Faced with increasing volatility and uncertainty, business leaders are being forced to change the way they approach emerging challenges in a way that allows them to find innovative solutions and adapt—rather than react—to unexpected events. Furthermore, increasing polarization in societies and organizations across the globe has resulted in an environment of distrust, making collaboration and cooperation more difficult. Many individuals are more frequently operating from a place of fear and frustration, which further confounds our professional and personal lives. In the face of this, it is more important than ever for leaders to adopt a mindset that will guide their organizations through any challenge the future holds.
The key lies in letting go of clinging to the past or the “way things used to be” and making fundamental mindset shifts that will allow us to find opportunities in challenges and respond quickly to changes in the business environment. Leaders at the Strategic Agility Institute have identified four shifts to help business leaders in any industry thrive in an increasingly volatile world. The idea is based on a term coined by the US Army War College that accurately characterizes the organizational environments present in today’s constantly-changing landscape—VUCA.
|Volatility (nature and speed and volume of change)||Vision|
|Uncertainty (inability to anticipate issues and events)||Understanding|
|Complexity (the chaos that arises in organizations)||Clarity|
|Ambiguity (lack of clarity around reality, meaning and circumstances)||Agility|
In a VUCA world, leaders are finding that the old ways of doing things no longer work and that success largely depends on developing vision, understanding, clarity, and most importantly—agility. Vision in an organization means defining an overarching purpose, or simply put, its “why.” This gives a shared purpose and guidance, even in the most difficult times, decreasing volatility.
Next is the chance to transform uncertainty into understanding. In an organization, this requires developing a sense of community by fostering communication and engagement on all levels. By continually and intentionally building a culture of inclusion and collaboration, where all voices are heard, organizations can achieve a more comprehensive understanding of the company’s entire ecosystem. This then increases their ability to transform complexity into clarity. Understanding leads to knowledge, which can then be used to simplify and processes and systems and define expectations.
This then increases their ability to transform complexity into clarity. Understanding leads to knowledge, which can then be used to simplify and processes and systems and define expectations.
The last and most significant shift is to counter ambiguity with agility. Built upon the foundation of the three previous shifts, company executives can develop “Leadership agility, [which] is the capability of a leader to dynamically sense and respond to changes in the business environment with actions that are focused, fast and flexible.” Horney, Nick, PhD, et al. “Leadership Agility: A Business Imperative for a VUCA World.” (2010) People & Strategy Journal. Another key tool for analyzing and increasing organizational agility is the Agile Model. It was developed in 2002 and focuses on aligning a company’s key resources to drive leadership agility.
It is clear that for companies to thrive in a VUCA world, they will have to focus on their most important assets—their human talent—to establish and continually develop a company culture that promotes vision, understanding, clarity, and agility.
By Alma R. Ortega López | Institutional Relations | American Industries Group®
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