April 26, 2018

Leading in a VUCA World

by Wendy Ryan in Uncategorized

Businesswoman walking on a tightropeIn a vacuum, leadership would be a lot simpler.  For example, you could learn the skills required to engage different people, create a compelling vision, align stakeholders with the vision, and execute it relatively quickly in a linear fashion.  But we live in a VUCA world, which is the opposite of simple and linear.
First developed in the 1990s by the U.S. Army, the term VUCA describes the post-Cold War environment that is more unpredictable than generations before us experienced.  Despite its military origins, VUCA applies equally well to civilian life and leadership, as well.
VUCA is an acronym that stands for:

  • Volatility, especially as it relates to the dynamics of change as it has increased in speed, volume, type, and scale.
  • Uncertainty, arising out of the increased volatile environment that makes forecasting the future more difficult.
  • Complexity, leading to confusion as cause-and-effect relationships are more difficult to determine.
  • Ambiguity, or the existence of multiple meanings that results in a lack of clear answers and solutions.

In short, outcomes are no longer as easy to predict with accuracy for our human brains as they may have been for us to predict in the past. Every decision, both in our personal and business lives, may effect and be affected by a larger set of rapidly shifting variables than we can easily integrate.   Once you embrace the concept, you may start to recognize VUCA dynamics operating around you in many different contexts.

Examples of VUCA in Today’s World

Imagine a seemingly straightforward business decision:  You are a marketing director and are tasked with formulating a digital strategy to introduce a new product into the market. In theory, you could determine your KPIs, build the strategy, launch the campaign, and evaluate the results.  But reality is not so linear.
Changing user behavior, market conditions, and evolving digital channels introduce volatility. As a result, KPIs are harder to define. The complex nature of digital marketing means you don’t quite know why the campaign is or is not performing, and this ambiguity results in fewer tangible takeaways to help you optimize a new campaign in the future.
Introduce a global component, and the complexity increases.   Your routine business call with an international associate or co-worker can be complicated by differing time zones, cultural expectations and more. This type of uncertainty and volatility is core to the concept of VUCA.
Even college students are not immune. Consider this Financial Times article from 2016, in which MBA student Sílvia Simões outlined how each of the four variables impacted her life in scheduling, homework, presentations, and more.   Unsurprisingly, VUCA can make a major impact on organizational leadership, as well.

How VUCA Can Affect and Change Organizations

In his 2009 book Leaders Make the Future, Bob Johansen was one of the first to discuss VUCA in a business context. The former President and current Distinguished Fellow at the Institute For the Future (IFTF) recognized that the same four principles apply to organizational leadership, as well.
Businesses and organizations operate in increasingly uncertain environments.  What started in the technology industry has now taken over other market segments as well.  Hardly any brand can depend on a stable environment in which the challenges tomorrow mirror those of today. As one expert put it, “You’re either disrupting, or being disrupted.”
In Forbes, Robert Sher outlines just what that means for businesses of all sizes, In this turbulent world, we need breadth of skills in every leader, so they can respond to market changes with agility. Companies with the best leaders always win, and this maxim is truer than ever in this permanently uncertain environment.  Invest in developing your leadership team and start now.”
Johansen would certainly agree. His application of VUCA to the business world operates on the premise that the complicated, uncertain, and chaotic future we are facing requires leadership that is prepared to change the status quo and is willing to go beyond its traditional strengths to survive and thrive.
In a recent interview, Johansen specified that in his view, the next decade will be defined by one word: scramble. Put simply, climate change, cyber terrorism, and other catastrophes will bring about drastic, unforeseen challenges that are impossible to prepare for. Only leaders who have the vision to anticipate these changes and are agile enough to react quickly will have a chance to guide their organization’s to lasting success.

How to Lead Effectively in a World of VUCA

Embracing the reality of VUCA is uncomfortable for most leaders.  Even if you think you are making all the right moves and decisions, there is no guarantee of business or organizational success.   Johansen argues that with the right mindset and a new set of skills, you can increase your odds of success despite uncertainty. He suggests 10 skills leaders can cultivate now to better navigate VUCA:

  1. Maker Instinct, or the ability to build and create something new.   Leaders should seek to build, not just manage, because even mature organizations will need to need to constantly renew and reinvent themselves.  This is the new form of stability.
  2. Clarity, specifically as it relates to complex situations. Current KPIs and metrics do not always serve to increase clarity.   Can you cut through the noise and identify the most relevant leading indicators? And can you communicate that clarity with others in your organization?
  3. Dilemma Flipping, or the ability to turn around the negative effects of a problem. What positives can you take away from a dilemma, and how can you leverage these positives into a viable solution for the organization? Can you identify “unsolvable” challenges, and turn them into advantages instead?
  4. Immersive Learning, especially when it comes to environments and situations that are unfamiliar to the leader. This includes quickly adopting to new situations, immersing yourself in them and embracing differences in order to learn from them and make rapid adjustments.
  5. Bio-Empathy, or the ability to understand, respect, and learn from patterns we observe in other complex organic systems often seen in nature. According to Johansen, this type of empathy can significantly enhance our ability to appreciate complexity.
  6. Constructive Depolarizing. We live in an inherently polarized world. Leaders must develop the skills required to bring individuals from different and diverging political ideals, cultures, and backgrounds together and working toward a common goal.  Leaders who can use depolarization in conflict situations are especially successful in building constructive progress in a VUCA framework.
  7. Quiet transparency, which describes the ability to be transparent without grandstanding. Leaders are more credible over the long term when they don’t just share valuable information with everyone who cares, but do it in a humble way that inspires followers rather than promoting themselves.
  8. Rapid Prototyping.  Leaders should be able to quickly create prototypes of innovations and new processes, testing them out in real time and welcoming the resulting failures as opportunities to learn.  Fail early and often, and combine this skill with dilemma flipping to create lasting success.
  9. Smart Mob Organizing. Leadership means little without the ability to inspire followership.  Leaders need to be able to leverage digital and social media in order to leverage ‘smart mobs,’ which work together passionately to bring about change and success.
  10. Commons Creating, becomes more important as the organization grows. It describes the ability to create an organizational culture in which cooperation is valued and competition is channeled productively. That arises when we build an organization that nurtures teamwork and shared assets benefiting everyone involved.

In a VUCA world, uncertainty does not mean certain failure.   Instead, it is a great opportunity to grow your leadership capacity.  If you’d like to learn more about VUCA and how to develop your leadership skills, please visit our website, www.sjleadershipcoach.com.

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