Tag: uncertainty

decision making, Economy and society, uncertainty

Profit? Superprofit? TotalEnergies and the Forgotten Lessons of Economists Knight and Demsetz

In these times of soaring energy prices, the profits of companies in the sector are causing controversy. This is particularly true for TotalEnergies. Every time it releases its earnings, the same scenario plays out. Profits are labeled “superprofits,” the term circulates unquestioned, and the conclusion is self-evident: they must be taxed. The reasoning seems obvious. Yet it rests on a questionable understanding of what profit is, economically speaking. Two little-known economists, Frank Knight in 1921 and Harold Demsetz in 1973, offered explanations that deserve to be revisited in light of the current debate.

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strategy

The real lesson from Ukraine: in uncertainty, strategy is a matter of models.

Sticking to an outdated worldview is a universal risk, especially in times of rapid change, and one of the most dangerous. The war in Ukraine is a striking example of this. In just a few years, the battlefield has undergone a complete reinvention: drones are ubiquitous, information is available in real time, and responses occur within minutes. Military certainties that had been solid for decades became obsolete overnight. In a rapidly and unpredictably changing world, the ability to question one’s models is not just a competitive advantage; it’s a matter of survival. This places new demands on strategic thinking for military staff and organizations alike.

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decision making, Strategic surprise

Resolving uncertainty with AI, or the scientist illusion of management

“With AI, it’s now easier to resolve uncertainty,” a business leader recently told me with confidence, arguing that with the mass of data now available and the almost infinite capacity to analyze it, the subject was more or less closed. This is a widespread, long-held belief… and a very false one at that, a scientistic illusion of management that refuses to die. The link between data and uncertainty is much more complex. Without a thorough understanding of this link, decision-making in uncertainty is based on flawed models, with catastrophic consequences.

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decision making, entrepreneurship, uncertainty

To reduce uncertainty, try cooperation!

How can uncertainty be reduced? This is the question that is preoccupying all executive committees in France and the rest of the world in these troubled times. The most obvious temptation is to mobilize the arsenal of predictive thinking: foresight, scenarios, modeling, customer surveys, and nowadays, of course, AI. However, uncertainty is not resolved through forecasting, but through action. And in this regard, the most powerful action is cooperation. One blind person holding the hand of another blind person? Not necessarily: cooperation means that we no longer need to predict in order to act creatively and move forward without being paralyzed.

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decision making, Uncategorized

The Power of Vertigo: Thinking Clearly in the Face of Uncertainty

With the inauguration of Donald Trump as President of the United States on January 20, we are entering a period of radical uncertainty even greater than we’ve experienced in recent years. We thought we lived in an uncertain world? We haven’t seen anything yet. Accepting this uncertainty means accepting a kind of vertigo, a sense of a world out of balance. For the philosopher André Glucksmann, accepting the vertigo of renouncing certainties is a source of strength. Vertigo is a form of liberation that allows us to think clearly and is a lever for creativity and transformation. But there’s no guarantee that we’ll have this power.

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decision making, Management, strategy, uncertainty

Singularity, the ultimate resource in the face of adversity

In times of turmoil and pervasive uncertainty, our instinct is to play it safe. We often retreat, conform to successful norms, and dampen our uniqueness to avoid risks. However, a compelling chapter from Apple’s 1997 turnaround tells a different story: embracing and asserting our distinctiveness might just be the secret to thriving amidst adversity.

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