Navigating a world of pitfalls
Choose the right balance of wait-and-see and action. Then adapt.
What’s the point? 🟡 | Your instinct to freeze during periods of volatility is human. When determining how to respond to periods of volatility in business and in life, you may choose to wait and see, choose to act, or choose to deploy a combination of both approaches. In all cases, you must be able to adapt as the situation changes.
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You’re watching an action movie. The hero must survive several trials to reach the end of their quest. One trial is a set of swinging blades (*insert slicing sound as they swing*). The hero glistens with the sweat of exertion. They’re a little bloody from a recent fight. And now they have to summon the ability to make it through the blades without dying.
As it turns out, swinging blades exist primarily as an invention of our imaginations (and those of Hollywood). We used things like spikes and pitfalls to trap or deter our enemies in the real world.
This disconnect reflects how we want the world to work rather than how it does work. We want our challenges to come in the form of swinging blades because, while dangerous, they operate with a set timing and can be overcome with sufficient smarts and physicality.
Pitfalls, on the other hand, are traps we never saw coming.1
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Living in a foggy world of pitfalls
We always operate with uncertainty: We do not know everything, we cannot predict the future, and things around us change.
Yet right now, it’s hard to deny that the mist of uncertainty that usually hangs over our lives has thickened into a fog. Generative AI redefined work, our shared social norms continue to erode, and we're inundated with information, much of which is overly simplistic or entirely fake.
While this fog has slowed our steps, we still seek clarity and a way forward. What’s killing most of us isn’t the fog; it’s the volatility we’re experiencing simultaneously.
While we frequently use volatile and uncertain interchangeably, they mean different things. Uncertain means “not known beyond doubt.” Volatile means “characterized by rapid or unexpected change.”
In other words, pitfalls.
AI makes significant leaps every couple of weeks and displaces whole skillsets each time. Managers announce policies that require everyone to be in the office, even though the people they hired were promised virtual work. Record-breaking tariffs are announced today, and rescinded tomorrow.
And though it isn't easy, we’re trying to navigate these pitfalls. For example, companies in the US have been cutting costs to cope with tariff plans. While few have (yet) announced big layoffs, many have chosen to slow or freeze hiring and pause work with contractors and consultants. The intention is to avoid irreversible investments because the situation could change at any moment.
Many of us are staying in our current jobs. We're watching our spending. We’re not starting that home project we planned.
Because when the floor could fall out at any moment, the safest thing to do is to stay exactly where we are.2
The carousel never stops turning.
We crave certainty. Or a modicum of predictability. Navigating an increasingly complex environment with less clarity than ever puts a lot of pressure on us. Throw in volatility, and many of us want the world to stop turning.
According to the Threat Rigidity Thesis, when we’re faced with adversity and perceived threats — like the constant fear that at any moment, the floor could fall out underneath us — we tend to conserve resources and restrict how much information we process. We rely on our established routines and block out the outside world, choosing instead to focus inward.
These behaviors act as a defense mechanism. They make us feel like we can pause the world until we have the clarity and security we need to act with confidence. In short, they make us feel more in control. The reason we want control is in part because we don’t want to make a mistake that we can’t reverse.
Unfortunately, while freezing makes us feel better, it may also prevent us from adapting and ultimately leave us worse off. The question is whether you're responding by making a strategic choice or simply reacting.
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Choosing to wait and see
While I’ve noted LinkedIn gurus touting the hustle-and-grind response that those who aren’t doing are losing, not acting can be a strategic choice.
The economic justification for a wait-and-see approach comes from Real Options Theory. The theory states that when investment decisions come with high uncertainty and significant irreversibility, there’s value in waiting because waiting allows you to gather information.
Here’s the catch: The choice to wait, to not act, is only strategic if it’s done deliberately and with ongoing evaluation. Waiting will not be a valuable choice indefinitely.
To ensure that the choice to wait remains strategic, define specific triggers so you know exactly what information to gather. Don’t only look for calm, look for opportunities and trends. They may provide a valuable signal that it's time to make a move.
While you’re waiting, consider different ways to respond to each trigger so that when you have the information, you can act right away.
You also need triggers to tell you when waiting starts to impose costs of its own. In business, hiring freezes can lead to burnout, diminished morale, and higher turnover, which hurts your reputation and your ability to innovate and adapt. All of these factors make whatever action you do take much more difficult.
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Choosing to act
You can also choose to act. The first set of options roots itself in securing your base: protect your existing revenue streams and profit margins, rainy day fund, reputation, and capabilities. You cannot make aggressive moves if your house isn’t in order. That’s like having a kid to fix a marriage: It only increases the strain until the cracks burst.
Provided you have a solid foundation, you can make moves. Here are some options:
Stay the Course
While you need to continue to monitor your environment, if the source of the volatility doesn't necessitate a change in your plans, you can choose to stay the course. Make this choice explicitly and express your reasoning so you can better adjust if circumstances change.
Diversify
You can also choose to diversify, which is a fancy way of saying put your eggs in more than one basket. Keep in mind that you don’t want to jump into baskets you cannot carry; that’s most likely to result in broken eggs.
Experiment
Experiments allow you to test assumptions, prove opportunities, and discover unexpected insights. Design an experiment that you can back out of if it fails. Understand the point of the experiment, make a case for why proving your hypothesis would be beneficial, and ensure you know how you’ll capture unforeseen knowledge.3
Develop Skills
And lastly, you could invest in developing skills. There’s little reason to stop developing the skills you have or to halt investment in any skills that aren’t directly impacted by the volatility, like learning how to operate a piece of software you’re no longer going to use because you don’t need it anymore.
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It’s likely both.
What you choose to do hinges on an accurate understanding of your situation. You need to know the type, source, and impact of the volatility. Is it a short-term cash crunch or a long-term structural shift? Is it a natural disaster or a change in government policy? Is it going to affect supply, demand, access to capital, or all three?
It’s rarely wise to wait and see for any sustained period. If you aren’t confident enough to make a bold move, you can invest in reinforcing your base, developing skills, and gathering information.
Conversely, it’s unwise to act for no other reason than you feel you must do something. Frenetic behavior can exhaust your resources, render you strategically incoherent, or expose your vulnerabilities, all of which can be equally, if not more, damaging than waiting for more information.
The reality is that our ability to adapt is essential all the time; we simply feel the need more acutely when we’re trying not to fall through the floor.
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Adapt or die.
Choosing the right balance and adjusting when you receive more information is part of adapting. Both individuals and businesses need to be able to adapt strategically to thrive. In a complex world laden with uncertainty and spiked with increasing volatility, it’s essential.
If you had those skills before now, you’re going to be able to navigate this moment better than those who aren’t already good at adapting.
If this isn’t something you do well, the best time to develop those capabilities was years ago.
The next best time is right now.
Except for that guy who tells everyone why they should have seen it coming after whatever it is happens. It was just so obvious, you know?
I love the play Noises Off. There’s a moment where Brooke loses her contact and everyone scrambles to find it. Someone points out that in the process of looking for it, someone could have stepped on it. One of the characters shouts, “Nobody move! Now everyone look under their feet” which leads to the entire case looking at the soles of their shoes one at a time.
If you know in advance your efforts will work, it’s not an experiment. And some of the best learnings come from discovering things we had no idea would happen.