Decision-Making Under High Uncertainty

Ananya Sheth
Mar 18
5 min read

Updated: Apr 4

with Sheldon Bernard and Oliver Sibony at Mondelez International, Hanover, NJ - March 26-27, 2025

This symposium's objective is to understand decision-making under high uncertainty in the context of transformational innovations within large companies

BACKGROUND

Over the last several years, the consortium has explored evidenced-based research focused on the challenges of successfully implementing a transformational innovation. Topics included the challenges of scaling transformational innovations, applying rigorous hypothesis testing and experimentation, portfolio management strategy and techniques, understanding the challenges of implementing an ambidextrous organization, best practices for team formation, and understanding Generative AI.

The upcoming consortium symposium focuses on decision-making under high uncertainty, particularly on transformational innovations. The decisions that drive these projects can determine an organization's future success or failure, making effective decision-making under uncertainty both a critical capability and a significant challenge. From the work of Daniel Kahneman, who was awarded a Nobel Prize in economic science, we know human cognition is prone to biases and heuristics that can distort judgment—particularly when faced with complexity and incomplete information. Kahneman’s distinction between “System 1” (fast, intuitive thinking) used for sustaining innovations and “System 2” (slow, deliberate thinking) used for transformational innovations underscores why quick instincts can mislead us in situations of uncertainty. In transformational innovation, where past data and familiar metrics are scarce, relying exclusively on gut instinct (“System 1”) can result in overconfidence or excessive caution. Kahneman’s research emphasizes the need to engage the reflective “System 2” more diligently to counteract these potential biases and encourage a more structured examination of decisions.

The consortium is particularly interested in learning how to succeed at transformational innovations close to the core. Overall, we have divided the innovation space into four areas 1) Sustaining Innovation – Better, cheaper, faster using the current business model; 2) Transformational Innovation Close to the Core – significantly expanded job to be done with significant benefits to the category, usually with only minor changes to the current business model. Examples would be P&G’s Tide pods laundry detergent, Apple’s adoption of face recognition for enhanced security, Boeing’s 787 Dreamliner, which was their first design to replace aluminum with carbon fiber, and Adobe’s desktop-based perpetual licensing of their software as they were the first major software company to adopt this model. (This is the consortium’s sweet spot and primary focus); 3) Transformational Innovation Far from the Core – These would represent a new business model/category to the company. Examples would be Apple’s launch of the iPod, and Crest White Strips which pioneered teeth whitening outside of the dentist’s office and 4) Transformational Innovation very far from the core (a.k.a. disruptive innovation ). This would be a completely new category. An example would be Virgin Galactic’s attempt to provide suborbital spaceflights for space tourists or Alphabet working to develop products and services for human longevity.

On the morning of the first day of the symposium, we will focus on better understanding how the companies attending make decisions in high-uncertainty projects. Sheldon Bernard will lead our discussions on the afternoon of the first day. He brings deep and practical expertise in applied decision sciences, specializing in high-stakes decision-making under uncertainty. With over 15 years of experience advising Fortune 100 boards and executive teams, he has pioneered Bayesian methods and simulation-based real options valuation to enhance strategic decision-making. As the founder of A440 Management LLC, Sheldon has successfully overseen billion-dollar projects in Special Situations, venture capital, R&D, and corporate strategy, equipping organizations with robust frameworks for navigating uncertainty. His expertise in designing decision-science-driven innovation portfolios and scenario planning makes him a valuable asset to our discussion on decision-making under uncertainty.

The second day of the symposium will be led by Oliver Sibony, who is considered one of the leaders in this area. Olivier offers invaluable expertise in improving innovative decision-making under high uncertainty by integrating behavioral science with strategic rigor. As co-author of Noise: A Flaw in Human Judgment with Daniel Kahneman and Cass Sunstein, he has deeply explored how cognitive biases, variability in expert judgment, and flawed decision processes can derail innovation choices. Drawing from his experience as a former Senior Partner at McKinsey & Company and his research at HEC Paris and Oxford’s Saïd Business School, Oliver will help the attendees design structured decision frameworks that mitigate bias and enhance clarity in ambiguous environments. His work emphasizes the importance of reducing noise in evaluations, fostering collective intelligence, and using systematic decision-making techniques—such as pre-mortems, reference class forecasting, and structured dissent—to navigate the unpredictable nature of breakthrough innovation. By combining research-driven insights with real-world business applications, he equips organizations with practical strategies to make better, more confident innovation bets in uncertain markets.

Sheldon Bernard Founder of A440 Management

Sheldon’s firm focuses on Special Situations and decision-making under uncertainty. He is a trailblazer in the world of applied decision sciences. With over 15 years of experience in "special project" work for Fortune 100 boards and executive teams, Sheldon champions the democratization of decision theory and advocates leveraging Bayesian methods in strategic problems.

As the founder of A440, Sheldon has made it his mission to bring applied decision science into finance and innovation. He has successfully overseen multiple billion-dollar projects in Special Situations, R&D, venture capital, Lean, corporate strategy, and development. Additionally, Sheldon is developing A440's unique framework for Special Situations investment and has designed the Applied Decision Science for Innovators (ADSI™) training curriculum to increase organizations' decision-making acumen. Sheldon is also a member of the Knowledge Sharing Council of the Society of Decision Professionals, where he extends these tools into non-traditional domains. He earned a Business degree from Wayne State University, an MBA from the University of North Carolina at Chapel Hill, and holds the Strategic Decision & Risk Management certificate from Stanford.

Oliver Sibony - Professor of Strategy at HEC Paris

Meeting content

Pre-readings (Podcasts)

Learning from failure - Harvard Business Review - Interview with A.G. Lafley