“Whereas the heroic manager of the past knew all, could do all and could solve every problem, the post-heroic manager (strategic leader) asks how every problem can be solved in a way that develops other people’s capacity to handle it.” – Charles Handy (Irish economic and social philosopher)
As the saying goes, everything rises and falls on leadership. Whether an organisation or institution – or even a nation – succeeds in attaining its set goals or not very much hinges on its leadership’s ability to sail through every storm that it encounters. Be it at the Board level, Management, Operational or Functional levels, the criticality of leadership effectiveness in the success-equation of every organisation, institution or nation cannot be over-emphasised, especially in the current world characterised by extreme Volatility, Uncertainty, Complexity, and Ambiguity, otherwise known as the VUCA world.
It is therefore very imperative for all leaders and/or potential leaders to comprehend the dynamics of the times in order to develop the strongest sense of consciousness and strategic focus at all times toward organisational survivability, now and in the future. This article therefore seeks to highlight characteristics of the VUCA world and effective leadership approaches to the myriads of challenges within the VUCA world for success and survivability.
Background and characteristics of the VUCA world
The acronym V.U.C.A was first coined by the US Army War College following the 9/11 terrorist attacks on the United States in 2001 – to denote the Volatile, Uncertain, Complex and Ambiguous nature of security threats to the world. The description was also to epitomise the end of Old Wars – thus World War I, World War II and the Cold War – which were fought in the field with known enemies and defined by known tactics of engagement, aggression, combat, and long-term in nature; and also to symbolise the onset of a novel NextGen warfare, wherein globalisation and technology fuelled a new kind of conflict defined by guerilla tactics of ambush, infiltration and insurgency. The world has since witnessed these types of warfare tactics.
Like the military, corporate organisations across the globe since 2001 have also been affected by numerous VUCA incidents (such as the COVID-19 pandemic, Russian-Ukranian war, etc.) and are still experiencing a shift in their operating environments similarly fuelled by globalisation, technology and hyper-competition, which marks the end of relative stability, known rules and structured thinking. The simultaneous and high velocity/intensity changes at the macro-level of global socio-economic, environmental, regulatory, and political arenas have become a constant predicament expedited by digital disruptions which are redefining the concept of work and leadership. The impact of these dynamic and turbulent changes has equally penetrated the micro-levels to upset the hitherto known normalcy.
Volatility is synonymous with instability. It refers to the speed, volume, nature and magnitude of a phenomenon that may or may not be in pattern form. Organisations experience volatility when unexpected events upset an established routine with their speed, magnitude and volume of change, creating disorder. In volatility, leaders understand the changes and have sufficient information about them. But the frequency and unpredictability of those changes compound risk exposure and decision-making. Volatility is not a new concept in the world of work; the only difference is that, previously, volatility happened periodically – driven by wars, natural disasters, epidemics and severe economic crises.
Today, and most undoubtedly in the future, the catalysts of volatility are broad and far-reaching, fuelled by globalisation and triggering increased interconnectivity and interdependence, technology instigating digital and social media disruptions, financial interdependences – producing volatile markets and growing consumer awareness, leading to constantly changing demands. In volatility, the dynamics of change are understood yet unpredictable; and the rapidity of occurrence challenges the speed of responses and leader-focus.
Uncertainty entails a situation that exhibits no trend or pattern, making it difficult to establish or predict what is likely to occur next. It relates to being unable to predict events and lacking clarity on what is happening. Thus, the speed of change and a multitude of players with often conflicting interests complicate the levels of uncertainty experienced by leaders. Organisations experience uncertainty in situations when they know/understand the change happening, yet are unable to determine its level of impact on the organisation. Terrorism is often cited as an uncertain issue affecting stable organisational operations. Increment in leader knowledge and information can contribute to reducing the uncertainty. Enhancing predictability tools through investments in technology and big data would provide better clarity of events and timely solutions.
The element of complexity in the VUCA world relates to the number of diverse states that a situation or system can get into at a certain point in time. It refers to the many moving parts, their iterations and the multiplicity of actors in any given situation causing chaos, confusion, and a lack of mastering the intricacies to formulate cohesive responses. The higher the complexity, the more difficult it is to manage. In complex business environments, simple patterns combine and interconnect in multiple ways that result in disruptions, convolutions, and information overload.
