Navigating uncertainty with narratives: strategic business adaptation in a shifting global landscape
By Lorenzo Bona
Many debates today seem to center on whether or not we are experiencing a process of deglobalization, suggesting that we are living through a time of profound geopolitical disruption: a socio-economic phase that is reshaping the contours of globalization.
In this context, some of the more convincing responses appear to reflect the idea that what we are witnessing may not be a withdrawal from global integration, but rather a reconfiguration of it – largely driven by ongoing trade tensions and geopolitical rivalries.
In trying to make sense of this shifting landscape, the concept of uncertainty is frequently invoked, often alongside the observation that we may now be experiencing record-high levels of it.
Exploring the Concept of Uncertainty and the Power of Narratives
Economists John Kay and Mervyn King, in their book entitled Radical Uncertainty, provide a helpful distinction on the concept: uncertainty is not simply about unknown future outcomes, but about having insufficient knowledge of past, present, or future conditions.
In some cases, as emphasized by Kay and King, uncertainty can be reduced: for example, by researching historical data, reading books, or accessing knowledge online. In other cases, they describe situations similar to games of chance, where outcomes can be predicted probabilistically, like the flip of a coin.
But they also call attention to circumstances in which no fully meaningful probabilities can be assigned to the emergence or the evolution of a situation: for instance, events like the COVID-19 pandemic in its early stages, at the time, or persistent geopolitical conflicts, such as those in the Middle East. These would be examples of radical uncertainty, where the future is not only unknown but unknowable in conventional terms.
Under such conditions, the temptation is frequently to seek perfect knowledge. But this is often an illusion, and it may be wiser – as the two economists suggest – to work with real-world, though imperfect, knowledge rather than rely on a false sense of certainty.
To cope with radical uncertainty, Kay and King recall that humans have historically turned to narratives. Drawing from history and anthropology, they observe that human progress has often been rooted in the ability to create, share, and refine stories: in other words, develop narratives that make sense of complexity and support coordinated responses to the unknown.
This ability to tell stories is not just about communication; it’s a form of pragmatism. In essence, the possibility of sharing and comparing competing stories about their experiences could be seen as a sort of mechanism that helps individuals select and converge on narratives that would enable people, organizations, and societies to discover “good-enough” solutions – and, through them, move forward in uncertain conditions rather than be paralyzed by indecision.
Proactive Leadership and Strategic Adaptation in a Globalized World
Building on the lines of reasoning of the two recalled economists, it could perhaps be added that in today’s context of global transformation, businesses cannot afford a passive, “wait-and-see” stance. Leadership must shift toward proactive, initiative-driven approaches – not impulsive or marked by poor self-control, but alert to opportunities that others might overlook.
It could be that more than ever, firms need to develop or implement strategies to go global, connect with new markets, and be sensitive to the shifting cultural, economic, and political narratives that influence consumer behavior, regulatory trends, and technological standards.
By entering or expanding their presence internationally, companies can not only interpret these narratives more effectively but also help shape them – thereby strengthening their strategic foresight and presence across diverse markets.
From this perspective, rather than striving for immediate optimal decisions in contexts that may appear to reflect situations of radical uncertainty, companies should focus on incremental choices that build resilience, preserve competitiveness, and foster long-term adaptability – both at a local scale and at levels better aligned with broader global socio-economic trends.
As Kay and King seem to emphasize, it is usually in moments of extraordinary uncertainty that the spirit of entrepreneurship tends to emerge as an inseparable and innovative force.