ilm - ambiguity

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LeadingthroughAmbiguitybyDavidAdkinsMakingdecisionsandthrivingwithoutalltheinformation.

Introduction Ambiguity is increasing in our ever-changing World. The pace of change is exponential and although we have more resources at our fingertips, there is less confidence in the information and fewer tangible rocks to hold on to in our ethically changing society. Leaders in have to make decisions without all the knowledge, and to stay ahead of competition decisions need to be made faster and with more conviction than ever. Ambiguity drives the need for good leadership (Williams, 2013) as intuitively, the less defined, ambiguous tasks naturally rise up organisations (Cook, n.d.). Indeed, where there is no uncertainty there is no need for leadership. Post the Cold War the US military began to describe the more Volatile, Uncertain, Complex and Ambiguous world using the VUCA model (Stiehm, 2010), since brought into business leadership training. Ambiguity is different to uncertainty, although they are commonly used interchangeably. Ambiguity being where little is known about the situation nor the potential effect of your actions, where uncertainty is where your knowledge of the situation is much higher, but the effect of your potential actions is still unpredictable (see Figure 1).

Definition of Ambiguity: ‘‘perceived insufficiency of information regarding a particular stimulus or decision context” (McLain, 1993)

Much research has been undertaken into leader’s tolerance for ambiguity, frequently finding an increased tolerance for ambiguity positively influences leadership performance (Herman, et al., 2010). Through further primary research undertaken with 124 respondents across all organisational levels, this paper looks to understand what affects tolerance for ambiguity, providing advice on how future leaders can improve in this vital skill and lead teams through Ambiguity using a five-step model.

Tolerance for Ambiguity (TA), being ‘the tendency to perceive ambiguous situations as desirable’’ (Budner, 1962)

Research has shown that knowing you are loved and having certainty in relationship drastically increases Human’s ability to cope with traumas. Jesus provides Christians with the deepest love and the most important relationship, creating certainty and giving Christians security in times of ambiguity. This paper showcases the results of primary research and provides a five stage model to deal with, and thrive in, ambiguity developed from the findings.

Independent Learning Module: “Leading through Ambiguity”

David Adkins, 27th June 2016

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Figure 1: “What VUCA Means for you”

Courtesy of Harvard Business Review (Bennett & Lemoine, 2014)



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Contents

Introduction..................................................................................................................................1

Contents........................................................................................................................................3

Figures...........................................................................................................................................3

Research:ToleranceofAmbiguity...............................................................................................4ImpactofAmbiguity...............................................................................................................................4ResearchFindings...................................................................................................................................4

Education...........................................................................................................................................5AgeandGender.................................................................................................................................6JobSector...........................................................................................................................................7LevelofSeniority................................................................................................................................8

5StepModelforAmbiguity.........................................................................................................9Step1:Discern.....................................................................................................................................10Step2:DecideStrategy........................................................................................................................12Step3:ConductExperiments...............................................................................................................13Step4:AssessandAdapt.....................................................................................................................14Step5:CelebrateDividends.................................................................................................................15RepeattheCycle..................................................................................................................................15

Conclusion...................................................................................................................................16

AppendixA:SurveyDetails.........................................................................................................19

Figures Figure1:“WhatVUCAMeansforyou”........................................................................................2Figure2:ToleranceofAmbiguityResearch-LevelofEducation................................................5Figure3:ToleranceofAmbiguityResearch-Age........................................................................6Figure4:ToleranceofAmbiguityResearch–AgeandGender...................................................6Figure5:ToleranceofAmbiguityResearch-JobSector.............................................................7Figure6:ToleranceofAmbiguityResearch-LevelofSeniority..................................................8Figure7:FiveStepModelforDealingwithAmbiguity................................................................9Figure8:KnownsandUnknownsAnalysisTemplate.................................................................10Figure9:TheRicardodosSantosValueofBusinessExperimentsFormula..............................13



