In the investment world, taking risks during volatile periods can result in a windfall. During his 60 years at the helm of Berkshire Hathaway, Warren Buffett delivered compounded annual returns of nearly 20% — double what the S&P 500 achieved — guided by the rule “Be fearful when others are greedy and be greedy when others are fearful.”

But company leaders have been more hesitant to embrace this principle when it comes to corporate strategy. We assessed a sample of nearly 6,000 companies over the past 15 years, identifying times when their respective industries faced elevated uncertainty. Only 10% of companies chose to make big bets during such periods; the lion’s share instead decided to cut back on exposure. But our subset of risk-takers were rewarded: They achieved stronger growth and higher shareholder returns and did so without facing a greater chance of negative outcomes. These findings raise a question: What’s holding the majority of companies back from being bold?

The Benefits of Taking Risks Amid Uncertainty

We identified 10 high-uncertainty events that unfolded between 2010 and 2020 — major macroeconomic, geopolitical, technological, or societal disruptions that materially reduced predictability for a given sector. Crucially, we did not limit our analyses to crises and downturns but instead focused on events that heightened uncertainty and reshuffled an established playing field. Examples include the outbreak of COVID-19 and its effects on the travel and hospitality industry, the rollout of the Affordable Care Act and its impact on the health care space, and the emergence of mobile computing as the new consumer platform of choice in the IT sector.