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Many organizations and managers are struggling to stay afloat and aligned in the volatile, uncertain, complex, and ambiguous nature of today’s global business environment. Turbulence—the rapid rate of change—is swirling around many of us, tipping us this way and that as we attempt to navigate a safe passage through it all.1
As an executive educator, I have been watching how companies and employees cope with the dynamism that defines the VUCA world. Over the last few years, I have been offered a unique window on how two different managers attempted to adjust to increasing turbulence in their company’s business environment, with dramatically different results for them and their organization.
The VUCA World
Volatility—The nature, speed, volume, magnitude, and dynamics of change
Uncertainty—The lack of predictability of issues and events
Complexity—The confounding of issues and the chaos that surrounds any organization
Ambiguity—The haziness of reality and the mixed meanings of conditions!
As a backdrop, the two managers work in a company providing professional services to a market segment that has been growing rapidly and globally. As the overall global business environment grows increasingly complex and competitive, many organizations of nearly all sizes are recognizing the need to avail themselves of these services. Moreover, the wave of new regional and global aspirants emanating from emerging markets, which in the past have dismissed the need for such services, are developing into a real growth market, with all the opportunities and challenges that accompany working with different cultural norms and, in some cases, markedly different business models. After bouncing around in low growth for much of the 2000s, this service-providing organization has seen double-digit YoY growth in the last three years as their customer base emerges from the recession and faces even greater growth and organizational challenges from the VUCA world.
On the downside, this particular segment is very fragmented with no major provider accounting for more than 5% of the market; it is also highly substitutable, with several different types of providers ranging from large and established, to small or one-offs; and it is more competitive, with new entrants from different sectors and now from emerging markets as well. Moreover, the segment has not developed clear-cut “gold standards” for what constitutes a high-quality customer experience. In a space which still contains some alchemy, one buyer’s “wow” might be another’s “ho-hum.”
Furthermore, the segment is a high-touch, relationship-oriented business which still suffers from a dearth of experienced professionals on either the provider or the buyer sides. Many players are still in “learn” mode while they seek to professionalize, especially on the provider side, where employees must master multiple skills sets very rapidly to keep up with the steep and increasingly dynamic growth opportunities. In fact, like other fast-moving organizations trying to keep pace today, working in this company has been characterized as being in a “permanent nose-bleed learning environment.”
Partly as a reflection of this, the provider’s senior leadership changed about three years ago, with a new Chief Operating Officer (who is the chief executive of the unit) coming in from a much more established competitor. This COO brought a game plan that featured several critical changes to the underlying business model, as well as an ambition to grow the business both financially and globally faster than it had ever done.
Finally, this service provider’s overall holding company has, itself, been on a pretty turbulent ride over the last decade, with several “spiky” financial and organizational challenges at the macro level. This has combined to produce a situation where the service provider has had to operate in an extremely “VUCA” organizational climate even while working with its clients’ own VUCA business environments. In other words, for both good and bad, this service provider has been sailing through high seas almost continuously for several years, and has many bruises to show for it. By the same token, many of its leaders have had to develop the kind of adaptability that it takes to thrive in a VUCA world or move on.
Drawing lines in the sand…
Both leaders in my mini-study are managers of others, leading client-facing teams. The first, a seasoned veteran of the field who had joined the organization in the mid-2000s, functioned as a team leader with responsibilities for business development, client management, and overall engagement delivery. This manager’s reputation for being a straight talker, a quick decider, and for having a strong sense for the “numbers” of the business, quickly rendered him a more senior role among his peers on the larger management team. Moreover, his steady ability to provide clarity and direction was popular with his direct reports and made him a charismatic team leader. This manager always seemed to have a clear explanation for things; to ask the straightforward questions of more senior managers when necessary; and to have an action-oriented bias that focused his team strongly on results. The combination of these qualities had a significant impact on this manager’s ability to deliver above his target a few years ago, and led the organization to increase the size of his client base and to raise his salary accordingly. He seemed on his way to bigger things.
With the onset of the recession, the organization’s business environment became increasingly turbulent, with some clients cancelling or postponing contracts while new opportunities required more economical models. As was the case for many companies, the business environment following the recession transformed into a “new normal” that became increasingly reflective of the conditions of the VUCA world—new, exciting, and challenging opportunities combined with much more severe turbulence in terms of client expectations, pricing constraints, emerging competition, and greater complexity all across the acquisition and delivery of services. It was clear that the organization would have to flex dramatically to adapt to these new and fluid market conditions and that its leaders would need to pave the way by demonstrating an ability to adapt themselves. The new COO was the embodiment of this style of leadership, providing a vision but empowering managers to broadly interpret it across their teams; restructuring the organization to provide for increased collaboration while encouraging competition; and openly embracing the new complexity and ambiguity in the market.2
…leads to a Failure to Adapt
In his series of blogs in HBR in late 2010-early 2011, the late former US Army Colonel Eric Kail outlined adaptive leadership tactics for operating in a VUCA world as follows:
For Volatile Situations…
For Uncertain Situations…
For Complex Situations…
For Ambiguous Situations…
While his advice was constructed within the context of small-unit combat activities in the military, I believe it is easily convertible into applications for all organizations.
