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Leading in VUCA World

LEADING IN A DISRUPTIVE, VUCA WORLD

“There are two things we can say with certainty about the future: it will be different, and it will surprise. Now, more than ever, leaders have to navigate unfamiliar, challenging times, a quickening pace of change, increasing expectations, and a rising tide of rapidly-evolving conditions. This new and different environment (VUCA) is challenging leaders to find new ways to lead their organisations and achieve sustained success. As a subsequent of these circumstances, there is a thirst for leadership, yet leaders face a whirlwind environment laden with remarkable opportunities and daunting challenges through which to lead their people and organizations.”

– Prof Sattar Bawany et al (2016)
2016 Research on Trends in Executive Development: A Benchmark Report

Introduction of VUCA: What It Means and Why It Matters

vuca world
Leading in a VUCA World

VUCA is an acronym that emerged from the military in the 1990s. It describes the “fog of war” — the chaotic conditions that are encountered on a modern battlefield. Its relevance to leaders in business is clear, as these conditions are highly descriptive of the environment in which business is conducted every day. Leadership as usual, including creating a vision, is not enough in a VUCA world.

  1. Volatile: Things change unpredictably, suddenly, extremely, especially for the worse.
  2. Uncertain: Important information is not known or definite; doubtful, unclear about the present situation and future outcomes; not able to be relied upon.
  3. Complex: Many different and connected parts: multiple key decision factors, the interaction between diverse agents, emergence, adaptation, coevolution, weak signals.
  4. Ambiguous: Open to more than one interpretation; the meaning of an event can be understood in different ways.

Leading in a world that is Volatile, Uncertain, Complex and Ambiguous (VUCA) not only provides a challenging environment for leaders to operate and for executive development programs to have an impact: it also provides a much-needed range of new competencies.  The new reality is resulting in the realisation that new and different capabilities are needed to succeed (See Figure 1).

Figure 1 – The Elements of VUCA Business Environment

vuca

Importance of Cognitive Readiness Competencies

In a VUCA world what is needed is Cognitive Readiness: the preparedness and agility to handle the situation at hand and still prevail. Chief among the new VUCA-related competencies that leaders need to develop are that of a high level of Cognitive Readiness, which is defined as the mental, emotional, and interpersonal preparedness for uncertainty and risk (Hagemann & Bawany, 2016).

Critical Thinking, the more common and tactical of the thinking skills, involves strategic thinking, creative thinking, problem-solving, and decision-making. It has been a hot topic for the past six years in the EDA Research on Trends for Executive Development. In the latest 2016 Survey, respondents also identified the importance of developing Cognitive Readiness in order to be able to effectively think critically.

Organisations are prioritising the development of Cognitive Readiness as the one of priority for leading in a VUCA business environment. This may reflect recognition of its importance for current and emerging leaders and a serious commitment to developing these mental capabilities, or it may simply reflect curiosity about the latest leadership development topic and a desire to avoid being left behind. Either way, two issues are present. First, organisations will need to think creatively about the processes they employ to accelerate the development of Cognitive Readiness in High Potential Leaders. Second, organisations may want to explain why, in practice, Cognitive Readiness is important to their success and then define in much greater depth their expectations of perspective.

Cognitive Readiness – Beyond Critical Thinking

Traditional Critical Thinking is the ability to recognise assumptions, evaluate arguments and draw conclusions. The traditional Critical Thinking competencies typically include strategic thinking, creative thinking, problem-solving and decision-making.

In the 2016 “Trends in Executive Development – A Benchmark Report” by Executive Development Associates (EDA) has defined Cognitive Readiness, on the other hand, as the mental, emotional, and interpersonal preparedness for uncertainty and risk. It complements Critical Thinking by emphasising non-rational, non-logical skills (Hagemann, Bawany et al. 2016)

EDA has defined the following set of Cognitive Readiness competencies (See Figure 2):

  1. Mental Cognition: Recognise and regulate your thoughts and emotions
  2. Attentional Control: Manage and focus your attention
  3. Sensemaking:Connect the dots and see the bigger picture
  4. Intuition: Check your gut, but don’t let it rule your mind
  5. Problem Solving: Use analytical and  creative methods to resolve a challenge
  6. Adaptability:Be willing and able to change, with shifting conditions
  7. Communication:Inspire others to action; Create fluid communication pathways

Overall, heightened Cognitive Readiness allows leaders to maintain a better sense of self-control in stressful situations.

