Exploiting Uncertainty: How Evolved Risk Management Drives Strategic Resilience and Growth

I recently presented at the RIMS Annual Conference in Seattle. In my presentation, I discussed the challenges leaders face in driving strategy in a complex global environment.

Creating Strategic Resilience

Though organizations are facing unprecedented volatility, complexity, and ambiguity, I believe there is a silver lining in that uncertainty. Today’s environment may be rapidly shifting, but it can also be the birthplace of strategic advantage. There is, however, a twist.

Traditional risk management approaches are designed to stabilize operations and minimize downside exposure but are increasingly mismatched to the realities of modern strategy. I recommend a fundamental reframing where uncertainty should not be treated merely as a threat to be controlled, but as a strategic resource that can generate competitive advantage when leveraged intentionally. Drawing from contemporary theory, practical risk-treatment frameworks, and a real-world case study of Occidental Petroleum, this article outlines how leaders can strengthen decision-making, influence executive discourse, and embed resilience into enterprise strategy.

Why  Uncertainty is a Strategic Asset

Risk professionals have long been tasked with protecting organizations from variability. Yet the tempo of disruption has outpaced the stability-based orientation of legacy risk models. This is manifesting as tariffs, political upheaval, and strained supply chain systems. The contemporary firm can no longer rely on prediction and control as its primary tools of resilience. Instead, uncertainty itself must become an input to strategy.

When leaders treat uncertainty as a source of optionality

• Organizations build the capacity to navigate multiple futures.

• Risk leaders move from compliance stewards to strategic partners, thereby influencing Board direction, business strategy, and culture.

From Risk Management to Risk Leadership

Traditional risk management frameworks emphasize identifying risks, assessing probability and impact, implementing controls, and monitoring compliance. These approaches excel in stable environments, but falter when the future is increasingly unknowable. Risk leadership, by contrast, embraces a broader mandate:

The modern risk function must evaluate:

• Asymmetry of exposures

• Systemic and compounding interactions

• Temporal dynamics

• Emergent opportunities hidden within volatility

  
  

 Boards today require forward-looking insight, not retrospective reporting. Executive conversations must rise to this strategic level. Risk leaders add the most value when they frame uncertainty in strategic terms and connect risks to performance outcomes. Scenarios must be communicated without prescribing certainty, but instead probabilities.

Risk treatments should be treated as investments rather than cost centres. This requires a shift in vocabulary—from “mitigation” to “advantage,” from “control” to “capability.”

Uncertainty as a Dual Asset

Uncertainty always contains two sides:

• Exposure: threats, disruptions, instability

• Opportunity: new markets, business model innovation, technological acceleration, first-mover advantage

When organizations ignore the opportunity embedded within uncertainty, the potential exists that their competitors are capitalizing on it.  The challenge is not eliminating uncertainty—but extracting the best comparative value from it.

A Strategic Framework: Four Lenses of Risk Treatment

To exploit uncertainty effectively, organizations need a treatment portfolio rather than a single protective mechanism. The four lenses below represent complementary forms of resilience:

Four lenses of resilience: Adaptive, Experimental, Hedged, Collaborative.

 1. Adaptive Resilience

Building capacity to adjust rapidly as conditions change.

Examples: dynamic planning, scenario-based strategies, modular operations.

2 . Experimental Resilience

Testing unfamiliar opportunities at a small scale to learn fast and cheaply.

Examples: pilot programs, innovation sandboxes, prototype business models.

3. Hedged Resilience

Protecting against downside exposure while pursuing upside potential.

Examples: diversified revenue streams, contractual hedges, flexible capital allocations.

4. Collaborative Resilience

Leveraging partnerships and ecosystems to share risk and accelerate adaptation.

Examples: strategic partnerships, cross-industry alliances, co-investment, joint R&D, shared infrastructure.

When combined, these treatments create a portfolio of options—a strategic buffer that increases an organization’s agility and long-term value.

Case Study: Occidental Petroleum and the Opportunity in Carbon Risk

Occidental Petroleum (Oxy) offers a compelling illustration of uncertainty exploited for advantage.

Leaders Practising Adaptive Resilience

The Strategic Context

In the early 2020’s, the oil and gas sector faced profound uncertainty driven by peak oil scares, decarbonization policies, volatile commodity prices, and stakeholder pressure. This supported emerging carbon markets with potential displacement by alternative energy technologies. These pressures could be framed solely as threats; however, through the lens of my framework, Oxy deviated from the typical path and demonstrated strategic resilience.

Adaptive Resilience

Oxy embedded long-term carbon risk into its strategic planning processes. Rather than treating carbon exposure as external pressure, the company incorporated transition scenarios directly into its investment criteria and asset planning.

Experimental Resilience

The company launched small-scale trials in carbon removal, carbon capture, and new business models related to low-carbon fuels, learning in real time and accelerating technological readiness.

Hedged Resilience

Oxy developed a blended portfolio of traditional oil and gas assets alongside emerging carbon technologies. This diversified exposure allows participation in both legacy and future energy markets.

Collaborative Resilience

Recognizing the scale of climate transition, Oxy forged partnerships with investors, research institutions, and carbon management providers, reducing capital burden and accelerating knowledge transfer.

Strategic Outcome

By acting early and decisively in a domain characterized by uncertainty, Oxy converted what most viewed as a liability into a potential long-term growth platform. This illustrates how uncertainty can be leveraged to create option value rather than strategic paralysis.

Implications for Business Leaders

To embed this mindset across organizations, risk leaders must focus on five priorities:

5 leadership priorities

1. Elevating Board Conversations

Boards need clarity on:

·       How uncertainty shapes strategic options

·       Where investments create future resilience

·       What forms of volatility may create an advantage

·       Risk leaders should translate uncertainty into business cases rather than heat maps.

2. Embedding Risk in Strategic Planning

Risk must become part of:

·       Capital allocation

·       Scenario development

·       Innovation cycles

·       Performance management

·       Culture and values

Cultures that are not risk-aware or planning for optionality will have declining performance

3 Strengthening Organizational Culture

A risk-aware culture is essential for resilience. This requires:

·       Reducing scepticism to weak signals

·       Psychological safety

·       Scenario thinking

·       Accountability for cross-functional risks

4. Building Optionality

Organizations must design portfolios with:

·       Flexibility

·       Scalable responses

·       Redundancy

·       Strategic learning loops

5. Measuring Resilience

Key indicators include:

• Speed of adaptation

• Diversity of revenue pathways

• Decision tempo

• Learning velocity

• Cross-functional risk integration

Conclusion

Uncertainty is not the enemy—it is the raw material of future advantage.

Organizations that continue to view risk as a compliance function will miss critical opportunities. Those who embrace uncertainty will build more resilient, adaptive, and opportunity-rich futures. Leaders have a pivotal role. By reframing risk treatments as strategic investments, aligning them with organizational purpose, and elevating conversations with boards and executives, they can drive meaningful transformation. Uncertainty is here to stay. The question is no longer how to avoid it, but how to exploit it intelligently.

Do you want to learn more about embedding resilience into your strategy? Contact me to explore risk leadership resources.”