Every morning I scan through the Wall Street Journal and there is always a simple explanation for why the stock market did what it did the prior day. Over several years of looking at these explanations I have come to a simple conclusion: they just make this stuff up. On Wednesday of last week, we learned that the market went down on Tuesday due to “instability in Mr. Trump’s plans for the economy.” At first blush this seems plausible, but if you think about it, did it really take the collective wisdom of the world’s investment community until the middle of January to come to the shocking conclusion that Mr. Trump and stability are two words that do not go together. Last year, in one week China’s currency policy was blamed for a market loss and the same policy was credited for a market gain two days later. You could scour the paper and not find anything that indicated that the policy changed.
This is not unique to the financial press or the finance world; look at the talking heads on cable during the election. This is a symptom of a larger social issue that I admit I am far from immune. We do not want to say or hear those most frightening three words: "I don’t know." As a lawyer, I rarely said “I don’t know.” Rather I would say “this requires more research;” hiding my ignorance behind a billing opportunity. People do not want to hear “I don’t know” from their doctors, financial advisors, accountants, consultants, CFOs, weathermen, political leaders, scientists, etc. Saying “I don’t know” is sometimes an admission of pure ignorance, but it also often an acknowledgement of the complexity of the situation we find ourselves in. There are so many factors that could affect the result that it is impossible to truly isolate a single cause or mechanism.
No doubt that Mr. Trump’s tweets had some effect on the stock market, but so did a mind boggling number of factors from economic conditions, individual moods, rumors, the weather, or anything else that moves someone or something to engage in a stock trade on that day. “I don’t know” takes off the veneer that we somehow can reduce a complex situation down to a simple cause and effect equation. Look at all the unintended consequences that result from decisions that we make, big or small. In hindsight, it all looks clear and we cannot believe that decision maker could be so foolish. In my experience, however, decisions are made in complete ignorance of the adverse consequences or with a gross underestimation of the nature of magnitude of these consequences. We do not see the complexity and uncertainty because we do not want to. We do not want to say “I don’t know.”
In reality, the world, our businesses, our families, and our psyches are all complex entities that change, evolve and react to an almost infinite number of factors. The challenge we face is to accept this reality. We must start by looking at every situation from the perspective of “I don’t know” (the Buddha called this “beginners mind”). Burdened by our desire to achieve a specific result and the accompanying assumptions required to make that possible, we see only what we want to see. Every situation, however, can be viewed as multifaceted diamond which changes shape and color as we shift perspective from side to side. From the perspective of “I don’t know”, there is no real choice but to look at the situation from as many perspectives as you have the time to, welcoming the complexity and ambiguity as both challenging and beautiful.
Complexity, in the form of the way one thing effects another and so on, is awe inspiring and humbling. In the end, we are inevitably left with the conclusion that we must choose what we believe to be the best choice that we can conceive of in the time we have, with the consciousness that there is a significant possibility that we may be have selected another option if we knew more. Realizing that ultimately we do not know can make us more forgiving of our ourselves and others and, hopefully, more open to changing course if it turns out we realize that there may be another way. From this perspective searching for understanding of what was missed is more important than assigning blame.
This leaves a question. If most decisions are complex and ambiguous and outcomes are unknown, what is the point of planning? After all, there are sure a lot of people, like me, helping companies and families with planning. In my opinion, there are two aspects to planning. The first is to find what is immutable: those core values that define who we or our organizations really are. Put simply, these are the principles that we would not compromise to achieve a particular result. These core values vary from individual to individual and organization to organization. Second, there is our mission and vision, these are our best guess of what we can accomplish based on what we currently know and project for the future. This is the land of “I don’t know.” This is a picture of the future that gives us our current bearings, realizing that we will encounter unexpected circumstances that will require improvisation and modification. In the end, planning must be an ongoing process of acquiring information and experience and recalculating. The danger of planning is if we become too attached to our vision. This can cause us to miss new information or to make plans that are too inflexible to accommodate new circumstances.
In all we do if we know who we are (i.e., what are our core values), we can approach the future with freedom to not know the how, when, what, or why of everything that comes our way. We then can move forward with appropriate confidence and humility, knowing that it is much easier to surf on top of the waves than to try and swim against them.