Figure 2 – The Elements of Cognitive Readiness Competencies

readiness

“L.E.A.P.” through the Fog in a VUCA World

To lead successfully in the VUCA World, leaders need to LEAP through the fog and demonstrate the cognitive readiness competencies (See Figure 3) and also possesses the following traits (Bawany, 2016):

Figure 3 – Leadership Competencies for Managing the Challenges of a VUCA World

leap

Liberal: open to new behaviour or opinions and willing to adapt or discard existing values if and when necessary to adapt to the new world

Exuberant: filled with lively energy with sense of passion and optimism in engaging the team and other stakeholders

Agility: proficiently change and evolve the learning organisation with next generation leadership competencies including cognitive readiness, critical thinking and emotional & social intelligence amongst others.

Partnership: Build a trust-based partnership with teams (intra & inter) as well as externally with other stakeholders including customers and suppliers.

Masterclass for Leading in a Disruptive, Digital and VUCA-driven World

“It is evident that conventional leadership development practices are no longer adequate. Organisations globally need to incorporate the next generation leadership competencies in order to address the development needs of their rising leaders. This expanded group of upcoming leaders need to have a broader skillset, one that equips them to think and act globally in a VUCA business environment. They must do so while embracing cross-cultural diversity and cultivating collaborative relationships within and outside their walls. These are the hallmarks of the mindset needed to develop effective global leaders.

 – Prof Sattar Bawany, co-author, ‘2016 Trends in Executive Development: A Benchmark Report

Leading in a world that is Volatile, Uncertain, Complex and Ambiguous (VUCA) not only provide a challenging environment for leaders to operate and for executive development programs to have an impact: it also provides a much-needed range of new competencies.  The new reality is resulting in the realization that new and different capabilities are needed to succeed.

In essence, the heart of the managerial challenge that confronts today’s managers is learning how to lead in situations of ever greater VUCA business environment, allied with the needs to deal with scale, complexity and new organisational forms that often break with the traditional organisational models and structures within which many have learned their ‘managerial trade’. So the basic assumption that past experience is the key for future managerial success is more open to scrutiny than ever.

For further details on the Masterclass on Leading in a Disruptive and VUCA World, click here.

Conclusion

Leading in the future will revolve around managing challenges in a business environment that it is highly disruptive and predominantly volatile, uncertain, complex and ambiguous (VUCA). Technological advancements in artificial intelligence, robotics, sharing platforms and the Internet of Things are fundamentally altering business models and industries. These changes are taking place at unprecedented speed. Leaders at all levels need to develop the relevant competencies and skills to successfully adapt to new realities when leading in a disruptive VUCA World.

References

  1. Sattar Bawany (2016), “NextGen Leaders for a VUCA World: Transforming Future Leaders for Success” in Leadership Excellence Essentials, Issue 08.2016.
  2. Sattar Bawany (2016), “Leading in a VUCA Business Environment“, in Leadership Excellence Essentials, Issue 07.2016.
  3. Bonnie Hagemann, Sattar Bawany et al. (2016), Research on Trends in Executive Development: A Benchmark Report, published by Executive Development Associates (EDA); Pearson TalentLens and Performance Assessment Network (PAN), February 2016.
  4. Bonnie Hagemann & Sattar Bawany (2016), “Enhancing Leadership and Executive Development – Latest Trends & Best Practices” in Leadership Excellence Essentials, Issue 03.2016.
  5. Sattar Bawany (2014), “Building High Performance Organisations with Results-based Leadership (RBL) Framework” in Leadership Excellence Essentials, Issue 11.2014.

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