We are living in a confusing, polarizing world of dizzying complexity and puzzling contradictions. For every one of us, these are unsettling times. But for leaders, who must plot the path forward for hundreds and thousands of people, these are exceptionally challenging times.

In normal circumstances, leaders struggle to make cool, calculated decisions in a measured, unbiased, unemotional way. They are human, after all. But there is nothing normal or predictable about today’s world. It begs the question: How can business leaders make the right decisions for their company when they face unfamiliar and volatile situations and there are no obvious choices, when they face mounting pressure from multiple stakeholders with different expectations, when the second- or third-order effects of their decisions are unclear, and when the consequence of making the wrong decision could be a dramatically negative impact on their company’s brand, revenue, and valuation?

In this article, we offer an answer to what is a deeply personal challenge for leaders today. As we see it, the heart of the problem is the way the fast and radically changing “real” world clashes with our own mental model of a “familiar” world that has developed over many years. This clash can potentially cause havoc—“cognitive dissonance” is how the CEO of one global industrial company described it to us. In practical terms, it can disrupt the way leaders make sound, long-term, strategic plans. Umang Vohra, the chief executive of Cipla, a global generic-drugs company, put it well when he told us: “The comfort of predictability [for making decisions] is gone.” As we will explain, there is a solution to this problem. But first, it is necessary to understand the two critical factors that have made this a burning challenge for the current generation of leaders: one, the troubling, contradictory features of the real world today; and two, the way we, as human beings, develop our mental model of the world around us.