Scenario Planning Amid Radical Uncertainty
At chaotic times like these, leaders must fight paralysis and bad decisions — by carefully building an expansive scenario map.
Carolyn Geason-Beissel/MIT SMR | Getty Images
Radical uncertainty is paralyzing leaders and companies across the U.S. Unlike manageable risk, radical uncertainty has no boundaries or historical data to suggest the way forward. Two dangerous patterns can emerge as a result: overindexing on short-term signals and anchoring on false certainty to escape anxiety. The solution is for leaders to prepare for radical uncertainty through expansive scenario planning, where uncertainties are mapped out further than seems plausible.
“What’s the best-case scenario that you can logically describe?” As an academic and adviser who has spent more than 30 years forecasting future intersections of people and the political economy through the lens of technological change, I’m often asked that question. My answer is always the same: Best-case scenarios do not exist. Neither do worst-case scenarios. Human-powered futures are always a mix of misunderstood and unimagined downsides and upsides. What’s different from one era to another? The range and breadth of uncertainty that decision makers must navigate as they try to amplify the upsides and reduce the downsides of change.
That’s important because politicians, CEOs, financial markets, and everyday people have one thing in common: They abhor radical uncertainty. It makes their purpose and mission seem impossible.
Radical uncertainty is entirely different from conventional risk, which positively powers markets and creates opportunities for leaders to make decisions with potentially outsize political and economic payoffs. Risk has boundaries and relevant data; it can be priced and hedged because it represents a partially knowable probability distribution among outcomes. That’s why the saying “no risk, no return” makes sense and why we comfortably talk about and understand “risk-on” and “risk-off” behavior in markets and politics.
Radical uncertainty has none of those positive characteristics. When events move far outside the boundaries of what we know from the past, and when the shape of the probability distribution can’t be mapped, business and political systems tend toward paralysis. People become deeply anxious. Markets gyrate. C-suite confidence corrodes and decision-making freezes up.
There is clear evidence for each of those effects right now in the United States’ political economy. Consumer confidence has been volatile in 2025, including some lows not seen since the 2008 financial crisis. During the second week of April, the S&P 500 rose 9.5% in one day and dropped 3.5% the following day, transiting from bear to bull market in less than two months in the spring. Walmart declined to provide earnings guidance for the first quarter, and United Airlines offered two separate and entirely different profit forecasts for the second quarter.
The common thread is radical uncertainty engineered by the Trump administration’s notable first six months.