The climate has shifted: uncertainty is here to stay. But three critical practices can help your organization adapt, writes Scott D Anthony
Step back to 1962. A small team at Procter & Gamble faced a critical challenge: how to successfully market a high-quality disposable diaper.
Research and development had started back in 1956 when Vic Mills, leading P&G’s Exploratory Developments Division, had tasked Bob Duncan with creating a disposable diaper. At the time, 80% of American homes had a disposable diaper – but poor quality relegated them to emergency use only.
Duncan’s idea was to create a high-quality solution that could be priced at a substantial premium. The first tests failed due to poor product quality. Yet even when scientists cracked the code of absorbent, comfortable diapers, P&G struggled to find a price point that worked with consumers.
So in 1962, the development team sought to make sense of the data it had collected. The product seemed to work and consumers seemed to like it – just not enough to justify the 10% per diaper premium pricing.
“We didn’t have any valid scientific research methods for determining consumer price/volume elasticity,” P&G research scientist Henry Tecklenburg noted in a 1990 retrospective. The team probed consumer pricing attitudes, in what one participant described as an “off-the-wall fishing trip,” and came up with a target price. “With a precision completely unjustified by the scantiness and spread of the data, we established the organizational goal of 6.2 cents per diaper,” recounted Tecklenburg.
Hitting that price point required fundamentally rethinking the manufacturing process. It meant P&G had to shift distribution to more mass-market channels that could live on lower margins. It changed everything.
P&G took bold action in an uncertain environment: recall that 1962 saw the war in escalating, and the existential threat of the Cuban Missile Crisis. The company maintained its effort despite geopolitical uncertainty, product development struggles and even failures in test markets – setting it on a path to ultimately take more than 90% of the disposable diaper market by the early 1970s. Its Pampers brand went on to be the first in P&G’s history to register more than $10 billion in annual sales.
The challenge of uncertainty
Today’s leaders confront uncertainty that verges on utter chaos. In early 2025, AlixPartners reported that two-thirds of chief executives reported experiencing substantial disruption.
There’s a seductively simple answer to the challenges of disruptive change, detailed in Dual Transformation, the 2017 book I co-authored with Clark Gilbert and Mark Johnson. In the face of disruptive change, companies should simultaneously reinvent today’s business (transformation A) and create tomorrow’s growth engine (transformation B). Companies ranging from Adobe to Walmart have shown how dual transformation can flip disruption from a threat to an opportunity.
Yet following this seemingly straightforward prescription is harder than it looks, especially when uncertainty spikes. It’s natural – indeed, hardwired in humans – to avoid uncertainty. Psychologists call this the status quo bias (we prefer things to stay the way we are), or the uncertainty effect (we dramatically undervalue risky prospects).
A further challenge is that the smartest, most successful people can struggle with change because they have to unlearn before they can learn. Consider an experiment by Destin Sandlin, host of YouTube channel Smarter Every Day. He asked a welder to change his bike so that when he turned the handlebars right, the bike would go left, and vice versa. How hard could it be, Sandlin wondered, to learn to ride the backwards bike?
Very hard, it turns out. Just try explaining how to ride a bike: you likely learned when you were young and now do it fully unconsciously. To learn how to ride a backwards bike, you have to first unlearn how to ride a normal bike.
Sandlin’s first ride went nowhere. It took him eight months of practicing, five minutes a day, before he could ride the backwards bike. When he got back on a normal bike, he had to re-remember how to ride it – though fortunately this only took 20 minutes. Interestingly, it took his six-year-old son, who had less to unlearn and the higher neuroplasticity that comes with youth, only two weeks to learn how to ride a backwards bike.
In a seminal 1991 Harvard Business Review article, ‘Teaching Smart People to Learn,’ Chris Argyris noted that most leaders lack Sandlin’s ability to persist through such painful unlearning. “Put simply, because many professionals are almost always successful at what they do, they rarely experience failure. And because they have rarely failed, they have never learned how to learn from failure,” Argyris noted. When they do fail, “they become defensive, screen out criticism, and put the ‘blame’ on anyone and everyone but themselves. In short, their ability to learn shuts down precisely at the moment they need it the most.”
Here’s what happens when leaders face uncertainty. Uncertainty leads to conservatism. Conservatism feeds constraints. Constraints lead to a polarizing choice: protect the present or bet on the future? The natural choice is to reduce focus on innovation and growth, and instead cut spending, hunker down and prepare to weather the storm.
Leaders don’t face a one-off storm, however. They face a shift in climate.
Practices for our new reality
Like it or not, we are in the forever normal of predictable unpredictability. Thankfully, three practices can improve the chances of finding the upside of uncertainty.
Practice #1: Rethink time
In the midst of uncertainty, it’s easy to narrow our focus to the here and now. Leaders instead need to dramatically expand their sense of time, simultaneously considering the distant past, the present reality, and the far future.
That’s exactly what Masahiko Uotani did when in 2014 he became chief executive of Shiseido, a cosmetics firm based in Japan. Uotani was the first outsider brought in as CEO in the company’s then 142-year history. He launched a comprehensive transformation effort that changed the company’s portfolio of products, structure, culture, and even spoken language (from Japanese to English).
