Research in psychology and biology shows that individuals differ in their responsiveness, i.e., ability to recognize changes in the environment. We argue that this ability is relevant to corporate decision making under uncertainty. Using the literatures in economics, finance, and decision analysis as our guide, we conduct empirical tests in which we infer the ability of a firm to recognize emerging developments (we dub such firms alert) from their propensity to take costly precautionary actions in the face of uncertainty. Using a large sample of U.S.-listed firms over the 1988 ~ 2010 period, we report that (1) alert firms exhibit greater long-term profitability than inert firms that have never taken precautionary actions, (2) the positive association between being alert and profitability monotonically increases in uncertainty, (3) being alert does not convey any discernible benefits in low-uncertainty environments, and (4) alert firms are more responsive to changes in investment opportunities. The results are consistent with the theoretical predictions.