A Daily Dispatch from the Front Lines of Leadership.
December 19, 2024
Using the Uncertainty Matrix for Scenario Planning
The introduction of powerful applications in artificial intelligence has upset the normal strategic planning process for most organizations.
Changes and new applications are appearing so quickly that it is exceedingly difficult to get a grasp on where the threats and opportunities exist.
Good leaders and organizations engage in Scenario Planning to help them think through the many possibilities they need to prepare for.
One of the more popular tools for Scenario Planning is the Uncertainty Matrix. It can be applied to future changes in any arena, including artificial intelligence.
The Uncertainty Matrix operates on two axes: Uncertainty and Impact. Visualize a 2×2 box or grid with Impact on one side and Uncertainty on the other, both rated as high or low.
If we apply the Matrix to planning for the influence of AI, the grid might look like this with some possible examples:
Top left: high impact, high uncertainty (autonomous vehicles)
Top right: high impact, low uncertainty (fraud detection systems in finance)
Bottom left: Low impact, high uncertainty (music creation)
Leaders in a specific industry or arena might quibble with the examples, but the point is to use the Matrix to identify those trends and potential developments as a way to generate discussion and to guide strategic thinking.
By working through the Matrix with multiple possibilities, leaders can converge on a view about the future that can help them to prepare.
Leadership teams often use the Matrix to assist them in prioritizing projects and allocating resources to address concerns, risks, and opportunities.
The options available to combat or take advantage of future possibilities are more easily generated and evaluated when using the Matrix.
As this simple example illustrates, presuming that fraud detection systems will be dramatically improved by AI might give leaders more confidence in how they use credit cards for expenses or how they can ensure their billing process is not invaded by outside forces.
Working through the Impact and Uncertainties of AI is only one possible application of this simple but powerful tool.
Great tools improve the way leaders think. The Uncertainty Matrix meets that standard by making the future less puzzling. That’s pretty good for a simple 2×2 grid.
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