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 .
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