From Anxiety to Agency: Lessons on Leading Through Uncertainty

Uncertainty has emerged as one of the defining forces shaping the global economy and business decision-making.

From boardrooms to central banks, leaders are invoking the word uncertainty at unprecedented levels, reflecting a growing sense that the future is increasingly difficult to predict.

That rising anxiety is captured in the World Uncertainty Index, a global measure economists developed to track how frequently uncertainty is referenced in country reports.

The number of articles and white papers referencing uncertainty has been climbing for years; however, the emergence of generative AI has accelerated this trend, pushing it to record highs.

How can business leaders respond to the growing uncertainty? How can they make decisions and act?

To address these questions, the Batten Institute for Entrepreneurship, Innovation and Technology recently hosted an ask-me-anything webinar with Darden Professor Saras Sarasvathy on how to thrive amid unpredictability.

Sarasvathy is one of the world’s leading authorities on entrepreneurial decision-making and one of her insights turns conventional wisdom on its head: the entrepreneurs who perform best under uncertainty are not better at predicting the future. They are better at co-creating the future they want to see.

Through decades of research, Sarasvathy discovered that instead of predicting the future, serial entrepreneurs work with what they have, commit only what they can afford to lose, and actively shape the future by drawing partners — customers, suppliers, and even competitors — into the co-creative process. This unique logic and principles that Sarasvathy dubbed “effectuation” are applied by some of the most successful entrepreneurs today.

Where conventional strategy begins with a fixed destination and works backward, effectuation holds that the destination itself can change and that goals emerge through action rather than preceding it.

That shift in framing is the whole point. Sarasvathy argues that once the effectual mindset takes hold, the very phrase “navigating uncertainty” becomes a tacit acceptance that uncertainty is something to be survived rather than leveraged. “You’re really transforming uncertainty into opportunity,” she says. “You’re making opportunities out of all the stuff that you have no control over, because you still have control over what you do with what happens to you.”

What follows is an edited transcript of the webinar, which can be viewed in its entirety here: Navigating Uncertainty: A Live AMA with Professor Saras Sarasvathy.

Q: Do leaders successfully navigate uncertainty by imposing certainty as they envision it, or by embracing vulnerability and riding it out together with their organization?

A: The better question is: should leaders do this, and do good leaders differ from others in how they do it?

For leaders of established organizations — with payroll, customers, and budgets already in place — the job is to create pathways of predictability for employees, customers, and other stakeholders. Too many leaders spend their energy managing investor expectations rather than customer expectations. Good leaders do it the other way around: they manage customer expectations first and bring that reality inward.

But predictability is only half the job. You have to acknowledge that you could simply be wrong. Humility matters deeply here, and it's often overlooked. We live in a more interconnected world where events anywhere can affect us, so uncertainty is more structural and more muti-dimensional than it used to be.

So how do you actually deal with uncertainty? You don't wake up every morning dwelling on how uncertain the world is. As a leader, you create some pathways of predictability within your organization through resources already in your control, but you also embrace an effectual mindset: in an uncertain world, you can still shape outcomes through co-creation with your partners and stakeholders, both within and outside your organization.

Q: How can we build confidence and resilience during prolonged uncertainty? Should we be teaching resilience to children?

A: Yes, absolutely but the more interesting question is how. We live in a culture that praises certainty and prediction far more than it rewards dealing with uncertainty. Jonathan Haidt writes about how we over-protect children to the point where they lose the capacity to navigate setbacks. The issue isn't whether to teach resilience but how.

We also need to rethink what resilience means. The usual framing is reactive: I'm working toward a goal, something goes wrong, how do I bounce back? That's useful, but insufficient. The more powerful version is proactive: how do I build relational resilience? How do I knock on doors, handle rejection, and keep learning from and working with others, including the naysayers?

Relational resilience — the ability to reach out, hear no and keep going — is teachable. But it requires working with parents and teachers, not just students.

Q: As someone leading AI innovation in an organization of 600+ employees, what should I keep in mind as I work to build openness to redesigning how we work in an age of agentic AI?

A: This is both timely and genuinely difficult. Virtually every large organization is wrestling with it.

First, treat AI as a tool, not a threat. People got equally worked up about the internet. That doesn't minimize the challenge but framing matters. Rather than reacting to competitive fear, ask: how can we actually use this effectively?

