Uncertainty is all around us. A lean leader’s main purpose is to develop people so they can tackle uncertainty. There are two ways to tackle uncertainty: One is genchi genbutsu (go and see, or seeing for yourself), and the other is to employ the plan-do-check-act (PDCA) cycle, a method for learning and improvement developed by statistician Walter Shewhart.

Claude Shannon, the father of Information Theory, viewed information as the possible reduction in uncertainty in a system. In other words, greater uncertainty presents a greater potential for new information. This can be easily shown as the following equation: New information gain = reduction in uncertainty.

Shannon called uncertainty “entropy” based on advice from his friend John Von Neumann, a mathematical genius and polymath. The entropy in Information Theory is not exactly the same as the entropy in thermodynamics. They are similar in that entropy is a measure of a system’s degree of disorganization. In this regard, information can be viewed as a measure of a system’s degree of organization. Shannon recalled his conversation with Von Neumann, which I quote here from Scientific American (1971), vol. 225, no. 3, p. 180:

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