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Research: Tolerance of Ambiguity Understanding the impact of ambiguity and how it affects the decisions you make. Impact of Ambiguity Ambiguity drives our Amygdala into fight or flight mode, this primal part of the brain’s response is regularly triggered in modern business. A Neuroeconomist researched the decision making of subjects as they made increasingly uncertain bets, the less information they had to go on, the more irrational and erratic their decisions became (Bradberry, 2015). Employees, “will do what they are most comfortable doing in order to feel as if they are contributing something appropriate” (Kail, 2011). Ambiguity in teams can create hesitation as even a familiar path doesn’t feel like it will create meaningful output. Leaders need to build the boundaries for problem solving, providing clear direction, synchronising the team’s efforts while continually communicating adjustments. Leaders are susceptible to either over-generalising in their communication, providing a distinct lack of clarity, or over-compensating by ‘faking it’ and making others feel confident, even if there’s no strong basis for their judgement. Research Findings Education level has a small but causal impact on our ability to tolerate ambiguity (Figure 2), Men generally have a higher tolerance for ambiguous situations than Women and Age significantly affects our ability to tolerate ambiguity (Figure 3). These are the summarized results of a survey of 124 cross-industry respondents. The assessment undertaken provides a score for each respondent’s tolerance of ambiguity (TA) using the methodology updated by Herman (Herman, et al., 2010) and based on Budner’s original research (Budner, 1962). Results have been averaged and analysed below. The average score over all respondents was 30.49, with lower scores showing a higher tolerance (please note graphs are inverted).



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Education A small increase in tolerance for ambiguity with increased education is found, with PhD level qualifications or above providing a significant increase. Education is designed to drive the student into greater independence in their learning at each level, culminating in academia where students are independently driving research into previously un-examined areas. This has however driven an estimated 53% of postgraduates to have Mental health issues (Wilcox, 2014). “I felt unsupported, isolated and adrift in uncertainty.” (Walker, 2015). The 72.9% of students that successfully complete PhDs (Jump, 2013) therefore have potentially suffered immensely, but significantly learnt from their experience and expanded their ability to tolerate ambiguity. To safely increase tolerance for ambiguity, Leaders should expose themselves to uncertain and ambiguous issues and actively choose to undertake exploratory projects, but with mentorship, support, and following a structured process such as this papers 5-step process. Liberal Arts degrees tend to generate an increased tolerance of ambiguity compared to STEM subjects, in fact a third of all Fortune 500 CEOs have liberal arts degrees (Ray, 2013), (Green, 2015).

Figure 2: Tolerance of Ambiguity Research - Level of Education

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33GCSEorequivalent A-Levelorequivalent BachelorsDegreeor

equivalentMastersDegreeor

equivalentPhDorequivalent

ToleranceforAmbiguity:ImpactofEducationLowerscoresindicateahighertolerance



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Age and Gender On average Men (28.8) have a higher tolerance of ambiguity than Women (30.5). Both genders see a notable reduction in tolerance at age 31-35, slowly building back toward the late-forties. Caring for children typically affects parent’s attitude to risk-taking, strongly linked to uncertainty, and therefore operating in ambiguous situations becomes less tolerable when their children are young. The average age of Mothers is now 30.2yrs and Fathers 33.1yrs, aligning strongly with this theory (Office for National Statistics, 2014). Other emotional tags, such as previous dealings with a country/ person etc going badly in a previous role/ project, can similarly taint ability to make decisions in ambiguity. Young leaders need to be aware of emotional drivers, responding by being honest with their team and placing more value on their team’s input, mentors and respected expert’s opinions before making decisions.

Figure 3: Tolerance of Ambiguity Research - Age

Figure 4: Tolerance of Ambiguity Research – Age and Gender

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ToleranceforAmbiguity- EffectofAgeLowerscoresindicateahighertolerance

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ToleranceofAmbiguity- EffectofAgeandGenderLowerscoresindicateahighertolerance

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Job Sector Business, Consulting and Management had the highest tolerance for ambiguity. Mainly driven by consultants, this result is expected due to continually changing engagements where they are contracted to provide clarity on ambiguous initiatives. Engineering and Manufacturing, shows a strong tolerance level, typically a risk-averse sector, tolerance can be explained due to the inherent ambiguity in overcoming design challenges being dealt with by risk-averse solutions. Surprisingly the lowest scoring profession was Teaching and Education, further research is required to understand the drivers for this, but a first theory is that primary and secondary education is procedurally (syllabus) driven, and pace of change is slower in this environment.

