How to Stop Worrying and Learn to Love VUCA

Coming up with an effective strategy has always been considered the highest form of managerial art. Often, people actually believed they would implement it….

There are lovely methodologies. Basically they all work along the following lines: we are here, everybody else is there, we need to go to this new place, and this is how we will do it.

But now, we live in an environment our military friends affectionately call VUCA (volatile, uncertain, complex and ambiguous), which is a nice way of saying: we cannot be quite sure where we are; we cannot really know where everybody is; it is unclear who/what matters; it is unclear where the best place to go is; and we know that once we start moving everything is likely to change. Now, how is that for a mess?

Strategy: toss the map, bring in the thinking tool

We see two reactions: “Let us tidy up this mess and get on with it as we always have” – which everyone basically knows doesn’t work but is so alluringly tidy.

The other is “We can’t sort the mess, but were going to get bloody good at strategizing. In other words, our strategy is not going to be a roadmap, it is going to be something that helps us understand better, think faster and make the best decisions – whatever happens.”

Winning in a VUCA environment is a mind game at least as much as a question of good execution. Organizations must help their people to develop “supple thinking”, one that can anticipate shifts, creatively adapt and rapidly make powerful decisions.

How do you do that?

The US military certainly has had some very tough challenges in the past decade or so. To their enormous credit they have completely rethought the way they deal with strategy and which purpose it serves. And we think that this new approach is very appropriate for any large, complex organization.

You create a “strategic narrative”. Think of it as a vessel within which various strategies can be developed, tested and adapted. The narrative consists of:

The fundamental goals of the firm and the values it will hold itself to

Rich models of the current structure of the enterprise (with key variables identified, and assumptions stated)

A description of the systemic nature of the enterprise and its operating environment

A depiction of the key causal correlations between the firm and the systemic “currents” that impact the business

The purpose of the narrative is to help people understand the dynamic, non-linear, systemic nature of the business. It should prepare them for change, possibly even disruptions that will require shifts in the way they think about the business.

From the Top: Supple Thinking

Executive thinking provides the cues to the rest of the organization for how to think. That thinking is often quite rigid, locked into well-honed mental models about the business and how the “world” works. After all, this is the thinking that made those executives successful. These models usually have clear, linear and direct relationships – unfortunately, everything a VUCA environment does not provide.

This is why the dynamic modeling part of the strategic narrative is so valuable. It visualizes non-linear and often unexpected relationships. It heightens awareness about and improves understanding of the non-linearity of today’s operating environment. It helps executives develop supple thinking – thinking that can anticipate changes and adapt to them with ease, grace and power.

This is the foundation to making a firm a formidable opponent: fast, agile and resilient.

BUT, and this is a really big BUT

This will only work if leaders are willing to change. They have to

Be willing to systematically challenge assumptions. No more echo chambers, vigorously resists the temptation of group-think.

See it as one of their most important roles to foster mental agility so that the firm can recognize and integrate non- linear feedback mechanisms.

Take the issue of diversity – mental diversity – very seriously. Supple thinking relies on multiple perspectives and thought patterns.

Accept that once implementation starts, things change. Such is the nature of VUCA. Leaders have to be willing to adjust implementation as the non-linear feedback loops start kicking in – without appearing irresolute.

The development of the narrative is a highly iterative process. As members of the organization, consultants and experts interact, their understanding increases, leading to new insights, changing their views of the business. This cycle has to be repeated until knowledge and understanding are sufficiently rich and stable. “Strategic patience” is required for this process to be productive.

Once formulated, the narrative and plan must be sold to the organization and outside stakeholders, and stay in place long enough to succeed.

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