The Art of Deciding When You Cannot Know Enough
“Uncertainty is an uncomfortable position. But certainty is an absurd one.” — Commonly attributed to Voltaire
We expect leaders to decide, provide direction, and take responsibility for outcomes. Yet they must make some of their most important decisions when they have little idea how things will turn out.
We believe that better information produces better decisions. Generally, it does. We invest in research, forecasts, sophisticated models, and increasingly artificial intelligence, hoping to reduce the unknown.
But what happens when the information we need does not exist? When the future depends on events we cannot predict or decisions others have not yet made?
This is where leadership becomes particularly demanding.
Over the years, I believe that one of the greatest dangers is failing to distinguish between what we know, what we assume, and what we merely hope.
When Risk Becomes Uncertainty
In 1921, economist Frank Knight distinguished between risk and uncertainty.
Risk concerns situations in which we can estimate the probabilities of potential outcomes. Under genuine uncertainty, we cannot reliably calculate those probabilities. Sometimes we cannot even identify all the outcomes.
Organizations have become reasonably sophisticated at managing risk. They calculate probabilities, construct scenarios, and develop contingency plans. These disciplines are valuable, but they have limits.
Consider a company facing a technological disruption that could transform its industry. Management can estimate investment requirements and compare alternative strategies. What it cannot reliably predict is how customers, competitors, regulators, and society will respond.
The difficulty begins when we treat uncertainty as merely a risk for which we haven’t yet collected enough data.
The Dangerous Search for Certainty
People expect leaders to know what they are doing. Admitting uncertainty can feel uncomfortable, especially when colleagues, employees, or shareholders want reassurance.
The natural response is to ask for more information, commission another study, or postpone the decision until the picture becomes clearer.
I have encountered this tendency throughout my professional life. Sometimes further analysis was necessary. Other times, I suspected that what looked like prudence was actually reluctance to accept responsibility.
I have always valued rigorous analysis. But I have also learned that more information does not bring greater understanding. It may produce conflicting interpretations and additional questions.
Meanwhile, circumstances continue to change.
At some point, the search for certainty stops improving a decision and starts preventing it.
Recognizing that point is itself an exercise in judgment.
Knowing When to Decide
One of the hardest questions a leader faces is deciding when enough is enough.
Acting prematurely can be costly. Waiting too long can be equally damaging. Opportunities disappear, problems grow, and competitors move ahead.
I find the distinction between reversible and irreversible decisions useful.
When a decision can be reversed without high cost, there is often good reason to act, observe what happens, and adjust. When the consequences are difficult to reverse, greater caution is justified.
But caution should not become an excuse for indefinite postponement.
Before making an important decision, I would want to understand three things:
- What additional information could genuinely change our assessment?
- What would waiting cost us? and
- How exposed would we be if our assumptions proved wrong?
There are no universally correct answers. Much depends on the circumstances, the stakes, and the organization’s ability to respond if things go badly.
That is why experience matters, although experience alone doesn’t guarantee good judgment.
The Courage to Say “I Don’t Know”
Many people believe leaders should always project confidence, especially during difficult times.
I have never been entirely comfortable with that expectation.
Confidence is reassuring when it rests on sound judgment. When it is merely a performance, it can become dangerous. People may hesitate to raise concerns or challenge assumptions because they believe the leader has already decided.
I would much rather work with someone who acknowledges uncertainty than with someone who offers reassuring answers without sufficient evidence.
Of course, admitting uncertainty is not the same as admitting helplessness.
A leader can explain what is known, what remains unclear, why he or she decided on a particular course, and which developments might lead to reconsideration.
Such openness does not diminish authority. In my experience, credibility depends less on appearing infallible than on intellectual honesty and accepting responsibility.
Building an Organization That Can Adapt
Another dimension of uncertainty deserves more attention: the limits of individual judgment.
However experienced or intelligent a leader may be, no one sees everything.
Important information spreads throughout an organization. Employees dealing directly with customers, operations, or emerging technologies may recognize changes long before senior management does.
Whether those observations reach decision-makers depends considerably on the organization’s culture.
Are people encouraged to question assumptions? Can they disagree with their superiors without fearing consequences? Do departments exchange information or protect their own territory?
These questions matter most when circumstances change rapidly.
Leaders must also be prepared to revise their decisions. I have never regarded changing one’s mind in response to new evidence as a weakness. What concerns me more is the tendency to defend an earlier decision simply because one’s reputation has become attached to it.
An organization that can recognize mistakes, learn, and adjust is better equipped to face uncertainty than one that depends on the supposed foresight of a single individual.
What Leadership Ultimately Provides
We judge leaders by results. Understandably so. But results do not always tell us whether the underlying decisions were sound.
A carefully considered decision can produce a disappointing outcome because circumstances changed unexpectedly. Conversely, a poor decision may occasionally succeed through sheer luck.
This is why I believe we should analyze how they made decisions, not just what occurred afterward.
Were alternative interpretations considered? Was disagreement encouraged? Did those responsible recognize the limits of their knowledge? And was the organization prepared to change course?
Perhaps the most revealing question comes later: Has the experience made the organization better equipped to handle the next unexpected challenge?
I doubt any leader can offer people certainty about the future. What leaders can provide is a disciplined way to confront the unknown, make choices, and accept their consequences.
And that, I believe, is quite enough to ask of leadership.
Questions for Reflection
- Which important decision are you facing where the outcome cannot be reliably predicted?
- What do you know, what are you assuming, and what are you merely hoping?
- Are you treating genuine uncertainty as if it were a risk you could calculate?
Download the Chairman’s Playbook Worksheet — Play 61: Leadership Under Uncertainty
📚Further Reading
1. Margaret Heffernan — Uncharted: How to Navigate the Future (2020)
Challenges our excessive confidence in prediction and argues that navigating uncertainty requires imagination, experimentation, preparedness, and collaboration.
Examines how resilient organizations recognize emerging problems, respond to surprises, and adapt under pressure.
3. Frank H. Knight — Risk, Uncertainty and Profit (1921)
Introduces the fundamental distinction between measurable risk and genuine uncertainty. Provides the theoretical foundation for the argument that not every leadership challenge can be resolved through better data or more sophisticated calculations.
Explores the challenges of exercising leadership when familiar solutions are inadequate and difficult changes must be confronted.
5. Gerd Gigerenzer — Risk Savvy: How to Make Good Decisions (2014)
Shows how people can improve decisions through statistical understanding, practical judgment, and simple decision rules.
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