Being VUCA Ready

12/23/2014

Our world is one marked by the forces of volatility, uncertainty, complexity and ambiguity, that is sure. But what is less sure to today’s organizational leaders is how they can best handle these forces, called VUCA, in order to not only stay relevant but to also expand. What is required of leaders in today’s VUCA world is the ability to:

  • Anticipate and react to change
  • Act decisively without clear information
  • Navigate through complex and ambiguous situations
  • Become and stay effective even in a volatile environment

Some real-world examples of these challenges are economic crises, political volatility in key markets, labor relations, the changing demographics of the workforce, cyber security, the fluctuating cost of oil, activist shareholders, and constantly changing government regulations at home and in target markets.

Research underlines the link between organizations being “VUCA-ready” and meeting, indeed exceeding, goals. According to the Development Dimensions International (DDI) 2015 Global Leadership Forecast,1 the top 20 percent of organizations performing well financially are three times more likely to have VUCA-capable leaders than the bottom 20 percent.

Unfortunately, many business leaders are not VUCA-ready. According to DDI, fewer than two-thirds of polled business leaders said they were highly confident in their ability to meet the four basic VUCA challenges listed above. Human Resources managers also said they had limited faith in their companies’ leaders; around a third viewed them as not capable of meeting the challenges presented by volatility, uncertainty, complexity and ambiguity. Fewer than 20 percent said their company’s leaders were “very capable.”

A large part of becoming VUCA-ready is having cultural competence, that is, developing the ability to intentionally change and adapt to different cultural situations, proactively creating new contexts, environments and circumstances that maximize constructive outcomes for all stakeholders. When leaders become culturally competent – and help those they work with do the same – they maximize communication and collaboration, so that they can navigate past the VUCA forces and meet their business goals.

1 Development Dimensions International, “2015 Global Leadership Forecast,” http://insight.ddiworld.com/glf20142015