Leading Through VUCA (Volatility, Uncertainty, Complexity, and Ambiguity)
Most likely, you are familiar with the acronym, VUCA, which stands for volatility, uncertainty, complexity, and ambiguity. It was first used by the US Army War College to describe the contemporary battlefield. More recently, VUCA has been widely used to describe the changing landscape of business. Even as companies across sectors began expanding their capacity to be effective in VUCA environments, most did not have the threat of a global pandemic high on their list of imminent threats.
The good news is that most of the approaches and best practices that support success in garden variety VUCA can also help you, your leaders, teams, and entire organization find your way through the current COVID-19 crisis. In this article, I highlight how you can identify which of the elements of VUCA are most relevant to your business challenges and share some best practices that can be effective in this unparalleled situation.
Before I breakdown the VUCA elements, it’s essential to understand what we mean by leadership in a VUCA environment.
The Agility Shift starts with expanding our understanding of what it means to be a leader.
Everybody is a Leader in a VUCA Environment
When things are changing rapidly, there is no time to run every challenge or opportunity up through the chain of command.
As I define in The Agility Shift, “an agile leader is anyone who spots a challenge or opportunity and effectively responds.” This definition expands the understanding of leadership from the command and control model of yesterday to one focused on communication, collaboration, and coordination. No longer is leadership designated by your job title, compensation package, or place in the org chart. In VUCA environments, everyone is a leader. Everyone must be empowered to act to serve the customer and the needs of the business. This, of course, does not mean opening yourself up to a free-for-all of decision-making and action. It has to include an intentional shift and support, including clarified decision rights along with removing roadblocks to decision-speed.
Which Aspect of VUCA Do You Prioritize?
To understand the leadership implications of VUCA, you need to identify which of the four characteristics are most relevant to your current situation. While the pandemic is likely affecting most aspects of your business, there will be some elements of the impact that are more challenging for you than others. The VUCA matrix below, first proposed by Bennet and Lemoine (2014), may help you identify which aspects are most relevant and challenging to your organization. Once identified, you can focus on your leadership priorities:
VUCA Examples
In the next section, I share a range of examples that fit each aspect of VUCA. Some of these examples could easily fall into more than one category. For example, the “Timeframe and impact of the current conditions are unknown” can be a sign of Ambiguity, as well as Uncertainty. Don’t get too caught up in teasing out the category, but focus on the aspect of VUCA that is most challenging for you and your colleagues. Pay particular attention to those that are a result of the COVID-19 outbreak. Remember, these may include both unexpected and unplanned challenges, as well as opportunities.
Ambiguity
•Timeframe and impact of the current conditions are unknown
• Moving into a new market
• Launching a new product, creating a new strategic alliance
• Expanding beyond your core competencies
• Big leadership or organizational changes
Complexity
• Doing business in global markets
• Multiple stakeholders with competing or shifting priorities
• Multiple brands, products, supply chains, distribution channels
• Current conditions will greatly impact your entire business eco-system
Uncertainty
• Competition is launching a new product/service and the impact on the market not known
• Uncertain impact on the availability of key resources, including capital, skills, knowledge, and talent
• Past supply and demand metrics may not apply
• Merger/Acquisition MAY be on the horizon
• Proposed legislation/regulations MAY be adopted
Volatility
• Natural disaster
• Global health crisis
• Supply chain disruption
• Labor dispute
• Technology breach
• Geopolitical instability
• PR/Ethics Scandal
Of course, each of the four characteristics of VUCA rarely happens in isolation. For example, you might be experiencing volatility and complexity at the same time. In the good old days (a few short months ago), I would have mentioned something like a sudden change in leadership at the same time as your competitor launches a new product. Today, it could well be some combination of all four, with uncertainty about the degree of impact this volatility will have not only to your own organization but to those of your suppliers, customers, and the entire eco-system in which you do business.
Think about which of these examples and characteristics, or VUCA combinations, best describes your business eco-system and current reality.
Discuss with your colleagues: Which VUCA characteristics are most relevant to the challenges and opportunities you are confronting in your organization? Department? Team? Your role as a leader?
