In a world where the political and economic landscape remains complex and uncertain, leaders need to retain clarity as they help steer their organisations across the waves of change
Since the term was first coined by the US Army War College in the 1990s, VUCA (Volatility, Unpredictability, Complexity & Ambiguity) has become an increasingly accurate description of today’s political, economic and commercial reality.
IBM's 2010 global study of CEOs, “Capitalising on Complexity”, argued that companies are ill-equipped to cope with the rapid escalation of complexity in business and the unprecedented level of interconnection and interdependency that is now the norm.
Bringing clarity to this complexity has therefore become an essential competency for today’s business leaders, something highlighted in a 2011 report by The Economist Intelligence Unit which found that some eight out of 10 senior executives recognise the importance of responding quickly to changes in their operating environment.
As Hal Gregersen, senior affiliate professor of leadership at INSEAD, wrote in the Economist report: "The world is now so full of unexpected, surprising changes that companies today must either disrupt themselves or be disrupted." In fact, the upheaval and disruption can be a catalyst for innovation and competitive advantage by organisations that are able to navigate the waves of change.
In such an environment there are no fixed positions, so leaders need to be comfortable with being uncomfortable. These individuals are able to rise to the challenge and help guide their organisations through complexity and uncertainty rather than responding with fear or insecurity. At the same time as they’re dealing with ambiguity and demonstrating adaptability, they will also need to improve their decision-making processes and make swifter, more accurate judgments.
But it’s not just those at the top of organisations who will have to adapt to VUCA. Many of the structures, systems and processes that underpin organisations are unsuited to today’s turbulent times
This type of environment demands leaders who are not bound by limiting beliefs about how the world works. This enables them to detach emotionally from the need to be right and calmly explore other perspectives and possibilities. The ability to shift perspective without projecting on to others opens up clarity and insight. It also helps to see a particular problem or issue through another's eyes.
Today’s business leaders also need to be able to acknowledge the value of different sources of information and intelligence and different world views as being complementary rather than competitive to their own. The old paradigm of control and rule by divide is replaced by one of trust and confidence that people know what to do and will do their best.
Another attribute of leader who can deal with VUCA is the ability to pause and reflect. In his book “The Pause Principle”, Kevin Cashman argued that our natural impulse to speed up, achieve and take action is often futile when dealing with increasing chaos and complexity. Instead, leaders today must not merely act more quickly but pause more deeply.
“Tempering our drive to achieve with a commensurate drive to pause is crucial when facing our toughest, most complex leadership challenges. The greater the complexity, the deeper the reflective pause required to convert the complex and ambiguous to the clear and meaningful. Pause helps us to move from the transactive or the hyperactive to the transformative,” Cashman says.
But it’s not just those at the top of organisations who will have to adapt to VUCA. Many of the structures, systems and processes that underpin organisations are unsuited to today’s turbulent times. That means that recruiting, retention and talent management has to be sufficiently agile to adapt to continually changing requirements and skill demands.
The days of ‘straight line’ job descriptions within highly structured, ordered departments are almost over, with more fluid models required to match the speed and scale of change. Meanwhile, an over-reliance on processes and historically-popular models – particularly within HR functions – will only impair the flexibility, adaptability and entrepreneurialism that is needed to design, implement and embed change in the new normal.
Last year, Green Park, in partnership with Henley Business School, undertook research to identify and define the key elements of successful HR provision required in today’s exacting environment. The results were clear: our new world demands a different set of skills, a new way of approaching challenges and an appreciation of the big picture.
Overall, there needs to be a widespread move toward what we term ‘pragmatic commercialism’. This means that HR professionals and others across the business will have to learn to operate in a context where there are constantly shifting priorities as organisations learn to adapt or to pursue new opportunities. Where the past was all about following a plan, the future is all about responding to change. Detailed roadmaps of how to operate in business do not reflect the world we now live in.
Finally, it is important to remember that while disruption and change are often perceived by employees and managers as destructive, they can also be a source of rapid growth. Business leaders need to be able to do more than manage complexity. They have to be able to assimilate these challenges and to turn them into something tangible and sustainable for the business. Above all, they need to be able to make sense of the world, even if some of those around them cannot.
Roger Russell is head of board practice at Green Park Interim and Executive Search