Leading in a VUCA World
The pace of change in the business world today is greater than our ability to cope with it. In a world that is described as VUCA (Volatile, Uncertain, Complex and ambiguous), there are major shifts that demand a new mindset of leadership.
In recent years, we have seen disruption of market leaders like Kodak, Blockbuster, Nokia, Blackberry amongst many others. Disruption is not new: more than 100 years ago, the Ford Motor Company made the automobile available to many, which revolutionized transportation — and disrupted a number of industries, including wagon and carriage businesses, and the makers of buggy whips. Disruption is a perennial concern for business leaders, who worry that upstart rivals are on the verge of disrupting their business models and unsettling their industry’s equilibrium. The fear of making the wrong choices leads some companies to strategic paralysis.
The industries that suffer most from disruption are those whose players have no real differentiation. For example, ride-sharing companies found it easy to disrupt the taxi industry because GPS systems and smartphone technologies had eroded the competitive advantage that the navigational savvy of taxi drivers used to hold.
Focusing on your distinctive strengths not only helps you fight disruption from new comers, but it also enables you to disrupt an industry on your own terms. That’s exactly what Netflix did. In the late 1990s, the company competed directly with the Blockbuster retail chain. In 2007, when streaming video became viable, Netflix rapidly pivoted to offer that service. It began creating programming of its own a few years later, and it has pioneered the use of artificial intelligence and machine learning to tailor its output to consumer interests. All along, its success has been enabled by a core distinctive strength: the ability to understand what its customers want and do, using in-depth analytics and the behavioral data it captures.
In this changing world, having a compelling purpose is a mandatory prerequisite for profits to follow. Traditional hierarchical structures are fading away to give way to purposeful networks and communities of people working together to achieve a shared purpose. The cumulative impact of these forces demands a new mindset and competences for leaders to be able to stay relevant and create a positive impact for people and businesses.
If you are a leader at any level in a modern organization or are aspiring to be one, here are some of the critical competencies and skills you need to develop in a VUCA world.
1. Develop an Adaptive Mindset: To navigate successfully the VUCA world, leaders will need to be comfortable with unclear situations and travel into unexplored paths. This means leaders will encounter “first time” situations more often and they need to build their muscle to still deliver results. With “rapid prototyping” approach (generally an approach that fits well with start-ups), leaders will need to constantly experiment to get early and frequent feedback that enables constant realignment (Fail Fast, Fail Often).
2. Have a Vision: Vision (with strong Values) is a everlasting force, a solid anchor that drives decisions, actions and judgments. With a workforce that is purpose driven, having a compelling vision for the future is also a key driver of engaging and retaining high performing team members. In fact, a compelling vision is an important prerequisite for any community or network to succeed. Leaders who will thrive in future are the ones who have a clear vision of where they want their organizations and teams to be.
3. Embrace Abundance Mindset: Abundance mindset sees possibilities where a constraint mindset sees challenges. A leader’s ability to spot "blue oceans", unique problems and connect dots is as critical in the new world as their ability to “do something about it.” In VUCA world, leaders have to listen to the future by constantly scanning the horizon, being future minded and having strategic foresight without losing the sight of the current reality. When they do this, leaders build a unique ability to see through contradictions towards a future others cannot see.
4. Nurture Ecosystems for Human Engagement: One of the biggest leadership challenges is to create an environment that intrinsically motivates people. Leaders can create organizations driven by human engagement, only if they understand their intrinsic needs: the need for trust, the need to have hope, the need to feel a sense of worth and the need to feel competent. We need leaders who can build trust through integrity and results, who can mentor and coach others, who can clarify the meaning of the work people do and build a positive influence.
5. Anticipate and Create Change: When changes around us are constantly and rapidly happening, leaders have to use their strategic foresight to “create change” before an external change forces them to react. When leaders ride the wave of changes, they have to involve people in the change process, prioritize what’s important and execute changes in smaller iterations. Leaders nurture change by maintaining balance between the needs of the context, needs of others and their own needs.
6. Self-Awareness: Leaders cannot succeed unless their personal vision and values overlap with organization’s vision and values. It is only when leaders are aware of their preferences, ways of working and possible blind spots that they can really bring their true authentic selves into the game and bring about a significant difference to the team, organization, the industry and the entire community.
7. Be an Agile Learner: In a rapidly changing context, leaders need to be able to continously learn and to be constantly curious and carry a “beginners mind” which is also willing to give up on familiar approaches (unlearning process). Tomorrow’s leaders need to be willing to stretch themselves out of their comfort zone and be open-minded enough to rapidly embrace new concepts and new unfamiliar situations.
8. Network and Collaborate: To make the sense of changing trends, practices and expectations, leaders in today’s world need to collaborate relentlessly within and outside the organization. A collaborative and network mindset enables leaders to create, engage with and nurture purposeful organizations and social networks through social media, digital platforms and in-person communication.
9. Relentlessly Focus on Customer: Customer centricity is and will remain at the heart of effective leadership. Helping customers navigate through the changes is as critical for leaders as it is to steer their own organizations effectively. Customer centric leaders truly “listen” to the voice of their customers, engage deeply and build long term relationship by adding substantial value to the customers (internal and external).
10. Develop People: Leadership in the new world is beyond tags and job titles. It is about serving effectively to the needs of multiple stakeholders – the most important ones being the people who make things work. Leaders have to model the behaviors they seek, help people in building their skillset and attitude, create learning forums, design work to tap into potential and lead through their influence and not through their authority. The primary task (and an obligation) of a leader is to build more leaders.
11. Design for the Future: Leaders are designers of the systems of the future. They do so by building an emotional ecosystem, clear organizational structures, methods and processes. If organizations are purposeful networks of people, leaders need a compelling purpose that people in the organization share. They will have to pay equal attention to leveraging diversity and draw on multiple points of views and experiences.
12. Constantly Clarify and Communicate: When working with global work force, leaders will need an ability to communicate effectively across cultures (including different personal backgrounds). They have to constantly clarify the current situation with respect to changing external demands, re-iterate and reinforce vision, values and strategies and help others in clarifying the meaning of their work. Communication and clarity are the currencies of effective leadership.
Surviving and thriving in a VUCA world also calls for a high level of resilience. Developing this depends on a combination of physiological, psychological, and organizational factors. For example, leaders need to pay attention to their physical health, develop confidence in their own abilities, and willingly seek the support of colleagues and friends.
If you feel your resilience as a leader could be improved, here are just a few questions to ask yourself:
– Have you have had the right amount of sleep for at least 10 out of the last 14 nights?
– Have you received and acted on developmental feedback at work during the last two weeks?
– Have you discussed a work-related stressor with at least one family member and one work colleague in the last two weeks?
– Have you exercised for at least 30 minutes, three or more times per week in the last two weeks?
– Have you avoided junk food in the last two weeks?
Of course, there are a huge number of factors to take into consideration. But looking at how you shape up against these questions will help you to start thinking about what you may need to do differently to improve your resilience in a VUCA world.
In the VUCA world there are no magic bullets. Successful leaders have always been adaptive to the context they find themselves in. The future is not a distant dream, it is here and now. Leadership today is all about shifting our mindset, values and organizations to a better and more abundant place.
1. Tanmay Vora, VUCA Sketchnote, Available on Internet (google images search)
2. Fail Fast, Fail Often: How Losing Can Help You Win by Ryan Babineaux and John Krumboltz, 2013
3. Disruptors and the Disrupted: A Tale of Eight Companies — in Pictures, Strategy+Business, 2017
4. Hult Business School Blog, Vicky Culpin, 2018