Make Shift Happen
Now that you have identified the characteristics of VUCA that are most relevant to your current situation and before you start thinking about specific strategies and tactics to be effective, you must make the mindset shift to ensure you are setting yourself up for success.
Mindset Shift: From Planning to Preparing
In stable contexts, we can rely on the tried and true practices of planning and analysis. When the future, not to mention the present, is uncertain and unpredictable, we must make a mindset shift toward preparing and enter a state of readiness.
Just as improv performers, athletes, and SWAT teams train and prepare for various high-stakes, high-stress scenarios, you can expand your capability and capacity to be effective when things don’t go as planned.
The best practices below fall into two key and interdependent categories: 1) People and talent development strategies and 2) Systems and processes. They are interdependent because you can have the best systems and processes in the world, and if you have not developed your people to make the necessary mindset and skillset shift, you will be disappointed in their performance when it counts most.
Leading Through VUCA Best Practices
As you read the following best practices for leading through VUCA, pay particular attention to those that are within your span of control or influence, and that will have the most immediate positive impact on your customers and business sustainability.
Volatility
Characterized by an unpredictable, unstable situation, though not necessarily complicated. Information is available as events unfold.
- Promote and train for role elasticity and develop “generalizing specialists.”
- Improve decision-speed
- Build redundancy into your system and build slack into the supply chain
- Leverage technology and alternative strategies to ensure continuous communication, collaboration, and coordination
- Focus on learning and capacity building by identifying what you are learning and how you and your customers are changing through the volatility
- Regularly train for various disruptions, and ID needed skills, knowledge, and talent, as well as other critical business continuity factors
- Tap your hi-potentials for temporary assignments
Uncertainty
Characterized by a lack of key actionable information, such as timing, duration, cause, and effect.
• Tap your Relational Web of skills, knowledge, talent, and resources to:
- Reduce uncertainty
- Gather additional information and insight, including customer data, market analytics
- Improve access to market insights via resources like slack and yammer
- Reflect on and share experiences of successfully working through uncertainty
• Identify the givens of the current situation and focus on what is within your span of control
• Provide or seek career-pathing and “stay interviews” so you can identify people’s interests and strengths to keep them engaged
• Implement agile performance appraisals and regularly provide feedback and acknowledge agile success
Complexity
Characterized by an overwhelming amount of information, interconnected or moving parts and relationships.
- Improve communication, collaboration, and coordination
- Clarify decision-rights
- Adapt organizational structure and expertise to match the complexity of the context
- Identify people who have strengths and experience in dealing with complexity
- Recruit and develop people who can thrive in complexity (See The Agility Shift, chapters 8–9).
Ambiguity
Characterized by a lack of information and precedent, making the ability to predict the impact of actions a challenge.
- Create (some) clarity
- Make space for interactions
- Re-engage and recommit to your purpose
- Understand and prioritize user (customer) needs
- Focus on your MVP (Minimal Viable Product)
- Practice rapid prototyping to fail faster and learn quicker
- Experiment and pilot to discover what you don’t know
- Make time to learn the lessons from experience and carry them forward
There is, of course, no clear roadmap that guarantees success through this pandemic. These ideas are not intended as a prescription for the challenges and opportunities that are most pressing for you and your fellow agile leaders at this time. However, they can help you get the conversation started and lead to thoughtful strategic and tactical approaches that build your competence, capacity, and confidence to lead through this unprecedented time of VUCA effectively.
How are you and your colleagues and customers leading through VUCA?
Bennett, J. and Lemoine, G., (2014) What VUCA Really Means for You, Harvard Business Review, January-February Issue.
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Pamela Meyer, Ph.D., is the author of The Agility Shift: Creating Agile and Effective Leaders, Teams and Organizations. She works with leaders and teams across industries who need innovative learning and talent development strategies to make the mindset and business shift to compete in a rapidly changing marketplace. In addition to a range of complementary resources, available on her website, including the Agility Shift Inventory, she has recorded several mico-webinars (20 mins or less) to help leaders improve their agility during this challenging time.
Contact Pamela Meyer, Ph.D., to Learn More About Leading Through VUCA and other Agility Shift strategies.