Speaker 1: I have a good news and a bad news for you. The bad news is you cannot really do it because the future is inherently uncertain. But the good news is that it's always up to you. It is always your choice, just like the mirror that you see in this red box, yes. What you see here is a lot of smart logos when you do the Google search. When you try to implement this kind of search, you see how many different organizations are trying to be smart nowadays. It's all our human civilization which was trying to prevent our uncertainty. It was the technology, it was the law, it was the religion. These are the political structures that are trying to help us to avoid all kinds of uncertainty. Nowadays what we are facing, we are facing a lot of smart systems, a lot of smart technologies which are again trying to minimize our choices to make us more productive. The whole environment here is about being smart technologies, like smartphones, the self-driving cars, even our smart home which seems to be connected by our microwave to the TV, to the computer, to the fridge. And sometimes, as you can see in my example, all these systems sometimes fail just because our cognitive capacity is not really sufficient for dealing with these smart technologies. We have our attention span that is failing us. The attention span that is shorter than that of the goldfish. We are behaving in very strange ways. What happens, you see here, it's maybe a karma that we have an intel inside and we have an kind of idiot outside. Where does all this sort of uncertainty come from? It comes from two major sources. One source is the very fast space of change. And there is a lot of novelty that is emerging due to this fast change. The other source of uncertainty is all the complexity that surrounds us. We have so many elements, so many variables in our systems. And what's even worse, we have the connections between these different elements, which produce a new quality, a bit like chemical reaction, that we cannot really predict or really control. I mean, it goes way beyond the technology. You see all these strange guys with the strange haircuts nowadays in the politics, and you never know how these things connect in their heads sometimes. We have tsunamis, we have tornadoes that we can also not really fully predict. We cannot evacuate people at the right times. As well as we cannot predict the full effects of artificial intelligence that is going to change at least 80% of all our jobs. And it's not quite sure how we'll live in this kind of getaka or Blade Runner world that is coming to us. Are we really ready for that? So I have chosen this kind of symbol of this tree that is seeing the ground collapsing under its own roots. And the question is, how do we make the decisions? How do we choose the best strategies in the environment where the ground seems collapsing under our own feet? You know, I represent academia. And in a way, I am standing on the shoulder of many giants. Some of these giants are Nobel Prize winners. Some are very much against the Nobel Prize. They say they kill people's creativity and they pride you with a false status. And these people are coming from risk analysis, from investment, from entrepreneurship, from psychology, from behavioral economics, from IT systems like Agile software development. So there are lots of intelligent people seeking the solutions for uncertainty management. Let me start with one, I think, of the key observations. How do we behave under uncertain environments? One of the key messages to take from here is that the mental model, the kind of mentality which helps you in a stable system, it kills you in the system where, in the environment where the ground is collapsing under your feet. And the famous folk wisdom is saying that it is the most skilled swimmers that drown. Why is that? I mean, can you believe, why is that? You are so skilled. You know how to swim very well. How come? If something changes in their environment, they are still trusting their instincts. They are trusting the competence that they have got during that very long time of practice. What happens quite often in the sea is that they get stuck in the current which is taking them away from the shore. There is a wave which is coming to the shore and the channel which is taking them back. If you are a very good swimmer, your first instinct is to fight the current that is taking you away from the shore. Whereas a much smarter strategy, if we say so, would be to swim along the shore, some hundred meters, and to get the wave that is taking you back to the shore. How do you use the energy in the environment that you are apparently fighting against? I think one of the most smart ways to behave in uncertain situations is to find out the rules of the game as quickly as it is possible. Know the environment you are dealing with. And these are two highly intelligent people and probably the richest investors in the world, Warren Buffett and Charlie Munger, who have pronounced a very intelligent phrase. We became so rich not because of being super brilliant, super smart. Just because we are avoiding mistakes on a consistent basis. So they said what you do not know makes much greater difference than what you think you know. And that's this risk of the red box that you are trying to unbox here. Because when we create a false illusion of the future, that we try to pretend that we know the future, we get into the confirmation bias, which means that we deselect all the information that does not confirm our illusion of the future. So for most of the people who are making these smart investment