“The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn.” ~ Alvin Toffler
I have a client who was on track for a 150% increase in revenue for 2020. Then within 2 weeks almost the entire events industry went bust and they lost 98% of their business. They needed to have agile leadership immediately.
As we all know, the world has changed dramatically over the last few months. We’ve had a perfect storm of the Covid-19 pandemic, oil fluctuations, economic slowdowns, protests, riots and more! We have also had rapid technological advances, innovation, and lots of pivoting.
And yet, we still don’t know how long it will take to pull out of this, if our schools will be open in person or virtually, if our businesses can survive in this, how the economy will be if we have to shut down again. This time is full of volatility and uncertainty. How do we lead when we don’t know what’s coming?
What is VUCA?
This type of environment can be described using the VUCA acronym. VUCA was first used by the US military after the 9/11/2001 attacks when the US was in the middle of a lot of unknowns. And now the whole world is in a VUCA environment.
- Volatile – change is fast and unpredictable
- Uncertain – we are unclear about what is happening now and we don’t know what’s coming in the future
- Complex – many different factors are interconnected and can affect each other
- Ambiguous – a lack of clarity or awareness about situations
I believe this particular VUCA environment is a HUMAN issue.
As Patrick Lencioni says in The Advantage, we need to have both smart and healthy teams. Smart teams focus on the output, the strategies, goals, execution. And this is absolutely needed! But a company needs to be more than just smart to be successful in a VUCA environment. They need to pay attention to their people. They need healthy people to run the business – and not just physically healthy!
Lencioni describes healthy as leaders who are aligned on the vision, feel like they “have each other’s back” (support each other rather than point fingers and blame each other), and they do not allow for gossip.
A company must be both smart AND healthy. If your people aren’t healthy, you won’t achieve your vision! Ask yourself:
- How am I taking care of my people and their needs in the midst of this uncertainty?
- Do our leaders have the skills to think creatively during chaos, the unknown, disruption?
- Do we have the agile thinking skills to determine what is controllable, execute on today’s priorities, see what changes could be coming around corners, synthesize the overwhelming amount of data into meaningful and actionable intelligence, as well as manage and influence relationships up, down, and across the organization?
- What can I do to help them gain these skills?
Here are 4 skills you can hone to lead in a VUCA world:
- Build Trust
- Embrace Change
- Understand Systems Thinking
- Ask Questions and Learn Quickly
1. Build Trust
Healthy teams are built on strong, trusting relationships. In a VUCA world where what we believed to be true is being challenged every day, having a reliable and accountable team in place is a tremendous asset.
A rapidly changing VUCA environment often forces teams to shift their priorities because of unexpected setbacks, all while trying to recover from the disruptions. By building up trusting team relationships, agile leaders are given more grace to fail (forward) by the team. The people are more willing to follow the leaders into the unknown. They can promote accountability and resilience to ensure their team members will be able to adapt quickly and pull together in the face of adversity to deliver high-quality results, no matter the circumstances.
How can you build this skill?
- Promote collaboration. VUCA situations are often too complicated for one person to handle, so, build teams who can work together effectively in a fast-paced, unpredictable environment.
- Reward team members who demonstrate the opposite of VUCA – they show vision, understanding, clarity, and agility (CCL article). Reward the behavior you want to see more of by highlighting innovations and calculated risk-taking
My client had to lay off most of her workforce. She chose the 10 most versatile people in her company to stay – the creative, loyal, problem solvers. They trust each other implicitly.
2. Embrace Change
Holding on with every last fingernail to the status quo in a VUCA world is a recipe for falling behind, if not the outright demise of your company. You can’t assume that we will “go back to normal.” Normal is gone. Today’s organizations must confront disruption by becoming more dynamic and adaptable to change.
Agile leaders have the flexibility and creative thinking skills to innovate, iterate, and explore new possibilities for how their company can pursue its goals. They understand the value of taking risks and aren’t afraid to experiment, to fail forward. AND they strike a careful balance between stabilizing the company while also pursuing growth.
How can you build this skill?
- Accept and embrace change as a constant – you can’t escape it. Don’t resist change, use it.
- Create a strong, compelling vision of the company’s future, company values, and team objectives and ensure they are shared with all.
3. Understand Systems Thinking
A key competency of agile leaders is their ability to see how the complex systems in their companies, industries and environments interact with one another. Understanding how changes to one of these systems could have an impact on others is critical when it comes to minimizing negative or unintended consequences.
In addition to consequences, identifying where the systems link up can also show opportunities. This allows agile leaders to respond quickly to changing circumstances rather than sitting back, feeling stuck, and waiting to see what happens, how others will respond.
How can you build this skill?
- Promote flexibility, adaptability, creativity and agility. Plan ahead, absolutely, and also build in some contingency time so you are prepared to alter plans if necessary as events unfold.
- Encourage your people to cross train, learn more, increase their knowledge and experience while on the job. This only helps the individual and the company, as well as improves team agility.
I have another client who makes luxury leather goods. They went from almost losing the company (who’s buying luxury items right now?) to thriving beyond all expectations because they saw the infrastructure of the supply chain they already have in place. They were able to guide everyone in that supply chain to pivot together to create PPE’s, Personal Protective Equipment, which are serving the greater good of the world. They are serving the world and making money as well.
4. Ask Questions and Learn Quickly
Information is vital to leaders in a VUCA world. Their ability to adapt and think critically depends upon their ability to recognize and interpret what is happening around them.
Since so little can be taken for granted, it’s important for agile leaders to constantly be asking questions and gathering data. This helps them keep their finger on the pulse of their organization, understanding what’s happening, ensuring they know their people, their numbers, and their current and potential issues. This enables them to make good, quick decisions.
How can you build this skill?
- Pause to listen and look around. This can help you understand and develop new ways of thinking and respond rather than react.
- Develop a collaborative environment, and work hard to encourage debate, dissent, participation and then consensus from everyone.
- Make investing in, analyzing and interpreting business intelligence a priority so you don’t fall behind. Stay up to date with industry. Listen carefully to your customers to find out what they want.
- Review and evaluate your performance. Ask for feedback (it’s scary, I know, but so worth it!). Consider what you did well, what came as a surprise, and what you would do differently.
- Anticipate possible future threats and determine how you could respond.
The CEO of one of another client routinely appoints a “Devil’s Advocate” in every executive meeting. That person’s job in that meeting is to ask tough questions and try to show that the proposed solutions won’t work. This ensures that they look at things from more perspectives and not just all agree with the CEO because he is CEO!
So, the 4 skills agile leaders use to navigate a VUCA world are:
- Build Trust
- Embrace Change
- Understand Systems Thinking
- Ask Questions and Learn Quickly
Agile leaders are well suited to the challenges of managing in a VUCA world. Their ability to connect, adapt, implement, build relationships, and inspire others enables their teams to work within an uncertain future by balancing competing priorities and executing strategies without compromising performance.
Ask another of my clients. 18 months of working with my firm, and the CFO said that they had a $677k operating profit difference for the first time in years. And the CEO said she truly believes they would have been out of business in this pandemic shut down, if they had not put the infrastructure in place that gave them the right leadership team who are able to work together to make the right decisions into and through this crisis.
To learn more about what my firm does to help business owners and their leadership teams, go to ApexCatalystGroup.com. Here’s to your success!
This blog comes from a speech I gave at the Women’s Economic Forum July 26, 2020, based in Bengaluru, India. Here’s a clip from that speech.
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