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In the video below, we speak with Roger Martin, strategy expert and dean of the Rotman School of Management at the University of Toronto. We discuss why CEOs should stop using uncertainty as an excuse, and the best way for companies and investors to conquer uncertainty.
A transcript follows the video.
The full interview with Roger Martin can be seen here, in which we discuss a number of topics including Bill Ackman, innovation, corporate responsibility, executive compensation, and how to pick out great companies. Martin is the coauthor of "Playing to Win", a new book focusing on strategy written with former Procter & Gamble CEO A.G. Lafley.
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Brendan Byrnes: Warren Buffett in his recent letter to shareholders of Berkshire Hathaway said that CEOs should stop complaining about uncertainty. He said, "Things have been uncertain since 1776."
He might have stolen this idea from you, though, because you had a blog post where you talked about the "uncertainty excuse." What is the uncertainty excuse, and how can CEOs best deal with uncertainty?
Roger Martin: It would be lovely of Warren did steal something from me. He's been very nice to me in the past.
Yeah, the uncertainty excuse is exactly what Warren is talking about, which is that companies say, "Well, things are too uncertain for us to make strategic choices, so we're just going to bob along and see what happens until such time as we've overcome this problem with uncertainty. Then we'll make choices."
What I like about Warren Buffett's thoughts there is, "Yeah, maybe in another couple hundred years it'll be less uncertain." "Oh, no. In America it's as uncertain as it was back then."
That's the problem. The uncertainty excuse is the way that executive CEOs convince themselves that they're doing the right thing by not making choices.
No, I think what you have to do is face up to uncertainty, recognize that there will always be uncertainty, that strategy is not ever about perfection, it's about shortening your odds and you've just got to make choices.
You've got to watch after you've made the choice and say, "Did it work out the way we thought? If not, what can we do to adjust that choice?" But you've got to make choices and not use uncertainty as an excuse not to make choices or, as Buffett said, not to invest.