Adaptive leadership for the VUCA World: A case study of two managers (Part 1)

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By Nwaodu Lawrence Chukwuemeka

THUR, NOVEMBER 24 2016-Many organisations and managers are struggling to stay afloat and aligned in the volatile, uncertain, complex, and ambiguous nature of today’s global and local business environment. Turbulence—the rapid rate of change—is swirling around many of us, tipping us this way and that, as we attempt to navigate a safe passage through it all.

VUCA as a subject has been a theme of interest to leaders, managers and researchers in behavioural and thought management in these times of rapid and dynamic changes in the global and local business environment, providing knowledge and leads to practical questions and possible answers and divergent solutions. Especially as it relates to the business, socio-political and economic environment of Nigeria; with all that is going on here, it will take a deep insight in practical knowledge in solutions provisions in ever changing and unpredictable conditions and environment to survive and remain profitable as a business, and to remain resourceful and relevant in any organisation.

The deeper meaning of each element of VUCA serves to enhance the strategic significance of VUCA foresight and insight as well as the behaviour of groups and individuals in organisations. It discusses systemic failures and behavioural failures, which are characteristic of organisational failure.

These elements present the context in which organisations view their current and future state. They present boundaries for planning and policy management. They come together in ways that either confound decisions or sharpen the capacity to look ahead, plan ahead and move ahead. VUCA sets the stage for managing and leading.

The particular meaning and relevance of VUCA often relates to how people view the conditions under which they make decisions, plan forward, manage risks, foster change and solve problems. In general, the premises of VUCA tend to shape an organisation’s capacity to:

Anticipate the Issues that Shape Conditions

Understand the Consequences of Issues and Actions

Appreciate the Interdependence of Variables

Prepare for Alternative Realities and Challenges

Interpret and Address Relevant Opportunities

For most contemporary organisations – 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.

Failure in itself is not a catastrophe, but failure to learn from failure definitely is. It is not enough to train leaders in core competencies, without identifying the key factors that inhibit their use, the resilience and adaptability that are vital in order to distinguish potential leaders from mediocre managers. Anticipating change as a result of VUCA is an outcome to a resilient Leader. The capacity of individuals and organisations to deal with VUCA can be measured with a number of engagement themes:

Knowledge Management and Sense-Making, Planning and Readiness Considerations, Process Management and Resource Systems, Functional Responsiveness and Impact Models, Recovery Systems and Forward Practices, Systemic failures, Behavioural failures.

At some level, the capacity for VUCA management and leadership hinges on enterprise value systems, assumptions and natural goals. A “prepared and resolved” enterprise is engaged with a strategic agenda that is aware of and empowered by VUCA forces.

The capacity for VUCA leadership in strategic and operating terms depends on a well-developed mindset for gauging the technical, social, political, market and economic realities of the environment in which people work. Working with deeper smarts about the elements of VUCA may be a driver for survival and sustainability in an otherwise complicated world.

It is said that Psychometrics which measure fluid intelligence by tracking information processing when faced with unfamiliar, dynamic and vague data can predict cognitive performance in VUCA environments, just like Antifragile, which are Things That Gain from Disorder Cognitive Process Profile (CPP)

The VUCA World

V = Volatility—The nature, speed, volume, magnitude, and dynamics of change; MEGA SITAMA-The nature and dynamics of change, and the nature and speed of change forces and change catalysts.

U = Uncertainty—The lack of predictability, the prospects for surprise, and the sense of awareness and understanding of issues and events. The lack of predictability of issues and events.

C = Complexity—The multiplex of forces, the confounding of issues, no cause-and-effect chain, and confusion and the chaos that surround an organisation.

A = Ambiguity—The haziness of reality and the mixed meanings of conditions, the potential for misreads, and cause-and-effect confusion.

In executive business education, watching how companies and employees cope with the dynamism that defines the VUCA world over the last few years is paramount to this study, therefore the offer of this unique window on how two different managers attempted to adjust to increasing turbulence in their company’s business environment, with dramatically different results for them and their organization.

As a backdrop, the two managers work in a company providing professional services to a market segment that has been growing rapidly and globally. As the overall global business environment grows increasingly complex and competitive, many organisations of nearly all sizes are recognising the need to avail themselves of these services. Moreover, the wave of new regional and global aspirants emanating from emerging markets, which in the past have dismissed the need for such services, are developing into a real growth market, with all the opportunities and challenges that accompany working with different cultural norms and, in some cases, markedly different business models. After bouncing around in low growth for much of the 2000s, this service-providing organisation has seen double-digit YoY growth in the last three years as their customer base emerges from the recession and faces even greater growth and organisational challenges from the VUCA world.

On the downside, this particular segment is very fragmented with no major provider accounting for more than 5% of the market; it is also highly substitutable, with several different types of providers ranging from large and established, to small or one-offs; and it is more competitive, with new entrants from different sectors and now from emerging markets as well. Moreover, the segment has not developed clear-cut “gold standards” for what constitutes a high-quality customer experience. In a space which still contains some alchemy, one buyer’s “wow” might be another’s “ho-hum.”

Furthermore, the segment is a high-touch, relationship-oriented business which still suffers from a dearth of experienced professionals on either the provider or the buyer sides. Many players are still in “learn” mode while they seek to professionalize, especially on the provider side, where employees must master multiple skills sets very rapidly to keep up with the steep and increasingly dynamic growth opportunities. In fact, like other fast-moving organizations trying to keep pace today, working in this company has been characterized as being in a “permanent nose-bleed learning environment.”

