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Uncertainty: Revisited

A year and a half ago, I wrote about uncertainty and the need to embrace it to drive your business forward. I introduced you to the World Uncertainty Index and I thought it would be interesting to see where the index is today as we emerge from the pandemic and enter this new phase of global unrest and hostility. While doing my research, I investigated why this matters to the O&P profession. 

Nicolas Bloom is an economist at Stanford and is a developer of the “World Uncertainty Index,” which was created for the International Monetary Fund (IMF). Compared to the last time I wrote about it, the degree of uncertainty has diminished significantly. Up through the 4th quarter of 2021, the data was showing a fairly steady decrease in uncertainty. New data shows that there was a significant uptick in the index during the first quarter of 2022. It is not as high as it was in October 2021 when I wrote about it, but, there was interesting data in the movement of the numbers. 

The National Bureau of Economic Research says that “innovations” in the Index “foreshadow significant declines in output” (Ahir, 2022). What this means is that given the rapid increase in uncertainty documented in the index in Q1 2022, we can expect economic activity to decrease. And what that means is that supplies will be further limited, supply chain problems will continue to arise or even be exacerbated, costs will continue to rise, and the economic recovery will be further delayed. 

In our profession, we seem to be constantly dealing with change. The good news is that at least we have a good idea of what the next big change is…more of the same! This means your business strategy is more important than ever. Things are going to get tougher before they get better. Here at OPIE, we know that data-informed decision-making

is critically important to your business’ success. We do it all the time with our patients, but we trust our guts regarding the operation of our business. Please don’t rely solely on this! Watch your data, look for trends, and make your decisions based on what your data shows! 

But also, don’t fall into the trap of thinking that with just a little more information or just a little more time, you can make a more informed decision; that just leads to paralysis. The line to tow is thin, but that’s what we’re here for at OPIE. If you want to learn more about how to do this, join us for our educational events! Look at our Events Calendar here. 

Keep in mind that your business is always facing uncertainty. You are paid to have a long-term view and think strategically. Assume the worst and have a plan. If nothing bad happens, then you are that much better off. But if something does happen, you have a contingency in place and will be able to respond to it because you have already thought about how the constant force of change might impact your business. 

Don’t hide from the uncertainty monster. Embrace it and drive your business forward through it. 

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