Academic research shows that change that threatens an individual’s identity can be particularly challenging. To combat this challenge, Uotani deftly drew on Shiseido’s origins as a company where East meets West, and beauty means science. He could then say that while it felt like everything was changing, in fact the essence of Shiseido would remain intact.
Uotani simultaneously described how the strategy set the foundation for Shiseido’s growth for the next 100 years. Expanding the horizon helped to clarify the key decisions.
Norio Tadakawa was the chief financial officer in the early stages of Shiseido’s transformation. “We spent a lot of money,” he said. “Hundreds of billions of Yen.
“In a sense, it was simple to make these investment decisions because we are here to build the foundation for the next 100 years. The long-term view enabled this simple and quick decision-making.”
Uotani integrated all of this into a set of practical steps to drive growth and performance. Over the next five years Shiseido surged. While the pandemic proved deeply challenging, the foundation set by Uotani positioned the company to continue to perform.
Practice #2: Destroy to create
In 2010, Mark Parker was early into what was to be a hugely successful run as CEO of Nike. At a conference that year, he described receiving a congratulatory call from the legendary Steve Jobs. Parker asked for advice. At first, Jobs resisted, saying he was just calling to offer his congratulations. Parker pushed, and Jobs relented.
“‘Nike makes some of the best products in the world,’” Parker recalled Jobs telling him. “‘Products that you lust after. Absolutely beautiful, stunning products. But you also make a lot of crap. Just get rid of the crappy stuff and focus on the good stuff.’”
“I expected a little pause and a laugh,” Parker told his audience. “There was a pause but no laugh. He was absolutely right.”
The mythology of Steve Jobs centers on ‘Jobs the Creator,’ who took Apple to new heights with the introduction of the iPod, iPhone, iPad and the App Store. We forget that what enabled this was ‘Jobs the Destroyer.’ When Jobs returned as Apple’s CEO in the late 1990s, his first act wasn’t to create new products and services: it was to winnow down Apple’s product portfolio to create capacity to innovate and grow.
Get rid of the crappy stuff and focus on the good stuff. It sounds so easy. But it can be painfully hard for a company to stop a project that has champions and supporters, and even harder for it to shed a part of the business that is part of
its heritage.
Take Intuit, which decided in 2015 to sell off its Quicken product. When Scott Cook co-founded the company in 1983, Quicken, which allows individuals to manage their finances, was the company. But things changed. As then-CEO Brad Smith explained in 2015: “It’s one of the most iconic brands out there, but it’s 2% of our revenue and the customer base hasn’t grown for 20 years. It is just an incredibly loyal customer base, and it solves an important problem for a small group of people, and we want to go out and solve big problems that aren’t getting solved well.”
Over the next eight years Intuit’s stock price grew by close to 30% a year. Letting go creates capacity to do new things.
Practice #3: Fail to succeed
In 2024, tennis legend Roger Federer addressed the graduating class of Dartmouth College. He told the class that, while he won 80% of the singles matches he played, he only won 54% of the points he played. Think about that. One of the greatest players of all time was barely better than a coin flip for any given point.
One key to success, Federer said, was learning to cope with near-constant failures. “The best in the world are not the best because they win every point,” he said. “It’s because they know they’ll lose, again and again, and have learned how to deal with it. You accept it. Cry it out if you need to, then force a smile. You move on. Be relentless. Adapt and grow.”
Think back to the Pampers story: the team failed. The story is not an exception. In 1985, Henry Mintzberg and James Waters framed the challenge elegantly with their Strategic Management Journal article, ‘Of Strategies, Deliberate and Emergent.’ A deliberate strategy, they wrote, involves studying, planning, and acting. Do careful analysis. Talk to experts. Build forecasts. Align key stakeholders. And then execute. This works, Mintzberg and Waters noted in an environment that is “perfectly predictable, totally benign, or under the full control of the organization.”
That’s not today’s world. Leaders today need to embrace an emergent strategy, which involves accepting that you can’t know the right strategy from day one. Test, learn and adjust. The approach is not undisciplined; it is just a different discipline. Do your homework, but focus less on the answers and more on the assumptions behind success. Find the most critical ones. Experiment. Learn how you are wrong. Adjust. Once the right strategy emerges, pounce on it, shut down the experimentation and execute.
It’s easy to connect emergent strategy to the mantra of “failing fast” – yet an important distinction applies. As Harvard’s Amy Edmondson notes, some failures are preventable; someone was sloppy, or didn’t do their homework. Such failures should be punished. The contrast is with when someone scientifically experiments to address uncertainties that couldn’t be addressed any other way. If they learn their hypothesis was wrong, we have to call it a failure, but it is an intelligent one that generates useful learning.
The upside of uncertainty
Historical research into innovation during tough times (summarized in my 2009 book The Silver Lining) produced two findings that remain relevant today. First, history shows that disruptive innovations thrive in challenging market conditions like the ones we face today. In the early days of the Covid-19 pandemic, I said that research suggested watching Box, DoorDash, Grab, NuBank, Palantir, and Square. Today, those companies are worth close to $500 billion. Second, the upside to tough times is that scarcity forces leaders to follow practices that they should have been following already. Integrating the past, present and future. Making smart choices to prune the portfolio. Running smart strategic experiments.
Good things to do in stable times; indispensable in uncertain times. As they say, never waste a good crisis.