decisions, they are trying to escape this illusion of future as much as it is possible. The illusionary certainty. And there is quite sound research which was carried out about tennis. That people who are amateurs in tennis, those people prevail who commit less mistakes. Not the ones who are more professional in playing tennis. Because they are all amateurs by nature. But if you commit less mistakes, you can see these two politicians who have committed, at least one has committed a mistake that we are now kind of in a mess of dealing with. Because he felt a bit too professional in the uncertain environment that he was dealing with. So recognizing your circle of competence is of key importance. We are often standing on this kind of cliff of knowledge. And the difference between genius and insanity is in this very same jump. Because we stand on this cliff of not knowing. You can imagine this first person who was jumping into the unknown. He must have been quite crazy on one hand. On the other hand, I think he was trusting science maybe a bit too much. Which is in a way the same thing, to be crazy and to trust science too much. But he survived with this wingsuit. We very often talk about uncertainty in the context of innovation. And I really think there is a kind of paradox between innovation and uncertainty. On one hand, no innovative idea, nothing creative happens if we are stuck in these very strict boundaries. If we do not tolerate uncertain situations. You can see this performance which was happening just before your eyes a few hours ago. This situation was about the boundaries which we put against each other. However, the innovation creates a huge uncertainty. There is an instinct, just like Oscar said. There is our instinct to put certain boundaries. We feel very much uncertain and insecure about these kind of situations. And all our history shows that. Innovation ecosystems, that's a kind of buzzword that we are all now using of us. Especially the governments are using the innovation ecosystem buzzword. However, the funny thing is, building an ecosystem is not a rocket science. It is much, much more complex and much more difficult. Why is that? I want to show you just these three analogies. There are three different levels of system by its complexity. One is simple system. It's like baking a cake. Do you know what that means to bake a cake? You have a recipe, you get some ingredients, some flour, some other materials. And you bake a cake, you fail at the first time. Then you can replicate this solution over and over again. So simplicity, it's easy to achieve the final result that you want. Building a rocket space and launching it into the space, what does that mean? Like Tesla is doing with SpaceX. It's a very complicated task. But by its nature, it's very similar to baking a cake, whether you like it or not. It has many more ingredients. It has many more formulas. But what is common with a cake? That you can still practice. There is a clear causal effect between cause and effect. You can always practice and you can learn from mistakes. You can launch that rocket further on into the space. What is the most complex task? It is raising your child. Because why is that? Because there is no such thing as ideal child. There is no ideal result in this kind of system. You always start from scratch. There are many events that can happen that can change the destiny. They can change many things. There are many chemical reactions, let's call it, that can happen. And you have to always deal on a situational basis. So as we are talking about complexity management, we are always talking about many different variables and managing some kind of chaos that is surrounding us. The things that work in a complicated system, they fail us in the complex system. And one more analogy I would like to make is building a park is a much easier task than building a jungle. Jungle is an ecosystem. Park, it can look very nice. But park is only alive for as long as we take care of this park. We always have to water it to take care of the trees. We want to build a self-sustaining system like a jungle. We have to focus not only on the single elements like the trees. What do we have to focus? We have to focus on the whole environment and on the whole ecosystem, on the whole relations in this environment. So very often what happens, these people, especially with sometimes engineering mentality, they create a lot of side effects to the system. They try to solve one minor thing and there are many major more problems that are being created in the system by creating this pipe. We all know this kind of example. It's not about engineering, no, not at all. It's more about people who are very competent in one field who cannot really apply their competence to a wider context. Because people who are meant to protect the cultural heritage by cutting down the trees from the hill to make the heritage visible almost started the initiative that launched the destruction of the very heritage. It's a very ironic picture in a way, which shows us one thing, that sometimes the goals that we want to achieve in life, in our careers, in our organizations, they start working against us if we are not understanding the complexity of the environment in which we are making these sort of decisions. And when we want to build a Silicon Valley, almost every country nowadays is building the Silicon Valley, one of these questions is, okay, you just dig it up. You try to build some excavators to the flat land. It's just a metaphor and you dig this valley. A very important thing is, as I told you, to focus not so much on the