Institutions and nation states are now facing inevitable and even predictable, change. But they lack the leadership, flexibility and imagination to adapt. It’s not that their current leaders and pipeline are not smart enough or don’t recognize what’s happening. It’s just that the speed of change is simply overwhelming them.
Welcome to the new world of business or as it is commonly quoted, “the new normal.”
In this new environment, we are moving from a world of problems to a world of dilemmas. Solving problems requires speed, analysis, and elimination of uncertainty. Dilemmas demand patience, sense-making, and an engagement with uncertainty. Dilemmas require a different orientation, decision process, and set of skills because dilemmas span disciplines and frustrate efforts to find workable solutions quickly enough.
Part of the problem is that too many companies and their managers believe that the past continues to be an accurate predictor of the future. They continue to repeat and tweak the past in order to remain competitive. But anchoring strategy in the past does not ensure sustainability and in fact it might hasten a company’s demise. Relying on the past works when change is gradual and innovation is incremental. But during disruptive times, required responses to change are not evolutionary but revolutionary.
In The World Is Flat, Thomas Friedman notes that the rate of change today is much different than in the past. “Whenever civilization has gone through one of these disruptive, dislocating technical revolutions —like Gutenberg’s introduction of the printing press—the whole world has changed in profound ways,” he writes. “But there is something different about the flattening of the world that is going to be qualitatively different from other such profound changes: the speed and breadth with which it is taking hold….This flattening process is happening at warp speed and directly or indirectly touching a lot more people on the planet at once. The faster and broader this transition to a new era, the more likely is the potential of disruption.”
To find a solution, business had a new buzzword to describe what’s happening – VUCA. Coined in the late 1990’s, this acronym was “stolen” from the military and stands for the Volatility, Uncertainty, Complexity, and Ambiguity—terms that reflect an increasingly unstable and rapidly changing business world. While using different terms, I have been interpreting assessments for my clients in the context of ambiguity, paradox, and decision making quality and speed. This new VUCA environment will require every organization to change its focus and methods of leadership development.
But VUCA, as Friedman notes, is taxing even the most able of leaders who may find their skills growing obsolete as quickly as their organizations change in this volatile, unpredictable landscape. Leadership agility and adaptability are now required skills if organizations are to succeed in this VUCA world.
Boston Consulting Group recently concluded that organizations today must shift their business models—and their leadership skills—to become “adaptive firms.” Another report by the Center for Creative Leadership also notes that today’s VUCA business environment requires leaders to possess more complex and adaptive thinking abilities These skills and abilities are a far cry from the more function-specific skills and abilities leaders needed in the past to succeed. HR and talent management professionals must refocus their leadership development efforts to hone these more strategic, complex critical-thinking skills.
More traditional leadership development methods such as on-the-job training, job assignments, coaching, and mentoring, are falling short in helping them develop the capabilities they need to succeed in a VUCA environment. These methods are often at odds with the leadership demands in a VUCA world, where knowledge across the organization and the speed of learning outpace these slower and more job-specific learning methods. As a result, leaders are not developing fast enough or in the right ways to keep up with the “new normal” for business.