Five Traits of Leaders Who Excel at Decision-Making

You may feel that this is a time of radical uncertainty, when past patterns no longer reliably predict the future. Uncertainty inherently leads us to a place of emotional discomfort because it signals both potential opportunity and adversity. Neuroscience shows that powerful and automatic brain responses are simultaneously triggered in the form of approach emotions (excitement) and avoidance emotions (doubt and anxiety). Because the resulting state of ambivalence is tense and painful, there is a potential rush to ill-considered action, whether it be to grasp opportunity or forgo it as quickly as possible.

I recently collaborated with HSBC to study the question of how we can empower more people with effective decision-making skills in a world of complexity and disruption. We sought to identify global trends in emotional responses to uncertainty, as well as the tendencies that predict strong decision-making abilities within this context. The study involved 17,555 individuals across 12 markets, including more than 3,000 business participants ranging from leaders of small and medium enterprises to executives of multinationals. Respondents shared details on how they made, are making, or plan to make decisions at some of their biggest personal and professional moments.

Our research report, “Seizing Uncertainty,” reveals that effective decision makers share five key attributes that emotionally equip them to overcome the decision paralysis caused by doubt and anxiety — and enable them to undertake effective action when faced with uncertainty. It’s a vital skill: Nearly half of respondents reported that they often feel regret “at not taking opportunities when they have passed me by.” This means that unless leaders learn to manage the emotions involved in decision-making, they could suffer, as may their organizations.

Five Traits of Leaders Who Handle Uncertainty Well

What is it about the leaders who can deal with uncertainty well compared with their peers? Here is what we learned. Collectively, these are the skills leaders and organizations can prioritize strengthening.

1. They view change positively.

One key attribute linked to effective decision-making under uncertainty is that these leaders feel equipped to deal with change. This is something that’s easier said than done: In my research with HSBC, although 70% of business leaders claimed to generally view change positively, upon further probing, 47% admitted that they see unexpected changes purely as something to be managed or coped with, and a further 13% said that they prefer to avoid them altogether. This underscores the fact that while many people may claim to embrace uncertainty, many struggle to do so in practice.

Employing the power of imagination can be a key to alleviating this burden. One survey respondent, a manager at a restaurant chain in Hong Kong, told a story that was indicative of what we heard from others who were able to frame the value of change. He told us that he sensed that his business was stagnating and that a new bakery franchise would be beneficial. He was apprehensive, though, about approaching management with his idea for a change in direction. “I agonized for ages, having mapped out the entire plan in my head,” he said.

He now recalls how simple the solution was. He took his manager to another local bakery and talked through his idea, focusing on both the numbers and the palpable feel of the venue. He helped management to envision what he could see. It worked: He got permission to try out one bakery, and the chain went on to expand successfully. “Removing the stigma of change was all about appealing to the imagination, starting with a small, tangible step,” he said.

2. They frame unexpected challenges as opportunities instead of problems.

Another shared trait of confident decision makers is the habit of reframing unexpected changes as opportunities to be exploited or explored rather than problems to be fixed. These leaders found enjoyment in stepping out of their comfort zone.

Like each of the other traits we identified, this is a skill that can be nurtured by personal decisions. For instance, a business development professional at a biotech startup recalled how, after being laid off, she decided to use her newly free time to travel. “I’ve exposed myself to countless situations I wouldn’t have previously dared to face,” she told us. “The lessons I learned are undoubtedly the reason I’m as resilient as I am today.”

In our study, 74% of respondents said they agree that uncertainty brings possibilities and opportunities. Only 7% strongly said they disagree. And 61% said it’s characteristic of them to see value in risk-taking, even if it doesn’t pay off.

The professional at the biotech company said that she’s often complimented on her approach to challenges at work. Leaders there “praise my positive attitude during unexpected events, even when others were stressed,” she said. She knows that she developed this trait due to circumstances that were initially adverse, so she encourages colleagues to understand the role of circumstance: When circumstances throw you off course, are you primed to recognize opportunity in some aspect of the situation?

3. They train themselves to be tolerant of uncertainty.

One common emotional response to uncertainty is freezing. Of the business leaders who participated in our research, 32% said they have felt paralyzed by uncertainty when it was time to act. Even more, 42%, said they have put off thinking about decisions because it is uncomfortable.

In our survey, respondents who said they feel able to act even when there is uncertainty about the outcome exhibited comfort with moving despite lacking all of the desired information and an ability to withstand unforeseen events, adapting plans as required. They were in the minority, though: Only 32% of respondents said that it’s not characteristic of them to find that “unforeseen events upset me greatly.”

We heard that treating decisions as experiments can make a difference. Experiments can be monitored, through predefined indicators, to assess whether an approach is working or needs to be modified. This can help leaders overcome the initial paralysis that hinders action.

One strategy we heard was from a leader who found that when her team was hesitant about moving forward on something, they framed their language in terms of games and gambling, such as “We can’t bet on that happening,” “I’m not sure the gamble would pay off,” and “I’d rather hedge our bets.” She actively encouraged her team to adopt scientific language instead and to use phrases such as “My hypothesis would be that …,” “If we can control these variables …,” or “This could act as a control situation.” If they slipped into old habits, she corrected them.

4. They’re fluent in failure (and they don’t fear it).

Participants in our study who were able to confidently move through the discomfort of uncertain variables had a sunny view of failure. As noted earlier, they saw value in taking risks, even ones that didn’t pay off, viewing challenges and setbacks as a chance for self-improvement. Eighty-three percent said they agree that the fact that they’ve made mistakes in the past has made them better decision makers.

It follows that in times of uncertainty, it’s important to create space for failure and make it a platform for learning. An entrepreneur in our study said he knew that indecision could be damaging: “At every turn, I aimed to take stock of potential risks and rewards associated with the various decisions on my hands.” He made his leap of faith by grounding it in careful planning and consultation. That was key to pivoting from uncertainty to action.

Creating a culture where failure is destigmatized and teams feel comfortable expressing regret is also crucial when navigating change and embracing the potential for tripping up along the way.

5. They’re grounded in optimism.

The final key attribute displayed by effective decision makers in our research was one that runs counter to the prevailing currents in many organizations: grounded optimism. Effective decision makers possess a genuine belief that even if things don’t go as planned, the eventual outcome will be positive. Discouraging this mindset can be detrimental to cognitive function, and we found it to be the most important trait of the five for managing through uncertainty.

One respondent, a managing director in private equity, explained that three decades of experience have taught him the critical importance of this outlook in navigating periods of intense pressure. “I’ve learned that accepting things frees up your mind,” he said. “Things often sort themselves out automatically. Obsessing over them only creates tremendous pressure. I simply breathe, let it go for a while, and return to it when I’m feeling more composed.”

In a highly risk-averse culture, this concept can feel abhorrent to many people. Countering the bias toward pessimism can be challenging. But attitude counts: Among our survey respondents, 70% said that their mindset has enabled them to make the most of the opportunities they have been afforded.

Though there is a tendency to invest more resources on gathering information and making plans when things feel uncertain, that may not be the best use of an organization’s resources — especially given the reality that, during times of radical uncertainty, information itself has a limited shelf life.

Organizations need to instead be clear with employees, at all levels, that what truly stands teams in good stead is not an insistence on getting everything right but resisting the failure to act. Ultimately, the emotional toll of uncertainty — and the culture it can engender if it’s left unchecked — can be highly corrosive. Encouragement that helps employees develop the five traits we shared can empower people for uncertain times.