Probabilistic thinking. It’s unnatural for most of us. As leaders, our natural instinct is to tell our teams, our bosses, and our investors what is going to happen. With certainty. We build a model, a forecast, and we get an answer. A point estimate.

But many times, your “answer” will be wrong. Your prediction of the future will be off — sometimes by several orders of magnitude. Other times, your answer will be correct, but for the wrong reasons. When you are wrong, you can lose the trust of your stakeholders. You can lose team harmony. You can lose your true north.

But how can you lead with confidence and vision, while still acknowledging that, in the end, running a business is about making smart bets? Here is how I have worked with teams and clients.

1. Decide on the “why” with your team. Discuss the framework or model.
2. Understand what failure looks like. Run a pre-mortem (a hypothetical exercise that assumes you have failed, and why).
3. Separate the variables you cannot control (e.g. recession, interest rates, regulatory environments) from those you can control. Talk about ways to react to both.
4. Identify milestones and metrics that will invalidate your model. Commit to re-evaluating those metrics.
5. Remember that all models are wrong, but good models are useful.
6. Provide the incentives to reward good decision-making over outcomes.

When you embrace uncertainty with your team, you make better decisions and execute better.