Figure 5: Tolerance of Ambiguity Research - Job Sector

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Healthcare

Teachingandeducation

Retail

Accountancy,bankingandfinance

Transportandlogistics

Charityandvoluntarywork

ScienceandPharmaceuticals

Energyandutilities

Engineeringandmanufacturing

Business,consultingandmanagement

ToleranceofAmbiguitybyJobSectorLowerscoresindicateahighertolerance

Sectors with only one respondent removed



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Level of Seniority The ability to tolerate ambiguity generally increases from Students through entry level Graduate positions to Senior Staff grades. This trend is reversed in management positions, where the ability to tolerate ambiguity slightly decreases at all levels in organisations except for Directors or equivalent. Therefore, averse to traditional thinking, organisations should not “protect” their staff from ambiguity, yet involve staff in ambiguous situations to leverage their abilities. Importantly however Leaders must continue to take ultimate responsibility for decisions and direction.

Figure 6: Tolerance of Ambiguity Research - Level of Seniority

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ToleranceofAmbiguity- LevelofSeniorityLowerscoresindicateahighertolerance



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5 Step Model for Ambiguity How to overcome ambiguous situations, cope without having all the information and thrive in this uncertain world. If you regularly find yourself in an ambiguous situation you are in good company, nearly all biblical leaders were led in ambiguity. It is an element of the free will allowed by God, providing the space for faith to exist. Abraham was left in deep ambiguity when told by God to leave his country, leave his relatives and go to a land which he will be shown (Genesis 12). Great Christian leaders tolerate not knowing the future, because they know that the promised land awaits them (Rice, 2011).

35% of CFOs named strategic ambiguity as one of their top three career stresses (Deloitte, 2012).

This paper proposes a continuous five step process to deal with and thrive in ambiguity (Figure 7). Discernment, where relevant information is gathered, analysed and interpreted, then Strategy is developed by Decision making. Decisions are tested and ambiguity clarified through Experiments, with performance continually Assessed and strategy Adapted to the findings. Teams should then pause to Celebrate the incremental dividends (outputs in product or knowledge) before continuing round the cycle. This leadership model was developed from primary research, supported by biblical, academic and business insight into ambiguity, strategy and psychology.

Figure 7: Five Step Model for Dealing with Ambiguity

Discern

DecideStrategy

ConductExperiments

AssessandAdapt

CelebrateDividends



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Step 1: Discern The aim of this step is to reduce the ambiguity in the situation to the minimum possible in the time frame available before decisions on strategic direction in step 2. Listening is the key leadership skill required in this step, leaders should engage with all sources of information possible, including their own knowledge and intuition. At the outset of any vision, a Christian leader is called to pray and listen to God, otherwise "the work of the builders is wasted" (Psalm 127:1 NLT). A key realization for leaders is that not everything is uncertain by analysing what is known, the known-unknowns and to acknowledge the unknown-unknowns of a truly ambiguous problem. (Bradberry, 2015) The team’s knowledge of similar situations is a key source of information here.

Knowns Known Unknowns Unknown Unknowns

Areas you have information about and/or

can control

Information you can perceive or predict being

part of delivering the vision but currently do not

have

This will be blank to begin with! The aim is to reveal

as many of these items as possible through

discernment and move them into one of the other

two lists.

Figure 8: Knowns and Unknowns Analysis Template

This analysis will drive you into breaking the seemingly overwhelming issue into smaller parts, allowing you to delegate clear tasks to the project team to fill in known knowledge gaps, asking “what can we do to fix this?” (Rockwell 2013).

