We live in a world where the one true constant is uncertainty. People like to joke about death and taxes being the only certainties in life, but the real truth embedded in that quip is that everything else in life is uncertain. Somehow, that’s not so funny. This is because we crave certainty and our brains are always striving to create it for us. They use our experiences to build models of how the world works to predict what will happen. When you evolve in a hostile and unpredictable world, anticipating danger – and thus avoiding it – becomes a key survival strategy. For the most part, our world has become far less hostile and far more predictable; getting food is easier than it has ever been. But our lives have also become more complex, especially around finances. And our brains, which haven’t changed, are always trying to create certainty around the future.
As financial professionals we try and meet this need for certainty and, while this goal is admirable, it carries with it certain risks. The search for solutions leads to the concept of there being a ‘right solution’ that exists and that we just need to find it. But, in an uncertain world, certainty can only be achieved momentarily and/or by having a really narrow focus. A cash ISA gives me certainty around return of principal and interest, but it doesn’t build wealth or protect me against inflation.
Another problem with the search for certainty is that it can lead to a narrowing of the process of developing understanding. There is a temptation to understand just enough to craft the solution. This desire to do this is also driven by commercial considerations (usually time), as well as a desire on behalf of the financial practitioner to stick to the (safe and predictable) process. The urge to create certainty comes from all sides, not just clients. But the more we understand too quickly, the more likely we are to find ourselves in a position of ‘premature’ certainty. We’ve all come away from meetings and found ourselves thinking of questions that we wished we had asked.
So, if the desire for certainty can lead to short-term, inflexible solutions based on incomplete understanding, but we are all hard-wired to look for certainty, what do we do?
The desire for certainty is driven by a need to feel safe, and prediction is just a tool for making us feel safe. We feel safer when we are in control of our environment because it means that outcomes are predictable. But this creates a fundamental tension, because we live in an uncertain world. So, if trying to create a predictable future – what might be termed safe certainty – is not always the answer, we need to address the underlying problem by finding a better way of making people feel safe.
This leads us to the concept of safe uncertainty. Safe uncertainty doesn’t see the future as a set of problems that need analysis and elimination of uncertainty to solve. Instead, the future is a world of dilemmas that demand patience, flexibility and an engagement with uncertainty. In financial services this concept can be summed up as ‘I can’t tell you what will happen, but I can make sure you are safe’. And most practitioners would say that’s what they strive for. Where we mostly fall down is that we don’t take the time to explore what clients really need. We have fixed ideas about what works, or what they might need, and we ‘understand too quickly’. As financial professionals we attracted to the certainty that numbers provide, and we use numbers and processes to maintain our own ‘safe certainty’ in order to create it for our clients.
Safe uncertainty requires us to suspend our own certainty, put aside our solutions temporarily, and engage in a process of open dialogue with our clients that explores why and how they think about money. Their patterns, behaviours and emotions around money drive how they spend, save and invest. This process is not comfortable for a lot of financial professionals, though clients are usually quite open to it. Numbers don’t tell you how a client got to where they are and how they will move forward. So, numbers are not enough – you need to look at the human side. The paradox here is that we need to embrace uncertainty about what we think we know in order to create safe uncertainty for our clients.
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If you want to explore safe uncertainty, you can read the original paper from Barry Mason here.