Internal and external corporate environments have become more complex, as globalisation and technology increase both the volume and the rate of networking to fashion out what is referred to as wicked problems (those without simple, clear or lasting solutions) for decision-making. The tsunami of convolutions may create high levels of disorder that can overwhelm decision-makers. Complexity is one of the greatest challenges facing most leaders today, and it has the greatest power to influence the other VUCA elements by making them worse.
Ambiguity relates to a situation where multiple interpretations are permitted and equally valid, making it arduous to decide on an appropriate line of action to attain a desired result. The current organisational reality is blurred with mixed meanings – multifarious and opaque – leading to a lack of concrete knowledge or solutions due to ambiguity. In ambiguity, lack of clarity due to the many competing narratives, perspectives and interpretations is compounded by a lack of understanding due to the novelty of the innovation or market, which leads to leader-distress.
There are six key megatrends within the VUCA world among organisations today. These include accelerated globalisation, digitisation & digitalisation, environmental catastrophe, changes in demography, technological convergence, and value multiplicity. These megatrends and increasing disruptions significantly affect organisations in several areas, thereby upsetting stable operations and well-defined decision-making matrices. Despite the evolution of leadership styles over several years from command and control to transformational leadership models, organisational leadership in the VUCA environment is in desperate need of reform.
Larger organisations, by way of size and scale, are unable to break away from tried and tested methods whereby visionary leaders with followers work toward a common goal to ensure the delivery of set performance targets. In the midst of the current VUCA world, the known conventional and linear leadership models have become difficult for leaders or obsolete in their efforts at practicing the tried and tested leadership strategies in this changed and/or rapidly changing corporate world. This calls for strategic approach to leadership among organizational executives. But how?
Nuts and Bolts of Strategic Leadership in the ‘V.U.C.A’ world
Strategic leadership can be described fundamentally as the leadership approach that is conscious and aware of the extant challenges at all times – able to envision the future and proffer or adopt progressive strategic measures in creating symbiotic relationships among all stakeholders (Board, Management, Staff, Clients, Partners, Regulatory agencies, etc.) toward sustainable growth and survivability in the long-term. To surmount the ever-numerous challenges of the VUCA world, organisational leadership requires focus and consciousness at all times on the following:
Leadership and Constant Readiness
The VUCA environment and leadership success requires a form of readiness in which leaders must possess the enthusiasm to pursue excellence despite the odds. With only 18% of leaders being ready to lead in a VUCA world (according a 2020 Research outcome from MIT Sloan Institute of Technology), readiness becomes a critically necessary competence for leaders in the 21st century. Readiness is an open disposition where leaders must have the capacity to work effectively with the competing narratives, dilemmas, tensions and differences of opinion present in VUCA business environment.
Having an open disposition implies a situation where a leader is able to remain comfortable in difficult situations and committed to live and work through complexity, paradox and ambiguity in a non-defensive manner. More often than not, there is confusion with conflicting tensions in an unstable situation and, often, clarity and performance can suffer if teams are not ready and expectant of the volatility, uncertainty, complexity and ambiguity which come with VUCA challenges. To weather the storm that VUCA challenges present and to manage crisis efficiently, both leaders and employees must be ready to balance the opposing demands and act decisively. Decisive action, maturity and calmness symbolise a readiness culture in turbulent environments.
One of the success factors for leading in a VUCA world is the competency to anticipate, sense and respond to changes – which implies that leaders should be ready to modify with shifting circumstances and define winning parameters in agile and innovative ways. To do this in a VUCA world, leadership and team members should bring their minds, hearts and souls to work to excel in a quickly transforming environment and remain resilient. Essentially, to be fully present or have readiness requires possessing self-control in stressful situations through cognitive readiness.
Cognitive readiness includes situational awareness, attentional control, metacognition, sense-making, intuition, learning-agility, adaptability, dealing with ambiguity and managing emotions. Despite the extensive scope of these cognitive-readiness elements, it is imperative for leaders to competently articulate them to be able to systematically anticipate ‘wild cards’ and ‘black swans’ in VUCA environments. Readiness prepares leaders and their teams for the novelty and stress-related issues present in a VUCA world. Leader-readiness in VUCA environments enables antifragility and resilience in the face of tremendous pressure.
“The pace of change is faster; and while you don’t have to know everything,
you do have to know how to get it. The commitment to being a life-long learner,
I think the premium on that is much higher now for our leaders.”
……William Rogers, CEO-SunTrust Banks
The Growth Mindset
Organisational leadership, now and in the near-future, requires all leaders to strive and promote a growth mindset among their teams, which entails a way of viewing challenges and setbacks. Leaders and their teams who possess a growth mindset are those who believe that even if they struggle with certain skills, their abilities aren’t set in stone.