“leadership is not about making decisions on your own, it is about owning them once they are made” (Stanley, 2003)

God speaks to us through the Bible and also through wise counsel. Jesus said, "what king would go to war against another king without first sitting down with his counsellors to discuss whether his army of 10,000 could defeat the 20,000 soldiers marching against him?" (Luke 14:31 NLT). Connect with others who have faced similar uncertainties and challenges (Rockwell, 2013). It is important to avoid “group-think” during this process by keeping external judgements independent and tracing the source of information, e.g. is it all regurgitated from one source in different ways? (Kahneman & Klein, 2010). These views may not give the leader all the information required, but the key is that they provide confidence in the direction of travel.

Discern DecideStrategy

ConductExperiments

AssessandAdapt

CelebrateDividends



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Carrying out a “Pre-Mortem” (Klein, 2007) or “Hard-Truth” (Rockwell, 2013) analysis of potential project failure modes and risks allows you as a leader to explore worst case scenarios, fears and doubts of the project team in a safe environment before they occur, without being held back by solutions. Leaders should aim to contain analysis to specific meetings, as continually asking “What If…?” can have emotional health impacts on the team and scupper the positive environment required to overcome ambiguity. The final voice to listen to is internal. Trusting your intuition (or Gut-feeling) was found to be a key trait from the survey. Your internal voice is “your subconscious looking at inputs ‘offline’ ” (Shaw, 2013). To have confidence in intuition, leaders should recognise influences on it (such as personal emotions and influential stakeholder’s opinions) and give their intuition space and time to develop answers (Bradberry, 2015). Over-reliance on Gut-feel, without carrying out and utilising the data gathering stages and discussions with stakeholders, is a major factor in project failure. Build a track record with smaller decisions to develop trust in your gut on the big decisions.



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Step 2: Decide Strategy The aim of this step is to be confident as possible in the decisions made in order to provide clarity to the team and outside stakeholders. Leaders should understand that some of their decisions will be wrong (Shaw, 2013) but importantly leaders will “survive a few bad decisions, you will not survive a lack of clarity” (Stanley, 2003). Time is an important factor in the decision making process. Understand how much time you have to make decisions, setting out a preliminary timeline to show the impact of delay on the business.

"we cannot play it safe and please God" (Hebrews 11:6)

Leaders should be confident and clear in their direction (Shaw, 2013), but not fake. When leaders pretend; they close themselves off from the input of others and they expose their insecurity to the very people they have asked to follow them. Language is key by using phrases such as “I don't know right now, but I am confident we can figure it out." (Stanley, 2003). Inform the team that your confidence is due to the process being followed and the people involved, not your perfect knowledge. In order to make the key decisions for the project, top performing respondents in the survey create a framework/ assumptions that decisions can be based on and agree these with key stakeholders. This framework is based on the known/ unknowns and should reflect personal/ organisational values, supporting explanation of your decision process with senior stakeholders.

“We may make our plans, but God has the last word” (Proverbs 16:1 TEV).

In developing strategy, task your team with developing imperfect solutions which can move the project forward. The search for perfect solutions eats time and creates uncertainty in itself (Rockwell 2013). Rather, creating multiple solution options and designing experiments that will provide knowledge across multiple options provides a greater chance of success and inherently builds contingency plans. Finally, a key trait of a successful leader in the eyes of team-members is that once a decision is made, collectively or not, they are the one to stand up, answer for, and deal with the consequences.


ConductExperiments

AssessandAdapt

CelebrateDividends



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Step 3: Conduct Experiments The aim of this step is to further reduce ambiguity, supporting the strategic decisions or providing evidence to change the direction of the project as early as possible (step 4). Experiments can be undertaken at any stage and if practical, select experiments could be undertaken prior to the original project “go” decision at step 2. “Test the Water” was a phrase continually brought up in this paper’s survey. Experiments allow the team to undertake pre-determined tests to explore the unknown-unknowns from step 1. Experiments are key to revealing more certainty in the project at low cost and allow the project team to gain rapid feedback on their direction and correct their course prior to the main project failing.

