Thinking. About Business.
VUCA-Ready Management
Problem solving is NOT decision making
By Ira Wolfe
“Complexity is the enemy. Any fool can make something complicated. It’s hard to make something simple.” Richard Branson
And that folks is the ultimate paradox for leaders: you can’t predict the future, but you must make sense of it in order to
thrive.
Making sense of change has always been challenging. Change is nothing new. But increasing instability and a pace of
change that seems to be accelerating at warp speed is creating an environment best described in military terms: VUCA.
VUCA for many established and successful leader is what Kryptonite is to Superman—it makes even the most powerful
being vulnerable. Coined in the late 1990s, the military-derived acronym stands for Volatility, Uncertainty, Complexity,
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and Ambiguity—terms that seem to fit our current business world perfectly. This new VUCA environment will require
many business owners and executives to change their approach toward leadership and for HR professionals to revamp
leadership development.
Today, too many companies and their managers are stuck in a rut. They continue to repeat and tweak the past in order to
remain competitive. To paraphrase Albert Einstein, “doing the same thing over and over and expecting different results is
the definition of insanity.”
Let me paint an absolutely crystal clear picture about what I just said. If you or your management team are “working on
it” or “are planning to discuss it at our next strategic retreat” or my favorite: “our industry is different,” then your business
model and business itself is very likely an accident just waiting to happen. “Waiting for things to play out” or “keeping an
eye on our competitors” is not dealing with a VUCA world.
Your competitor today is not likely the most significant threat tomorrow. Don’t believe me? Just ask any watch manufacturer
if they thought a smartphone could ever replace the wristwatch? Or the Internet could decimate the print industry? Or
Kodak and Polaroid could be bankrupted by digital cameras (or even the smartphone)? The biggest threats today aren’t
coming from your direct competitor but another industry or a product that hasn’t even been invented yet.
But I digress. Back to VUCA.
We are moving from a world of problems, which demand speed, analysis, and elimination of uncertainty to solve in a
world of continuous dilemmas, which demand patience, sense-making, and an engagement with uncertainty. Anchoring
strategy in the past does not ensure sustainability and in fact, it likely will hasten a company’s demise.
Dilemmas differ from problems in significant ways. Specifically, many problems can be solved by a single expert or a small
specialized team. When it comes to solving problems, experience and education matters. In fact, experience and education
could be enough to qualify you as the go-to person, the subject matter expert.
Dilemmas, on other hand, span many disciplines. Volatility, ambiguity, and complexity create environments that are in a
constant state of flux and frustrate attempts by traditional problem solvers to “get their head around it” to craft a definitive
solution. In fact, traditional problem solving and leadership approaches stymie, and even paralyze, many leaders who
demand certainty in an uncertain world. Dilemmas require a different orientation, decision process, and set of skills.
This new VUCA environment will require every organization to change its focus and methods of leadership development.
VUCA, as Thomas Friedman (The World Is Flat) 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 new leaders develop the capabilities they need to succeed in a VUCA environment. These
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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.
Is there an elephant in your executive office?
There is a world market for about five computers.
Tomas Watson, founder and chairman of IBM, 1943
The telephone is an amazing innovation, but who will ever use it?
Rutherford B. Hayes, U.S. President, 1875
The development [of the automobile] has been so remarkable that we do
not expect any further improvements in the future.
German car manufacturer, 1914
The continuing shortages of housing inventory are driving the price gains.
There is no evidence of bubbles popping.
David Lereah, PhD—president Reecon Advisors to Wall Street, 2007
Bob Johansen, distinguished fellow at the Institute for the Future and the author of Leaders Make the Future: Ten New
Leadership Skills for an Uncertain World, proposes that the best VUCA leaders are characterized by vision, understanding,
clarity, and agility—the “flips” to the VUCA model.
To hire VUCA-competent leaders, companies need to assess agility and complex thinking skills during the selection
process. An essential approach to evoking examples of past agility and thinking skills on the job comes from a structured
interview format based on the competencies and abilities that directly impact agility and decision making.
For example, here are two sample interview questions you might ask a candidate:
1. “Give an example of when your ability to be decisive was put to the test—when you had to convey a sense of urgency
in decision making. What was the situation, what factors did you consider when making the decision, and what was the
outcome?”
2. “How do you determine when you need to gather more information before making a decision versus making a decision
based on the information you have at hand? Give a recent example of when you made a quick decision based on the
information you had immediately available and it worked out … and a situation where you opted to collect more
information but missed an opportunity.”
Assessments also play a critical role in assessing candidates. Employee assessment confirms that a candidate has the innate
talent to do what he says he has done (and that he just wasn’t in the right place at the right time). And just as important,
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the lack of innate talent does not mean an individual can’t develop the skill. Specific to the requisite qualities that can
be identified by an assessment, agility is directly affected by one’s frustration tolerance, self-control, openness to new
experiences, risk aversion, and awareness. Complex thinking skills require a high need to probe, systemic thinking to
assess new information and high general mental abilities to process a lot of new information quickly.
So given the new VUCA environment and the requisite skills to deliver results, do you know who your VUCA-ready
managers and executives are? Do you have any and how do you know? Do you have “enough” executives and managers
to keep you “ahead of the curve” in the VUCA world of business?
You can win in the VUCA world of business. Sense the future. Compete in the present. Hire and develop VUCA-ready
leaders.
Ira S. Wolfe is president of Success Performance Solutions, a pre-employment and leadership assessment consulting firm. Ira will be
the keynote speaker at the PA Chamber’s Workforce Development Summit on October 25, 2013.
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