How to deal with uncertainty when designing new products and businesses
Why making a small move into the wrong direction is better than not making any move at all
I wrote the first draft of this story during a short visit to Stanford University. I was on my way back from UC Davis, where I attended the entrepreneurship academy, and had a few hours to kill before my flight to Sydney.
I am editing this story sitting at my recently set-up home office desk. A rainy winter’s day in Sydney. Another summer in California and it is not clear what the new term at Stanford University will bring for students and staff this year. Like other U.S. universities, Stanford is working on contingency plans as COVID-19 cases surge.
The pandemic has brought uncertainty of unpredecented scale to all of our lives. Indeed, we are likely experiencing the most uncertain times of our generation’s lifetime.
Revisiting the draft I had written on that late summer’s day at Stanford, it seems that the value of understanding how to deal with uncertainty is greater than ever before.
Let me take us back to the entrepreneurship academy at UC Davis. The program is specifically designed for PhD researchers and academics to learn about taking a product from idea to market.
The program is led by Andrew Hargadon (Professor of Technology Management and Faculty Director for the UC Davis Institute for Innovation and Entrepreneurship) and Joe DiNunzio (Assistant Professor in Innovation and Entrepreneurship and Interim Executive Director for the UC Davis Institute for Innovation and Entrepreneurship).
The program covers aspects of innovation and entrepreneurship, from problem identification and customer segmentation to market validation, ideation and prototyping.
But the key takeaway for me was a concrete, tested approach for dealing with uncertainty in an innovation process.
Uncertainty in design
I often explain in my lectures to students at the University of Sydney and in my public talks, that one of the great benefits of adopting design as a way of thinking is that it equips us with the skills and mindset to deal with uncertainty.
Design problems are usually ill-defined and it is not immediately clear how to arrive at a solution.
Having experience in how to deal with this uncertainty—and being able to pull methods out of your back pocket to make a move despite this uncertainty—is one of the reasons why design thinking has become popular across disciplines. As has been said, design thinking is about embracing uncertainty.
But the entrepreneurship academy at UC Davis made this much more concrete by offering a simple but effective approach for addressing uncertainty when creating a new product or business.
Here is a quick recap of how the facilitators explained risk and uncertainty, supplemented by my own reflections through the lens of design research.
Risk versus uncertainty
One of the reasons that we face risk and uncertainty when developing innovative products or businesses is that there is no established model for innovation. There are plenty of methods, but their applicability and implementation heavily depend on the particular context.
The lack of established models that work in any situation creates risks (for example, the risk of not finding a solution that works or that is feasible) as well as uncertainties (for example, whether the process will lead to an innovative idea or whether the product will be successful in the market).
When we face risk, our brain responds by sending fight-or-flight signals to the body. Which poses a challenge, but it also provides us with two options to instinctively choose from, to fight (try harder) or to choose flight (give up and walk away).
In the face of uncertainty, however, the instinctive reaction is to completely freeze.
The facilitators used an example from nature to illustrate this during the academy. If a deer sees a shadow, it knows from experience that this possibly represents a predator circling above them and it will take flight. However, if a deer is blinded by the light beams of an approaching vehicle on an otherwise dark road — a phenomenon that its brain isn’t wired to be able to interpret — the uncertainty of what these lights may mean causes the deer to completely freeze.
The problem with uncertainty
To freeze, coming to a complete halt, means that there is no progress. This is bad because making a small move into the wrong direction is better than not making a move at all.
I use the following diagram to emphasise that getting lost is actually an important part in a design process. Getting lost allows us to learn new things, for example, we might learn that a particular idea or approach doesn’t work. As we backtrack and try out another direction, we can use these insights to inform the next iteration.
Why we need to deal with uncertainty
If we find ourselves in a situation where we face uncertainty and stop moving, we never get to the next iteration. Without iteration, there is no innovation.
In other words, “innovation is commitment in the face of uncertainty” as Andrew Hargadon put it.
So how can we address uncertainty in a design process?
Here is the insight from the entrepreneurship academy at UC Davis:
It is not possible to eliminate uncertainty. But we can reduce uncertainties (plural, as there are many in a design process) by first of all identifying them and then resolving them “quickly and cheaply through experiments” one by one.
This bodes nicely with the concept of iteration in design: We resolve a particular element that we have identified as an uncertainty, then reflect on what we have learned and move into the next iteration to address the next element.
But it also sheds new light on Bill Gaver’s diagram to explain the difference between science-based and design-based research.
Using experiments to eliminate uncertainties in a design process creates a link between these two approaches. We can imagine this as a nested approach, with multiple quick and small experiments going on inside each of the stages in the design process.
Formulating hypotheses allows us to identify the uncertainties that might occur before testing them through experiments.
Once all those uncertainties are resolved, we can move into the next design iteration.
Each iteration starts with identifying potential uncertainties that then trigger the next series of experiments.
As Thomas Edison allegedly said:
“Success depends on how many experiments you can fit into 24 hours.”
The quicker we can complete experiments in an innovation process, the quicker we can resolve potential uncertainties.
Using uncertainty to imagine and project the future
While this is specific advice for new product and business development, the same principles can be used for dealing with uncertainty in all parts of our lives.
If we are able to identify all the uncertainties we are facing, we can then evaluate and deal with them one by one.
It might not be possible to systematically evaluate each uncertainty through experiments, but combined with imagining and projecting the future it can help us to better cope with uncertainties.
In other words, we can flip the perspective and look at uncertainties as opportunities for generating new ways of thinking and for doing things differently.
Postscript
The facilitators of the UC Davis entrepreneurship academy, Andrew Hargadon and Joe DiNunzio have extensive experience in working on and with startups and their diverse backgrounds bring a nice balance of engineering and marketing perspectives to the program. I highly recommend attending their program if you are in the area. The next academy is scheduled to take place 6–8 October 2020.
What’s next? I attended the program to explore how we could offer similar short-term programs through the Innovation Hub at the University of Sydney, in addition to interdisciplinary programs that are already available at the university, like Inventing the Future, INCUBATE and Genesis.
We are particularly interested in providing PhD researchers an opportunity to learn about turning their research into applications.
Interested to learn more about design and innovation? Take a look at our free online course about using human-centred design methods in an innovation process (available via Coursera).