“Ambiguity can reveal facts at any time that are going to affect your best decision. Be willing to accept these gifts and incorporate them into your direction and make the necessary changes.” (Shaw, 2013)

Utilising the “Time-Box” technique (Furr & Dyer, 2014), where experiments are undertaken in short, defined timescales, provides a structure to project team members in ambiguity, reducing the perception of lost effort if the experiment is unsuccessful. Setting expectations early with your team and all stakeholders that it will take time and experimentation to work through this ambiguous situation is the role of the leader (Cook, n.d.). The Ricardo dos Santos Formula can support these discussions, as shown in Figure 9, showing the breadth of value gained from experiments.

Figure 9: The Ricardo dos Santos Value of Business Experiments Formula


ConductExperiments

AssessandAdapt

CelebrateDividends

InsightValue•ReducingUncertainty

OptionValue•Go,Change,useknowledgeelsewhereorStopdecision

StrategicValue•Relationshipsbuilt,knowledgegainedforotherprojectsetc

ValueofBusiness

Experiments



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Step 4: Assess and Adapt The aim of this step is to deliver an updated strategy by assessing and adapting it based on the experiments and work undertaken so far. Changing plans as early as possible based on an enhanced level of certainty since the start of the project. A common theme of the top respondents to this paper’s research was “continual re-assessment” or “frequent re-evaluation of progress”, instilling a rhythm of checking and acting. Now further knowledge has been gained by the project, the team and leader set about enacting contingency plans created in step 2, or problem solving with the team, generating ideas and re-writing the plan from the new information. It takes a strong leader to agree to change quickly however. The need for change may be perceived as a failing of the project by senior stakeholders or affect the team’s morale. Leaders tend to get more general in their communications or lag in decision making when further ambiguity hits, transferring the uncertainty to their teams and greatly increasing chances of failure. It is the leader’s responsibility to speak hard truths, but the key is to do so optimistically (Rockwell, 2013) and to recognise the hard-work and knowledge gained towards the vision (see step 5). Pretending everything is OK does not instil confidence, but acknowledging setbacks and re-phrasing as knowledge gained and future challenges to overcome shows strong leadership.

“Openness to new ideas is a leadership characteristic highly correlated with effectiveness.” (Kail, 2011)

Challenging the team to think divergently (Kail 2011) is the next step. Prior to challenges arising, leaders need to have set up a culture accepting of risk. When experiments and information show a new path is needed, leaders must free the time and space for the team to explore all options and support open-thinking. Being present is a key leadership success trait during this step of the cycle (Allen, 2009-16), sensing and feeling the current environment for new inputs without permanently “macro-leading” in the future or at too high a level. Jesus said “Give your entire attention to what God is doing right now, and don't get worked up about what may or may not happen tomorrow. God will help you deal with whatever hard things come up when the time comes” (Matthew 6:34 MSG). Decisions are being made for tomorrow, but as a leader you only have the information in front of you, assess and adapt your plans and be decisive with the new path.


ConductExperiments

AssessandAdapt

CelebrateDividends



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Step 5: Celebrate Dividends The aim of this step is to keep a relentless positive focus on the project, by allowing the team time to celebrate the output of the previous development round, underlining the benefits of the work undertaken so far, even if the knowledge gained showcases a new direction is required. Ambiguity is an inherently stressful environment to be operating in for the team and the leader (Shaw, 2013). When decisions turn out to be incorrect, teams can feel as if their efforts were misplaced and have resulted in little or even backwards progress. This step challenges team leaders to set up a culture of celebrating incremental dividends (Kail, 2011) at regular intervals, milestones or after key decisions, focusing the team that generation of knowledge is key to enabling early sight of issues in ambiguous projects and something to be celebrated. Of course celebrating major progress or success is also advised! Dan Rockwell sums it up by saying “Celebrate small wins. Enjoy how far you’ve come. Momentarily forget how far you must go.” (Rockwell, 2013) In sport, playing to the playbook is not the goal (a fixed strategy), winning the game is the goal, but each play (cycle of the 5 step process) delivers knowledge about the other team (business environment), their strengths and weaknesses, allowing for more confidence in the next decision and ultimately an increased chance of winning the overall game. “Measure success by the scoreboard, not by (adherence to) the playbook” (Stanley, 2003).