During the COO’s first several months, this manager emerged as quietly skeptical of the new strategic direction and of the organization’s perception of changes in the external business environment. He started resisting the need to adapt, retreating instead to the apparent safety of tried-and-true business models. He clung to past measures of success and failure despite evidence that some were no longer applicable or, worse, had become roadblocks to future growth. He also refused to learn new skills, acting as if the new tools introduced by the COO were unnecessary even to target a new, more complex set of client opportunities that were presenting themselves. Once open to many other employees in the organization, he began to divide them into “friends and foes” while steering his team in its own direction within the larger organization and actively discouraging collaboration. Seeing the world through a distinctly black-and-white lens, he argued that “ambiguity” was being used to mask problems that could be solved by bold, decisive leadership and that the real way to lead in the VUCA world was to draw some lines in the sand and stick to them. What had once been conversations turned into one-way diatribes, as the manager seemed bent upon demonstrating that he had the answer for everything.
Despite mentoring, this manager, who has since moved on from the organization, basically became an oar rowing hard the other way. For a time, his ability to focus attention on legacy clients in the “tried and true” business model helped meet revenue goals, but this masked how the failure to adapt to new skill sets and more complex client situations would eventually erode the team’s topline performance. Team members, initially energized by this manager’s clear, declarative, top-down leadership style, gradually became confused about direction and disconnected from others in the organization. The manager’s sharp-edged, “us versus them” stance put most of the team in difficult situations, eventually causing many to become part of the “them” as well. Lapsing into constant “tell” mode, he basically stopped listening to anyone except the echo chamber provided by close allies.
What happened to this particular manager? Was it just a question of a bad fit; the kind of thing that could happen in any organization? The answer is “yes,” to some degree, but in a larger way, the real issue was this manager’s unwillingness to adapt to the increasing turbulence faced by this organization. The heart of this, in the eyes of many in the company, came from a fear of failure, which undergirded the refusal to want to change, to try new approaches and learn new skills, and to accept that the world has become a much more turbulent, complex place where some leadership styles were now outmoded. Was this manager self-aware? Colleagues did sense some inner struggle on his part at times, but in the end, it seemed as if his ultimate point of self-reflection was to tell himself he was always right.
…while Checking One’s Ego…
Contrast this with that of another manager of others at the same organization whose essential ability and willingness to adapt has had a much different and more beneficial outcome for the organization and its employees. This manager, who had nearly 15 years of management experience under his belt, had actually held a leading position in the organization for several years before stepping aside four years ago to address some personal needs and then shifting to a lower-level management position.3 For some months, as could be expected, there was skepticism elsewhere in the organization that this “experiment” would work; as well as “office cooler“ predictions that this person’s ego or legacy from managing at a higher level would quickly get in the way. There was also doubt that this person, as an “older dog,” could “learn the new tricks” it would take to perform across the much more demanding level of skills that the organization’s new leader was requiring.
But from the get-go in the new mode, this manager plunged into the world of adaptability and essentially re-tooled himself for a business model that required at least 4X the skill set bandwidth and another 4X the span of control, compared with before the COO had joined. It seemed like slow-going at first, largely due to the drag coefficient associated with concerns about the person’s ability to “step down” from his previous role. However, this masked a determination by the manager to find a way to refit into the organization and to leverage the new dynamics introduced by the COO as the vehicle.
So, what did this manager do to adapt to leading in a VUCA world?
Countering VUCA: VUCA Prime
“We are moving from a world of problems, which demand speed, analysis, and elimination of uncertainty to solve, to a world of dilemmas, which demand patience, sense-making, and an engagement of uncertainty.”
Countering VUCA requires:
Vision - an intent that seeks to create a future
Understanding - the ability to stop, look, and listen
Clarity - the ability to help make sense of the chaos
Agility - organizations where ”wirearchy” is rewarded over hierarchy
One might posit that these are traits of good leadership in any situation, not just for the VUCA world. I agree, but I think they are particularly valuable in turbulent times, where so much of what is traditionally available for leaders to judge themselves upon falls away or is dangerously outmoded. Perhaps at the heart of this leader’s success in adapting has been his growing sense of self-awareness over the last several years. Known as someone who had very carefully guarded his life and reactions, this leader took the opportunity of the position change and new organizational direction to re-examine some core values and re-align career goals, shifting flexibly within the avenues for each that the increasing turbulence offered. Grounding one’s self in who one really is in this world and what one wants to stand for as a leader are also even more essential to leading in a VUCA world, where one’s moorings need to be as steady as a buoy, especially in stormy waters.