Second, take seriously the problem of attention. Right now, many employees are encouraged to experiment freely with AI tools, which creates chaos. The technology changes so fast — new capabilities appear almost daily — that people feel overwhelmed and end up learning very little while feeling like they're keeping up. That combination of false knowledge and false fear is a dangerous recipe.

My recommendation is to go deep rather than try to keep pace with everything. Invest in sessions where people actually sit with an expert, take a real course, understand how these tools work and where they came from, not just how to use the latest feature. Cal Newport's work on deep work is worth taking seriously here. You might fall slightly behind the curve in the short run, but you'll be far better positioned to move forward to shape the future.

Finally — and this is where I'll admit some bias — don't underestimate the value of human connection. Many leaders assume AI means we need less human interaction. I think that's a serious mistake. It opens enormous opportunities for people willing to actually talk to customers, build relationships, and co-create with stakeholders. I'm consistently struck by how many people believe they understand their customers when all they're really doing is analyzing data and querying AI, without ever sitting across from a customer in person. High-touch engagement, live events and real conversations are going to become a growing source of competitive advantage precisely because so many organizations are abandoning them.

Q: Is there a correlation between uncertainty and optimism or pessimism? And has uncertainty been weaponized in business and public life?

A: On the measurement side: research does show entrepreneurs tend to be over-optimistic by conventional metrics. But those metrics are flawed. If I know that most startups fail and I still believe I'll succeed, the standard measurement calls me overconfident. What it misses is that expert entrepreneurs are actually quite risk-averse. They structure their bets so that affordable loss is minimal. The decision to start a company looks irrational from a probability standpoint, but if you take six months of nights and weekends with a supportive co-founder, you've brought your downside very close to zero. No one calculates the opportunity cost of not starting a company, because it's incalculable.

That said, entrepreneurs do tend toward optimism, partly because they've learned through experience that they can re-shape uncertainty rather than just endure it. And once you're leading an organization, you have a practical obligation to maintain optimism for the people around you.

On weaponization: yes, and it's real. Human beings are uniquely capable of creating predictability through institutions, safety nets and technology. Post-war prosperity built an unprecedented infrastructure for reducing uncertainty. But that capacity has been turned against itself. People in positions of power are deliberately amplifying uncertainty to frighten others, and the technology that connects us makes that amplification faster and more effective than ever. The consequences are serious, not to mention mental health issues that compound them.

Still, I'm hopeful. Enough people are working in the opposite direction. We can navigate out of this but only through a deliberate effort to understand how uncertainty is manufactured and deployed and by developing the literacy required to transform uncertainty into opportunity.

Q: Is AI contributing to the perception of uncertainty? And will we see AI make strategic decisions in the future?

A: On AI making strategic decisions: yes, eventually, and that trend began long before AI. Many decisions simply don't require humans, and AI is accelerating that reality. My background is relevant here. For my PhD I worked with Herbert Simon, one of the founding fathers of artificial intelligence. Many of today's conversations were happening at Carnegie Mellon thirty years ago. Many issues we face with AI today are not as new as we think.

The real question isn't whether AI can make strategic decisions; it's which decisions we actually want to protect and why. Imagine a world where AI runs almost everything. We'll still need to decide what kind of world we want to live in. That question demands depth, not reactivity.

Most public discourse about AI focuses on near-term job anxiety. The CEO of Glassdoor was on television recently saying that the answer to job disruption is to teach everyone entrepreneurship. I agree. We’ve been saying this for more than a decade. All employees, in some sense, need to think and act entrepreneurially.

But the deeper conversations — about causality, about what human judgment is actually for and about what we want AI to do versus what we want to do ourselves — those aren't happening at the right level of seriousness. The shallow conversations worry me more than what AI can or cannot do. We need to go deep.

Q: Many people are afraid of losing their jobs to AI. What's in the toolkit for coping?

A: When a wave of layoffs hits, the instinct is to update your resume. But it's worth keeping another possibility in mind: displacement is also an opportunity to change something in your community, in your market and even in the systems that govern how safety nets work.

The effectual approach here is to think about what you can build with others in your situation. A crazy quilt of people who've lost jobs in the same industry, the same city, can become something powerful: an advocacy group, a new venture or a community organization. The moment of disruption, as painful as it is, is also a moment of possibility. You always want that awareness in the back of your mind, even while you're still employed. Don’t wait for uncertainty to happen to you. Look for it all around you with curiosity and co-creative optimism.

The Batten Institute for Entrepreneurship, Innovation and Technology is one of the centers of excellence at the Darden School of Business.