BEST PRACTICE
Leading in a VUCA world
The Volatile, Complex, Uncertain and Ambiguous world we live in requires dispersed leadership. By Anne Phillipson, Programme Director, William J Clinton Leadership Institute
V
UCA is an acronym used in the military to describe extreme conditions that are Volatile, Uncertain, Complex, and
Ambiguous.
Many CEOs, business leaders and owners can relate to these same conditions in the business world, with constantly changing challenges brought on by politics, economics, society, environment and technology in a hyperconnect 24 / 7 world.
If change is the only constant, and the slowest rate of change we will experience is today, then our leadership approach must also change to survive and thrive in a VUCA world.
The business leaders we work with at the Leadership Institute are finding that they have to shift from their traditional approach of problem solving and planning aimed at reducing uncertainty, to an approach where they actively engage with uncertainty and adopt a much more agile approach.
In fact, the IT world is ahead of most sectors on this front, with Agile software development the norm – where collaborative crossfunctional teams work together and encourage rapid and flexible response to change!
This shift is easier for some leaders than others. If you are the type who likes to have all the answers before making a decision, work in a rigid hierarchy, tend to be singlefocused and detailed, and like to spend a lot of time on longterm strategic planning, then the shift to VUCA is going to be extremely uncomfortable for you.
If, however, you have a vision that you measure success against but you are flexible in how you get there, you have a wellconnected and diverse network which you lean into, you think big picture, and you engage your people and consult widely, then the VUCA world isn’ t quite so scary for you.
In fact, you can thrive in such circumstances, embracing uncertainty and see it as a chance to innovate and grow.
Here is advice on how business leaders can approach the VUCA challenges
Volatility
The challenge is unexpected or unstable and may be of unknown duration, but it’ s not necessarily hard to understand; knowledge is often available.
Example: Prices fluctuate after a natural disaster or takes a supplier offline.
Approach: Build in slack and devote
resources to preparedness – e. g. stockpile inventory and / or have multiple global suppliers you can call on.
Uncertainty
Despite a lack of other information, the event’ s basic cause and effect are known. Change is possible but not a given.
Example: A competitor’ s pending product launch muddies the future of the business and the market.
Approach: Invest in information analysis tools – collect, interpret and share data. Read and collect data from a wide variety of sources to keep up to date.
Complexity
The situation has many interconnected parts and variables. Some information is available or can be predicted, but the volume can be overwhelming to process.
Example: you are doing business in many countries, all with unique regulatory environments and cultural values.
Approach: Restructure, bring in or develop specialists and build up resources to address the complexity. Invest in educating your people to work crossculturally by building cultural competence.
Ambiguity
Casual relationships are completely unclear. No precedents exist; you face‘ unknown unknowns’.
Example: You launch products outside your core competencies in immature or unknown markets.
Approach: Experiment. Test your hypotheses. Design your experiments so that lessons learned can be broadly applied. Plan fail safe experiments.
Personal attributes that will help leaders thrive in a VUCA world:
• Clarity of vision, direction and consistent messaging
• Think big picture. Take a view from the balcony, not the dance floor!
• Trust the experts around you. Build a diverse team with specialist knowledge and consult them
• Be curious and openminded. Develop a mindset of continuous learning
• Leverage diversity. Draw on multiple points of view and experience
• Give your people on the ground freedom to innovate, fix problems, create new products or services
• Embrace and expect change; resist the temptation to cling to outdated processes and behaviours
Leaders are always incomplete. It’ s difficult to be all of these things.
That’ s why it’ s important to build a team and a Board around the CEO that can leverage the leader’ s strengths and compensate for any gaps.
More and more we are seeing jointCEOs who can share the leadership challenge in these unpredictable times. Long gone are the days of stability and predictable change, where it was possible for one person at the top to have all the answers and point the way.
What living in a VUCA world requires is dispersed leadership throughout an organisation to cope with the volatility, uncertainty, complexity and ambiguity that is today’ s business reality.
22 www. businessfirstonline. co. uk