…led to an Engaged and Impactful Leader
So, what have been the results of this leader’s adaptation? Being able to let go of many past measures of success has allowed the leader to be open faster and more agnostically to new performance imperatives from both the client base and from within the organization. While this manager still has some business growth goals to meet, he has re-oriented much of his portfolio growth strategy toward more complex and risky, but more lucrative, potential client engagements—the kind that are the future of the business. He has also steadily embraced new performance measures by trying to put personal insecurities aside and bring humility to his development. Similarly, his ability to embrace working with the contradictions and paradoxes that often accompany uncertainty and ambiguity has helped him keep his team fully engaged in the organization’s vision and strategy.
Keeping his ego in check in the face of an extraordinary career move and demonstrating a keen desire to keep learning has gradually earned him newfound respect from others in the organization—a crucial characteristic for VUCA times when employees are constantly looking for leaders who can acknowledge their own imperfections and willingness to try to address them. Moreover, the active learning “gene” has helped the manager get the new skill sets under his belt as well as to be a role model, first for his team, and gradually for others. Indeed, the ability to embrace learning, “un-learning,” and “re-learning”5 is critical for leaders in the VUCA world, where many bodies of knowledge are changing so fast and information and insight becomes irrelevant quickly.
Finally, this leader’s ability to remain open and welcoming to everyone in the organization—another practice that is grounded in humility and self-awareness—has resulted in the gradual gaining of trust and a spread of this manager’s influence with many employees, peers, and bosses. This, too, has been critically important to the organization’s overall leadership posture in VUCA times, as employees look for leaders to be available and to communicate often and honestly; as peers look to each other for ideas, support, and easy collaboration; and as senior leaders look for ideas, honest feedback, and clear input into, and loyalty toward, the vision, mission, and strategy.
This leader has some distance yet to go in adapting his leadership for VUCA times—no question—and he admits to it. Goals include further enhancement of some critical skill sets that essentially require facing up to longstanding insecurities about innate abilities, as well as continued shaping of his communication style toward more “straight-shooting” and away from the kind of “sugar-coating” that has, in the past, left some to doubt the intent and value of his comments. Leaders who hold back out of fear and whose words are discounted or interpretable are in danger of being rip-tided in VUCA times.
Still, this leader has made enormous strides toward adapting to VUCA times, and is increasingly making a positive impact on the business and organizational culture, with their attendant personal rewards.
Addressing the Challenges of Adaptability
The need for humans to adapt is nothing new and, indeed, those who point out that humankind has faced even more dramatic adaptation imperatives in the past are no doubt right. That said, we are where we are in the history of human development and in the scope and pace of dynamic change in the marketplace and in our organizations. A failure to meet the challenges will leave many companies behind and the human capital potential of their employees unfulfilled.
At Thunderbird Executive Education, we work with globally focused companies and organizations from many industries and fields of endeavor to help their leaders develop or further enhance their ability to adapt to turbulent times. We help leaders become more comfortable and agile with ambiguous and seemingly contradictory demands through focusing on managing paradoxes. We focus on the skills and mindsets that it takes to move nimbly and often without specific authority in making fast decisions through influencing and networking. We address the need for speed and for bringing all applicable resources to bear for impact in collaborating across silos. And, we focus on the self-awareness, reflection, and the need for quick recovery from failure in sessions on resiliency. Above all, we help leaders embrace amindset of change that is so critical in navigating the turbulent times of the VUCA world.
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1. Some observers downplay the concept of VUCA, claiming that there is no way of knowing whether or not these times are any more turbulent than many in the past. Research by the Boston Consulting Group, published in The Most Adaptive Companies of 2012, points out that from 1980 to 2010, companies faced an increasingly rapid rate of change that was more dynamic, taking place more often, and longer lasting.
2. For more on the role of a senior leader in a VUCA-driven organization, see pages 159-164 in Light Footprint Management: Leadership in Times of Change, by Charles-Edouard Bouée, Bloomsbury, 2013
3. In retrospect, this act pointed to a predisposition to the kind of adaptability it would take to thrive and lead in an organization facing a VUCA world.
4. See pages 120-125 in Light Footprint Management for more on the paradoxes that characterize organizational balance in the VUCA world.
5. See, for example, Chapter Two: The Social Brain in a VUCA World, in Maximizing Business Results with the Strategic Performance Framework: The Cultural Orientations Guide, Sixth Edition, by Putz, Schmidt, and Walch, the Training Management Corporation, 2014