Managing "VUCA"
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By Edward D. Hess,
Distinguished Executive in Residence and
Adjunct Professor of Management, Goizueta Graduate School of Business
Emory University
Atlanta, Georgia
edward_hess@bus.emory.edu
Volatility, uncertainty, change and ambiguity (VUCA) are the
new givens of a globally hyper-competitive business environment.
VUCA results from high-speed information availability, instantaneous
response times by competitors, and from the commoditization not
only of labor and capital, but also of knowledge and intellectual
capital.
Lead-times are short - competitor responses or reactions are
fast - and with the continued consolidation of most industries,
there are two or three very well capitalized behemoths which can
crush younger guerilla businesses if they stand still too long.
VUCA can render meaningless traditional five-year strategic plans;
and even short-term plans; vitiate the compartmentalization of
strategy and tactics; make long-term product development more
risky - thus stunting innovation; and necessitates collaborative
information sharing and decision processes. VUCA requires a different
management style than traditional top-down or command and control
styles. VUCA puts a premium on critical inquiry, debate, the full
venting of alternatives, and cultures which reward dissent.
Leading and managing people in VUCA environments takes a different
mindset, different skills, and requires a collaborative approach.
Likewise, in VUCA environments, failures or mistakes are givens
and leaders need ways of dealing with failures and learning from
them. VUCA requires corporate types to sense and respond like
entrepreneurs.
As part of developing our new experiential Leadership Curriculum
@ Goizueta Business School, I plus two colleagues spent a day
and a half at The United States Marine Corps University and Officer
Candidate School at Quantico, Virginia discussing leadership training
with the Senior Leadership Faculty of the Marine Corps. Very impressive
people - combat veterans with PhDs in Philosophy, Ethics, etc.
The Marine Corps Leadership Model is a values-based Servant Leadership
Model - that is, a leader serves his or her followers and upholds
certain inviolate values. They believe leaders must have stood
in the shoes of their followers in order to lead. I think the
business world (and business schools) can learn a lot from the
military because it has done the best job of educating leaders
to lead people of different backgrounds and economic standing,
etc. This is the challenge for business leaders today. So, what
did we learn that was surprising and interesting???
FIRST, in VUCA conditions, leaders are trained to seek
input from all team members, including the lowest ranking members.
Different opinions and viewpoints are encouraged because all need
to be taken into account in venting possible courses of actions
and the pros and cons. The elite or well educated lead; they do
not dictate. Teams own ideas, not individuals. Everyone participates.
SECONDLY, critical inquiry and dissent are part of a teammate's
duty. YES, DUTY. You have a duty to voice your opinion if you
disagree with the leader. Dissent is not punished. Although the
leader makes the final decision, the PROCESS of debate is encouraged
because it is through debating different viewpoints that better
decisions can be made. And the debate process educates all players
about the reasons for certain courses of actions and better prepares
people for the unexpected which will occur not only on the battlefield
but in business.
THIRDLY, leaders should try to stay as close to the front
lines as possible in order to have better information. Business
leaders, too, must stay close to customers - do not lose touch
with reality.
FOURTH, GROUP THINK is to be avoided at all costs. In
the business world, too, many corporations recruit for, train
for, and reward group think. Group think masquerades in those
companies as culture. Group think leads to myopic thinking, rigidity,
arrogance, and ultimately defeat. Group think also masquerades
as the "not invented here" attitude or "ignore
him - he is different from us".
FIFTH, every action is critiqued afterwards in detail
in order to learn from the experience...What could we have done
better???? What surprised us????? What would we do differently???????
Businesses need to do this more because this is how employees
learn. Think about it, you want employees prepared to respond
to customers and competitors. How do they learn responses??? How
will they learn to respond "on the fly"???????
Lastly, all planning exercises contain a component of how to
mitigate against major downsides. If one also reads the decision
making process of Robert Rubin, the former Co-Chairman of Goldman
Sachs and Secretary of the Treasury, one will find that a key
component of his process is evaluating which course of action
mitigates the best against a major downside when one is dealing
with VUCA situations.
I suggest these principals are applicable to many businesses
today. It is this process of inclusion, respect, and diversity
of opinions which requires specific management and leadership
competencies which many people do not have. Not only will this
process produce better venting of courses of action, but also,
a key result of this inclusive decision process is that everyone
feels a part of the team and has a stake in executing the plan
well. People find meaning in being respected, listened to, and
accordingly are very loyal to the team and perform well in difficult
circumstances. I think the business world can learn something
here.
What do you think??????????
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