moving, it can quickly gain momentum.

The impact of uncertainty on startups and new ventures

The problem of uncertainty can be particularly pronounced for startup firms looking to do something different from what has been done before. If you are doing something new for the first time you will likely have to convince many others to join or support your venture This can be a challenge because the nature of doing something new typically entails a lot of uncertainty as to whether the new approach will work or not:

  • Potential employees: May have uncertainties about whether the company is going to be in business a year from now.
  • Potential investors: May have uncertainties surrounding whether the company will be able to deliver on its vision.
  • Suppliers: May have uncertainties as to whether the company will see anticipated sales, and thus whether to commit to making investments in their operations.
  • Retailers: May have uncertainties surrounding whether the company will be able to meet commitments and whether the products will be successful with the customers. 
  • Customers: May have uncertainties regarding whether the company will be able to deliver on its promises. 

Approaches for identifying sources of uncertainty

Brainstorming likely sources of uncertainty

One approach to identifying concerns is to brainstorm, what if you were in their shoes, likely concerns that possible employees, investors, or customers would have about your venture. Put yourself in their shoes and think through the concerns that would run through your mind if you were in their situation.

Listening to the questions that are being asked

While it can be useful to brainstorm likely reasons why various stakeholders may be uncertain about committing to your venture, it is also important to actually speak with the stakeholders to understand their hesitations.

Simply listening to the question that they ask can be a key source of insight about the things that cause them concern. It may not be expressed as “I am concerned about this”, but if you have multiple people ask about how you are handling particular situations, it can be a good indication that this is something that they are concerned about. 

Directly asking your stakeholders what their uncertainties are

Another approach to identifying stakeholder uncertainties is to enquire what their concerns are. This may take the form of a relatively direct question or less direct such as “what would we need to do to address uncertainties that you may have”. Enquiring about their concerns can reveal issues that you may not have expected – helping you understand the issues that are preventing stakeholders from committing to your firm. 

Addressing uncertainty

Once you have identified sources of stakeholder uncertainties you can start the process of systematically addressing their concerns. For each area identified you can think about what it would take to remove the uncertainty.

For many sources of uncertainty, you can consider ways of using small-scale experiments specifically to eliminate the uncertainties. Through prototypes you may be able to demonstrate the viability of your technology, helping to gain the support of those unsure whether your product will work.

Gaining commitments can be cumulative – as you address one set of stakeholder concerns, and gain their support, it can become easier to gain the support of other stakeholders.