Not since the financial crisis of 2008 has there been an environment in which a business operates being so Volatile, Uncertain, Complex and Ambiguous (VUCA - adapted from the US Army).
I sat on a Board at that time 12 years ago as CFO, having just come through the other side of, what had been, a successful Management Buy Out (MBO). Our first steps, in response to clients immediately and significantly reducing spend due to consumer and business uncertainty, was to a) rip up and re-form our 1 year and 5 year plans; b) renegotiate the business financing; and c) reshape the business structure in order to protect and survive. 3 years later the business was thriving with revenues increasing by 50% over that period, profit levels doubling, and operating cashflow trebling. We made many mistakes as a Leadership Team; but successes outweighed these, and a number of those successes arose through the application of the 4 key areas identified in the VUCA Antidote column in the image above - Vision, Understanding, Clarity and Agility.
Having a compelling Vision for the business, communicated unambiguously externally and internally is critical. How do you know where you are on your journey unless you know the planned destination? Why will capable and intelligent individuals follow and support leaders (both individuals and teams) without a compelling understanding of where they are going and why they are going there? How is the business playing to its strengths and differentiating itself to its competitors? Where are the opportunities of tomorrow likely to arise and how does the organisation add value to those needs?
Understanding your business drivers and success dynamics, as well as risks and headwinds, enables informed positive decision making. With resources (principally people, cash, time, and assets) increasingly limited, the opportunity cost of investing these in the wrong products / clients / people / markets / investments can severely limit the performance, health, and growth of the business.
Jim Collins in 'Good to Great' described the benefits of Level 5 Leadership. I would argue an effective and efficient business requires all 5 levels shown here to be available to the business in order to increase the probability of a clear vision being flawlessly executed. Positive leadership can arise from anyone who impacts the environment of another individual - not just the CEO.
Clarity requires timely, accurate and relevant information. Naturally this includes quantitative insight; past, present and future. But it also requires qualitative feedback on the latest positions, and expected shifts, with clients, employees, products and markets. Amy Edmondson in her thought provoking book 'The Fearless Organisation' identifies the data supporting a practical guide for creating cultures of collaboration where knowledge and innovation flourish because people feel safe and empowered to contribute their ideas and observations. A framework for establishing psychological safety. A framework for dialling-up clarity.
What delivers Agility in the business environment has become a hot topic in recent years. To be able to pivot quickly, to fail fast, to be responsive to changing requirements, needs and trends, has now become increasingly important. Creating an increasingly agile culture comes from a number of potential sources, including having inspiring leaders across and throughout the organisation, who tend to be empathetic to their people and humble, leading by example - as Gandhi once said 'be the change you want to see'. Also the recognition of not only that leadership exists throughout the business but also that great ideas can come from anywhere, if conditions allow, including the absence of fear.
Nancy Kline in her fascinating book 'Time to Think' asserts that as change proliferates in our lives and organisations, we must prize each other's minds above all else. We must learn how to help people to think for themselves. I first came across this area as my training in Executive Coaching developed. Nancy identifies a number of key take-outs which are relevant here: 1) if you create a particular environment, people will think for themselves; 2) everything we do depends for its quality on the thinking we do first. Our thinking depends on the quality of our attention for each other; and 3) listening of this calibre ignites the human mind.
There is no rocket science here. Indeed much of this could be seen as business common sense. But in a world that is currently floating different sized and shaped 'icebergs' at businesses; ranging from the climate emergency, coronavirus quarantines, consumer stock-piling, and enforced remote collaborations through significant travel restrictions; to the oil price wars, volatility of financial markets, and generationally diverse consumer expectations ... clear thinking driving effective decisions can benefit by focussing on what is truly important and relevant to your business in your VUCA environment.
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