by Nancy Giordano (8 minute read)
Welcome to the age of increasing complexity, volatility, interdependence, diversity, ambiguity, flux and more. Bring it on…
Affected by many conflicting yet interdependent factors that demand constant adaptation and speed of response, organizations of all sizes are being required to deal with what are now very complex decision making environments. Companies are being challenged by unexpected competitors, attacked by cyber-criminals, and talked about by unpredictable customers constantly. Are most structures set up to deal with such a barrage?
“Look at why big companies die. They implode on themselves. They create all these systems and processes – and then end up with a very small percentage of people who are supposed to solve complex problems, while the other 90 percent of people just execute”. —Shari Ballard, now President of US Retail at Best Buy in the Ivey Business Journal
Can You Plan For A Future Of Uncertainty?
Described by Harvard Business Review as a “trendy managerial acronym”, VUCA is actually more than just the next new thing. It’s increasingly being used as a framework with which to tackle the volatile and chaotic business, economic, and physical environment we all now face. Mostly used by the military, it’s being adopted by many corporations to provide strategic leadership guidance, with a few firms like GE, Unilever, and McDonald’s changing their leadership development model to fit the VUCA environment.
“For most contemporary organizations – business, the military, education, government and others – VUCA is a practical code for awareness and readiness. Beyond the simple acronym is a body of knowledge that deals with learning models for VUCA preparedness, anticipation, evolution and intervention.” —Wikipedia
So how exactly does it break down?
- Volatility – where things change fast but not in a predictable trend or repeatable pattern
- Uncertainty – where major “disruptive” changes occur frequently. In this environment, the past is not an accurate predictor of the future and identifying and preparing for “what will come next” is extremely difficult
- Complexity — where there are numerous difficult-to-understand causes and mitigating factors involved in a problem
- Ambiguity – where the causes and the “who, what, where, when, how, and why” behind the things that are happening are unclear and hard to ascertain
All of which begs the question, can you actually plan for a future that’s so uncertain? Well, as shared in Harvard Business Review, two professors compiled a framework to help identify what VUCA really means for you by distinguishing between these scenarios and developing more relevant strategic approaches for each.
The Rise Of Super Humans
Wouldn’t it be handy if we could just tap into some hidden performance potential? Over the past 30 years, skiers, snowboarders, surfers and other action sports athletes have pushed human performance farther and faster than at any other point in the 150,000-year history of our species. The euphoric state of oneness, known as “flow” that comes with achieving peak performance was first identified by positive psychologist and social theorist Mihaly Csikszentmihalyi —and now is being scientifically decoded by Steven Kotler, co-founder and director of research for the Flow Genome Project.
Believing that achieving more flow is fundamental to our ability to better handle the demands upon us, Steven and his team recently opened the Flow Dojo, a facility in which they bridge the mainstream with the extreme, allowing anyone to experience a flow state. When you consider that the latest (staggering!) research on flow suggests you can be up to 500% more productive and between 200% faster than normal when in flow, management executives and others are beginning to use it as a tool to create enhanced work performance, greater clarity, and more powerful decision making.
Keeping it simple … in completely new ways
Successful businesses and beloved brands grew to great heights and revenue by building systems that simplified processes in order to scale them. Control, consistency, autonomy, centralized decision-making, focus on clear “KPI’s”, single-minded branding and communications efforts were the keys to their success. Yet, as we see now, these clever business systems no longer bring the rewards of the past. Senior managers are now urgently pushing to build more nimble, adaptive organizations.
Encouragingly, we have also have examples of flexible new global structures such as CrisisCommons, which musters volunteers to help out in natural disaster situations, mobilizing thousands of people with little top-down direction. And brave General Stanley McChrystal’s TED talk on listening, learning…and imagining failure.
Not surprisingly, as it gets more difficult to navigate the now dizzying array of complex performance and operational hierarchies, folks are, ironically, looking for simple solutions. Some argue that the only way to pursue innovation and improve productivity is to focus on a few simple things that can bring renewed direction.
“Managing complexity is a battle between emergence and entropy”
Right on! We see this struggle up close and personal in all the work we do and so are encouraged by the thinking Julian Birkinshaw, from the London Business School is evangelizing. He sums it up nicely in this recent Forbes article:
“Much of the advice out there is about simplifying things – delayering, decentralising, streamlining product lines, creating stronger processes for ensuring alignment, and so on. But this advice has a couple of problems. One is that simplification often ends up reducing the costs and benefits of complexity, so it has to be done judiciously…
But perhaps the bigger problem is this advice is all offered with the mentality of an architect or engineer. It assumes that Jamie Dimon was the architect of JP Morgan’s complexity, and that he, by the same token, can undo that complexity through some sort of re-engineering process.
Unfortunately, organisational complexity is, in fact, more complex than that. To some extent, organisations are indeed engineered systems –we have boxes and arrows, and accountabilities and KPIs. But organisations are also social systems where people act and interact in somewhat unpredictable ways. If you try to manage complexity with an engineer’s mindset, you aren’t going to get it quite right.”
Building this into organizational cultures will take time as it requires not only the adoption of new tools, but more importantly a shift in mindset from “being right” to a desire to navigate, orient and act with conviction even when all the pieces just aren’t clear. Changing any organization starts with changing our own individual approaches and beliefs about what success really looks like and the role we wish to play.
Nancy Giordano is a leading strategic futurist and popular business speaker. She is founder of the cutting-edge firm, PlayBig, Inc.