Chris Bradley, Martin Hirt, Sven Smit

At some level, it is easy for the CEO to deal with uncertainty by playing the portfolio game of spreading investment like peanut butter around numerous businesses, knowing that not every bet has to pay off for the total plan to work. The problem is that a portfolio game on the corporate level becomes a matter of all-in commitment for an individual-business-unit leader. We have all heard the saying, “You are your numbers.” The saying isn’t, “Well, that project only had a 50 percent chance of success, so I won’t hold failure against you until you’ve had another similar failure or two.”

Assessing the reasons for a given outcome isn’t always easy. We may not be able to tell if a poor result was a noble failure, just as we can’t tell if the great result was blind luck. Was it a case of best efforts on a good bet that were foiled by a bad roll of the dice? Was it a more pernicious failure of planning or execution? Was it, perhaps, just a bad strategy to start with? Uncertainty doesn’t only mean we can’t see around the next corner; uncertainty also invades the past.