They think that through adaptation and working smart, their skills can improve over time… whereas leaders and teams with the opposite belief – fixed mindset – argue that abilities are what they are and won’t change. They think their skills won’t improve no matter how hard they try. Having a growth mindset will reap real benefits, as it helps organisational leadership and teams to reframe their approach to challenges and stay motivated to work on improving skills.
Building a Learning Organisation
Learning is an essential element for every field of life, and it is a life-time process. It is one of the foremost basics for the success of every organisation. According to Peter Senge, an American systems scientist and senior lecturer at the MIT Sloan School of Management), a learning organisation is:
“… a place where people continually expand their capacity to create results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning how to learn.”
Learning organisations are skilled in five main activities:
- systematic problem-solving;
- experimentation with new approaches;
- learning from their own experience and past history;
- learning from the experiences and best practices of others; and
- transferring knowledge quickly and efficiently throughout the organisation.
Each of these activities is accompanied by a distinctive mind-set, tool kit, and pattern of behaviour. Although many organisations may be practicing these activities to some degree, few are consistently successful because they rely largely on happenstance and isolated examples. By creating systems and processes which support these activities and integrating them into the fabric of daily operations, organisational leadership can manage their learning more effectively.
Cyberspace Security Awareness
The accelerated rate of resorting to using technological platforms to facilitate organisational operational activities, following the COVID-19 epidemic especially, has equally given rise to increments in cyberspace criminal activities. This growth of digital attacks signals that cybersecurity has risen to near the top of risks organisations face in an increasingly digital economy, thereby giving rise to the need for leaders to maintain vigilance by scaling up organisational security protocols to meet the threat.
As the value of data increases, the role cybersecurity plays in maintaining or sustaining organisational operations has equally grown substantially. To successfully cultivate new business relationships, organisational leadership must be able to protect both customer and employee data from breaches. This requires a comprehensive understanding of cyberspace security vulnerabilities and the methods threat-actors utilise to gain access to a network.
Ability to effectively manage these vulnerabilities not only enhances the cyberspace security systems/programmes, but also helps limit the impact of successful attacks. This is why having an established vulnerability management system has become a necessity for organisations across all industries. To achieve an excellent overall security posture within the organisation, cyberspace security vulnerabilities are extremely important for monitoring by leaders… as gaps in a network can lead to full-scale breaches of a system.
Strong Emotional Intelligence (EI)
Emotional Intelligence is basically the ability to recognise and understand one’s own feelings and emotions, as well as those of others, and use that information to manage emotions and relationships.
An organisation is made up of people; and when people are involved, emotions automatically come into play – and the workplace is not different. It would be unwise to assume that the workplace is an all-objective, no-emotion, only performance-kind of packed room where hormones have no scope to creep in. The current times are very dynamic – not just economically but also socially, wherein the social fabric is rapidly evolving due to globalisation and other influences. The workforce’s average age is reducing, and leaders now look forward to managing people belonging to different cultures and backgrounds. In such a situation, it is important for a leader to be highly sensitive to the emotional aspects of his/her relationships with people.
The H.A.V.E Skills
Leaders need to embrace H.A.V.E skills: which entails Humility – the ability to accept feedback and acknowledge that others know more; Adaptability – the ability to accept that change is constant and changing minds based on new information is a strength rather than a weakness; Visionary – a clear sense of long-term direction, even in the face of short-term uncertainly; Engaged – willingness to listen, interact and communicate with internal and external stakeholders, combined with a strong sense of interest and curiosity in emerging trends. These H.A.V.E skills further enable leaders to display: Hyperawareness (constantly scanning internal and external environments for opportunities and threats; Making Informed Decisions (making use of data and information to make evidence-based decisions); Executing at Speed (ability to move quickly, often valuing speed over perfection).
Having read and having been exposed to critical underpinnings of strategic leadership in the current VUCA world, it is over to you to exert the strong and committed strategic leadership effort whereby constant organisational readiness, technology savviness, building a learning organisational culture, development of growth mindset culture across the organisation, and the development of key strategic leadership skills are cultivated in order to succeed now and in the future. Further details on these dispositions can be found in my book titled ‘V.U.C.A World and the Future of Corporate Strategy and Leadership’
Victor is an Author, Strategic Leadership, Risk & Change Management Consultant & Mentor)