Partly as a reflection of this, the provider’s senior leadership changed about three years ago, with a new Chief Operating Officer (who is the chief executive of the unit) coming in from a much more established competitor. This COO brought a game plan that featured several critical changes to the underlying business model, as well as an ambition to grow the business both financially and globally faster than it had ever done.

Finally, this service provider’s overall holding company has, itself, been on a pretty turbulent ride over the last decade, with several “spiky” financial and organisational challenges at the macro level. This has combined to produce a situation where the service provider has had to operate in an extremely “VUCA” organisational climate even while working with its clients’ own VUCA business environments. In other words, for both good and bad, this service provider has been sailing through high seas almost continuously for several years, and has many bruises to show for it. By the same token, many of its leaders have had to develop the kind of adaptability that it takes to thrive in a VUCA world or move on.

Adaptive leadership tactics for operating in a VUCA world is outlined as follows:

For Volatile Situations – Communicate clearly and ensure your intent is understood.

For Uncertain Situations – Get a fresh perspective and be flexible.

For Complex Situations – Develop collaborative leadership and stop seeking permanent solutions.

For Ambiguous Situations – Listen well, think divergently and set up incremental dividends.

For a more intensive and varied knowledge sharing and discussions, and questions relating to your individual specifics, be at our intensive, participatory and interactive entrepreneurship and wealth creation business training programme this May 14th and 15th at Sabo – Yaba, Lagos. You will do well to get in touch with us for details and plan to attend.

…. Drawing lines in the sand…

Both leaders in this study are managers of others, leading client-facing teams. The first, a seasoned veteran of the field who had joined the organisation in the mid-2000s, functioned as a team leader with responsibilities for business development, client management, and overall engagement delivery. This manager’s reputation for being a straight talker, a quick decider, and for having a strong sense for the “numbers” of the business, quickly rendered him a more senior role among his peers on the larger management team. Moreover, his steady ability to provide clarity and direction was popular with his direct reports and made him a charismatic team leader. This manager always seemed to have a clear explanation for things; to ask the straightforward questions of more senior managers when necessary; and to have an action-oriented bias that focused his team strongly on results. The combination of these qualities had a significant impact on this manager’s ability to deliver above his target a few years ago, and led the organisation to increase the size of his client base and to raise his salary accordingly. He seemed on his way to bigger things.

With the onset of the recession, the organisation’s business environment became increasingly turbulent, with some clients cancelling or postponing contracts while new opportunities required more economical models. As was the case for many companies, the business environment following the recession transformed into a “new normal” that became increasingly reflective of the conditions of the VUCA world—new, exciting, and challenging opportunities combined with much more severe turbulence in terms of client expectations, pricing constraints, emerging competition, and greater complexity all across the acquisition and delivery of services. It was clear that the organisation would have to flex dramatically to adapt to these new and fluid market conditions and that its leaders would need to pave the way by demonstrating an ability to adapt themselves. The new COO was the embodiment of this style of leadership, providing a vision but empowering managers to broadly interpret it across their teams; restructuring the organisation to provide for increased collaboration while encouraging competition; and openly embracing the new complexity and ambiguity in the market.

… Failure to Adapt …  –

During the COO’s first several months, this manager emerged as quietly skeptical of the new strategic direction and of the organisation’s perception of changes in the external business environment. He started resisting the need to adapt, retreating instead to the apparent safety of tried-and-true business models. He clung to past measures of success and failure despite evidence that some were no longer applicable or, worse, had become roadblocks to future growth. He also refused to learn new skills, acting as if the new tools introduced by the COO were unnecessary even to target a new, more complex set of client opportunities that were presenting themselves. Once open to many other employees in the organisation, he began to divide them into “friends and foes” while steering his team in its own direction within the larger organisation and actively discouraging collaboration. Seeing the world through a distinctly black-and-white lens, he argued that “ambiguity” was being used to mask problems that could be solved by bold, decisive leadership and that the real way to lead in the VUCA world was to draw some lines in the sand and stick to them. What had once been conversations turned into one-way diatribes, as the manager seemed bent upon demonstrating that he had the answer for everything.

Despite mentoring, this manager, who has since moved on from the organization, basically became an oar rowing hard the other way. For a time, his ability to focus attention on legacy clients in the “tried and true” business model helped meet revenue goals, but this masked how the failure to adapt to new skill sets and more complex client situations would eventually erode the team’s topline performance. Team members, initially energized by this manager’s clear, declarative, top-down leadership style, gradually became confused about direction and disconnected from others in the organisation. The manager’s sharp-edged, “us versus them” stance put most of the team in difficult situations, eventually causing many to become part of the “them” as well. Lapsing into constant “tell” mode, he basically stopped listening to anyone except the echo chamber provided by close allies.

What happened to this particular manager? Was it just a question of a bad fit; the kind of thing that could happen in any organization? The answer is “yes,” to some degree, but in a larger way, the real issue was this manager’s unwillingness to adapt to the increasing turbulence faced by this organisation. The heart of this, in the eyes of many in the company, came from a fear of failure, which undergirded the refusal to want to change, to try new approaches and learn new skills, and to accept that the world has become a much more turbulent, complex place where some leadership styles were now outmoded. Was this manager self-aware? Colleagues did sense some inner struggle on his part at times, but in the end, it seemed as if his ultimate point of self-reflection was to tell himself he was always right.

Next week we will continue with the second part and concluding session of this business story and training material.

– Nwaodu Lawrence Chukwuemeka (Ideas Exchange Consulting). nwaodu.lawrence@hotmail.co.uk  (07066375847).

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