“Knowing that ultimately happiness comes from making the best of everything instead of having the best of everything.”

Survey Respondent

Repeat the Cycle Continuing the 5 step process cycle by discerning further information, making more informed strategic decisions, experimenting and testing to remove more ambiguity, assessing progress and adapting the strategy as soon as reasonable evidence is found provides a strong feedback loop for dealing and thriving in ambiguity whilst minimising the stress of your team by celebrating the small wins, major successes and/or major advances in knowledge gained.


ConductExperiments

AssessandAdapt

CelebrateDividends

Discern

DecideStrategy

ConductExperiments

AssessandAdapt

CelebrateDividends



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Conclusion Tolerance for ambiguity changes through a career and is influenced by age, seniority, education and gender. Understanding tolerance and its effect on leaders and members of teams is key to delivering vision. Importantly, Senior Staff grades were found to have high tolerance to ambiguity, a skill that organisations should leverage in the boundaries of a strong decision framework process. Utilising the five step process enables leaders to structure their approach to ambiguous situations, providing tools to discern, decide, experiment, analyse/adapt and celebrate with their team to maximise the chances of success. The aim is to reduce the process cycle time to generate the fastest response to new knowledge, allowing for clear changes of course, reducing uncertainty for team members. Ultimately allowing leaders to not just deal with, but thrive in ambiguity, working in this space effectively and seeing it as a competitive advantage.

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Appendix A: Survey Details Personal research was undertaken for this paper through an Online survey using Google Forms. The survey had 124 respondents at the time of publishing. The main assessment for tolerance of ambiguity (TA) was carried out using 21 questions based on original research carried out by Budner (Budner, 1962). 12 were used as the basis for majority of the analysis, based on the refined set of questions from (Herman, et al., 2010) and responses were collected using a Likert scale (Likert, 1932) ranging from Strongly Agree to Strong Disagree. Further qualitative questions were asked and profiles collected of each of the respondents. The full set of questions is shown below and the full data is available on request if required for further research. Tolerance of Ambiguity Assessment: 1. An expert who doesn't come up with a definite answer probably doesn't know too

much. 2. I would like to live in a foreign country for a while 3. There is really no such thing as a problem that can't be solved 4. People who fit their lives into a schedule probably miss most of the joy of living 5. A good job is one where it is always clear what is to be done and how it is to be

done 6. It is more fun to tackle a complicated problem than to solve a simple one 7. In the long run, it is possible to get more done by tackling small, simple problems

rather than large, complicated ones 8. Often the most interesting and stimulating people are those who don't mind being

different and original 9. What we are used to is always preferable to what is unfamiliar 10. People who insist on a yes or no answer just don't know how complicated things

really are 11. A person who leads an even, regular life in which few surprises or unexpected

happenings arise really has a lot to be grateful for 12. Many of our most important decisions are based on insufficient information 13. I like parties where I know most of the people more than ones where all or most

of the people are complete strangers



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14. Teachers or supervisors who hand out vague assignments give one a chance to show initiative and originality

15. The sooner everyone acquires similar values and ideals, the better 16. A good teacher is one who makes you wonder about your way of looking at

things 17. I avoid settings where people don’t share my values 18. I can enjoy being with people whose values are very different from mine 19. I like to surround myself with things that are familiar to me 20. I can be comfortable with nearly all kinds of people 21. If given a choice, I will usually visit a foreign country rather than holiday at home Profile Questions: 22. Gender 23. Age 24. Role (Short description) 25. Work Sector 26. Highest Education Level 27. Employment Status 28. Employment Level (previous highest level if retired/ out of work) 29. Do you make better decisions alone or as a group? Qualitative Answer Section: 30. How do you make decisions when you don't have all the facts? 31. How do you overcome ambiguity? (Not knowing all the information or where the

path to take is unclear etc)

ilm - ambiguity

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