Leading through uncertainty: how to lead when nobody can tell you the odds

Risk and uncertainty are not the same problem

In 1921 the economist Frank Knight drew a distinction that is still the most useful starting point. Risk is a situation where you know the possible outcomes and can put odds on them: insurance, a well-understood market, a repeated operation. Uncertainty is a situation where you cannot estimate the odds, and sometimes cannot even list the outcomes: a new technology, a regulatory shift, a war, a competitor nobody saw coming.

Most management tools were built for risk. Budgets, forecasts and business cases assume that the future looks roughly like the past. When that assumption breaks, the tools keep producing precise numbers, and the precision itself becomes a trap. A leader who treats uncertainty as if it were risk tends either to over-commit to one forecast or to wait for data that will not arrive.

The practical question is not "what will happen?" but "how do we stay able to act well across several things that could happen?"

Leadership in volatile markets starts with scenarios, not forecasts

Scenario planning became known through Shell in the 1970s, where Pierre Wack and his team used it to prepare the company's managers for a world of oil shocks that most forecasts ruled out. The aim was never to predict. It was to change what managers were ready to notice.

A simple version for a leadership team

• Name the two or three forces that would change your business most and that you cannot control.
• Combine them into three or four plausible futures, each with a short, memorable name.
• For each one, ask what you would regret not having done today.
• Identify the early signals that would tell you one scenario is becoming more likely.
• Agree in advance what you will do when those signals appear.

The last two steps matter most. They turn a vague sense of threat into a watch list, and they let the team react to evidence instead of to mood.

Reversible and irreversible commitments

Under uncertainty, the most valuable property a decision can have is that it can be undone. Jeff Bezos popularised the image of one-way and two-way doors in his letters to Amazon shareholders: most decisions can be walked back, a few cannot, and organisations get into trouble when they treat both kinds the same way.

For a leader, the discipline is to sort commitments early. Move quickly on what is cheap to reverse, and use it to buy information. Slow down deliberately on what locks in capital, people or reputation for years. Where a big bet cannot be avoided, look for ways to stage it: pilots, options, break clauses, partnerships before acquisitions.

This is also where the institute's idea of strategic intuitive intelligence becomes practical. Experienced leaders often sense a shift before the data confirms it. The sensible use of that sense is to place small, reversible bets that test it, not to stake the company on it.

How to communicate without certainty

The instinct in uncertain times is to wait until you have answers before speaking. Teams read that silence as bad news. What people need is not certainty, which you cannot give, but a clear picture of what is known, what is not, and how decisions will be made.

With the team

• Say what you know, what you do not know yet, and when you expect to know more.
• Give the intent behind the plan, so people can adapt it when the details change. Armies have long called this commander's intent.
• Name the few things that will not change, whatever happens: values, priorities, how people will be treated.
• Keep a regular rhythm of updates, even when there is little new to say.

With the board

Boards tolerate uncertainty better than surprise. Bring them the scenarios, the signals you are watching and the triggers you have agreed, before the numbers force the conversation. Ask explicitly which decisions they want to see and which they are happy to leave with management. A board that understands your map is far more likely to back a change of course when one is needed.

The leader's state is part of the strategy

Uncertainty is physiologically expensive. Research reviewed by Amy Arnsten (2009) shows that acute stress weakens the prefrontal cortex, which supports flexible thinking, and shifts control towards more habitual responses. Under prolonged ambiguity many leaders become more rigid exactly when they need to be more adaptable.

The state also spreads. Psychologists call it emotional contagion: people pick up and mirror the emotional tone of those around them, and in organisations they watch the leader most closely. A visibly anxious CEO makes a whole company more anxious. A calm one, who admits what is unknown, gives the team permission to think instead of brace.

Composure is trainable. Regular sleep, fewer back-to-back meetings on hard days, and slow breathing at around six breaths per minute, which has moderate evidence for improving stress regulation, all help keep judgement available when the situation is least clear.

How the Cosmic Wolf Institute works on leadership in uncertainty

The institute's work starts from the idea that the quality of a leader's decisions depends on the state they are taken from. Its Somatic Sovereignty pillar trains physiological regulation through breathing, heart rate variability and vagal tone, so that ambiguity does not push the leader into a narrow, defensive mode.

On that base it develops what it calls strategic intuitive intelligence: the capacity to anticipate in high-volatility environments. In corporate terms, that means reading trajectories as well as data, and knowing when a hunch deserves a small test. Its Alpha Strategy pillar carries the same composure into the boardroom and into negotiation. These are the institute's own frameworks, taught as training rather than as clinical treatment.

For leaders facing a specific uncertain decision, the private 1-on-1 session with Juan Pablo Ochoa Vivanco over Google Meet is a place to map the scenarios and the conversation with the board before it happens.