elements, but on building the relations in the system. And one of the previous speakers who was talking about trust, one of the key things is really how do you build trust? How do you make this trust work? We have carried out the research, a very global research in all countries of the world, most of them, by asking the network facilitators, how do you get the trust work in your business networks? And the questions which were posed to the people from Northwestern Europe, like Scandinavia, like UK, like the Netherlands, the answer was, okay, you just get these people into one room, get them to communicate with each other. If they have some common business, they will talk to each other and they will build trust. Okay, but it's not so very easy in the Southern Europe, in Spain, Italy, France, Spain. They said, okay, you can get them into one room. But after a while, they will have some differences in power. There will be some bigger, some smaller partner. What you need here, you need to get some institutional involvement. If you want to have the trust working, it's not only about building a tribe, as they said. It's more about getting institutional involvement. Now we come to Lithuania, to many Central European countries. The main logic was in the answer. You get some big partner who has a very strong cooperative culture, like bring some IKEA from Scandinavia who can build the trust network relations for us. So get us some strong partner with a good practice approach. Okay, one more feasible approach. So we can see that all these different environments we have to operate in. It's always a question of balance between regulation and self-regulation in the system. Because we have to connect these two different elements of stability and change. And most of the systems which are involved in the uncertainty management, they are good at both things at the same time. It's not being only one or the other. In this case, I mean, I was living in Switzerland for a while, I was working in Switzerland. I was quite amazed by this country, which was not fitting into one strict frame of rules. On one hand, it was very conservative. On the other hand, it was extremely innovative. On one hand, it's a very visionary people they have. But Switzerland as a system, it has no big political ideas. There are no big ideas that can kill many things. Like there is a phrase that Stalin was never born in municipality. You know, Switzerland is extremely good with municipal structures. It's very decentralized. And the funny thing, it is profiting from almost every external shock that is happening in the world. Switzerland was the winner in almost every war that came from our environment. Especially, okay, that's very uncertain, yes? That's a person, Luke Eakins, who has jumped from the plane without a parachute last year or a few years before. I mean, imagine jumping without a parachute from the sky. That's a kind of extreme risk-taking. But many of the non-failed entrepreneurs, they didn't fail like this. Luke Eakins is still alive and kicking. And why is that? Simply because he had a very good safety net for landing. You know, this extremely big safety net for getting without a parachute into. When we create some very innovative ecosystems, we have to think about what security do we provide to some people. And there is a myth in Silicon Valley that everyone is taking risk there. It is not really so. Because they have extremely good safety nets in the Silicon Valley. They will be employed by the Silicon Valley companies even if they fail in one project or the other. And in Scandinavia, there are many people taking risks because they have very good social security network. So we should not simplify this risk-taking as the absolute measure. It's from entrepreneurship, one idea I wanted to remember. Do you have a cross or do you have a sword in your life? The question is, it's not about how much can you gain. It's how much can you afford to lose in your life when you're making a certain decision. And many of the most successful entrepreneurs are thinking on the negative side. How much can I really, really afford to lose? And one more important thing, do I have enough options in life? How do I develop my optionality, some extra competencies if the environment changes? How do I not become this T-Rex that is extinct after one comet strike? You see these two creatures. Which one has more optionality in a certain environment? I believe the small guy on the left. He is a kind of specialist generalist. Yes, we have even a category of expert generalist. We have to be both sometimes. And the ironic thing about our current management that sometimes we optimize the systems too much. And this smart, the smartness that we have in the system, the smart technologies, the smart systems that we establish in the environment, when they fail, they fail big. So sometimes they can be a medicine, but at the same time, they can also be a poison. It always depends on the context very much. The last slide to finish my presentation. I think it's very symbolic to be here in TEDx with this extremely complex set of ideas, which is extremely hard to swallow, especially after lunch. And that's a human nature to really admire the complexity. I mean, as we all admire the complex ideas right here. But at the same time, we have systems which reward simplicity. So you want one message to rule them all, all the time. And that's what most businesses pay money for, unfortunately, sometimes, or maybe luckily. So I wish you all the best in your future endeavors and to make life as simple as possible. Good luck to you. Thank you.