31 Mar 2016 18:29 IST

Leading in a VUCA world

Here’s how you can be a successful leader in a business world mired in uncertainties

‘Permanent white water’ is a good way to describe the world we live in — no calm stretches, no smooth water; just constant change and uncertainty. In fact, the US Army War College coined an acronym to describe this world — VUCA, or Volatility, Uncertainty, Complexity, and Ambiguity.

Learning to lead in a VUCA world is a must. In fact, today’s business students and tomorrow’s managers and leaders will see a world which will have a much higher degree of VUCA than today.

In cricket terms, VUCA is the T20 equivalent that’s always on. It has more twists and turns in a few hours than what five days of test cricket can produce. It needs a different league of players and more importantly, a different type of leader.

VUCA-ready leaders

~ Harness change, don’t fight it: An important attitude to take is to see crisis and changes wrought by VUCA as an opportunity, not a problem. As Paul Polman, the CEO of Unilever, put in one of his first interviews after taking over, “Never waste a good crisis... It’s an ideal chance to galvanise more the change we still need, to be truly competitive”. Closer home, we heard Suresh Narayan, the new CMD of Nestle India say, “A crisis is an opportunity”, after the Maggi noodle recall crisis.

Both leaders display a willingness to be open to what the change or crisis can teach the organisation, and view it as an opportunity for growth. The thrust is not just on dealing with VUCA, but harnessing it. This attitude energises the team and the leader to create, rather than cope.

~ Get the listening antennae out further and more frequently: Tom Peters coined the term MBWA or ‘management by wandering around’.

The equivalent for the VUCA leader should be MBLA or ‘management by listening around’. The main challenge a leader can face is becoming too used to sitting in the ‘echo chamber’, where they hear their own voice or the voices of those they have trusted in the past and got used to listening to.

A VUCA leader has to be prepared to have her antennae go out further — out of their comfort zones, listening to team members she has not met; dealing with a suddenly dissatisfied customer; reading markets where there are small but eager signs of moving in a different direction.

A VUCA leader also needs to listen more frequently. As an example, even the traditional bastion of annual performance appraisals is being reviewed by several organisations. No longer is one year frequent enough for this listening and leading conversation.

~ Practice ‘creative destruction’: One of the big obstacles to being a VUCA leader is to be too caught up in the past.

We sometimes become prisoners of old definitions of success and achievement, and fall so in love with our products, strategy, and advertising campaigns that these very success accelerators of the past become brakes in the future.

As Arnold Toynbee puts it, “Nothing fails like success”, meaning what worked yesterday will not necessarily work tomorrow. The VUCA leader must initiate and drive some of this creative destruction — a letting-go of the past and an embracing of the new that is more appropriate to the future.

Yahoo’s inability to do this effectively led to the firm getting onto the ‘acquisition list’ of others; Vijay Mallya failed to re-define, believing the success from his liquor business would automatically flow into his new airline — a business with a much higher VUCA.

~ Be prepared to experiment: A VUCA leader is also fearless in experimentation. She reminds herself that the definition of insanity is “Doing the same thing over and over again and expecting a different result”. She is willing to create a culture of intelligent risk-taking, then analysing the feedback from the experimentation to assess what the most VUCA-ready approach for the organisation will be. This may be on pricing, on product packaging, on vendors, or on the approach to social media.

Small, short experiments act as pilots for future strategy and as guides on how to best pivot the team. Apple, for example, rolled out its latest small version of the iPhone in response to the VUCA it sees in the market — consumers being offered more and more for lesser.

So instead of just sticking with past resolutions, it now comes across as flexible and willing to change and experiment. The hotel industry is facing a VUCA moment with Airbnb shaking up the model; the automobile industry is seeing the early warnings of a shift with driverless cars; traditional brick and mortar bookstores are seeing footfalls drop as eBooks take off. What would be our VUCA response if we were in those industries?

Are you VUCA ready?

We can start with getting VUCA ready right now — in fact we must.

Let’s say your classmates and you have prepared diligently for a case study that was handed out. You land up on presentation day, and realise that the case study has changed. A brand new one is handed to you, and the presentations are expected to start in 15 minutes. What do you think? What do you say? What do you do? Are you VUCA ready?

Can you experiment taking a different mode of transport home, a different route? Can you volunteer to do to the vegetable shopping and carry only a single ₹1000 note and see how you cope? Can you intern at a start-up instead of a larger, more stable firm?

In short, can you start getting into the habit of thinking VUCA and giving yourself as many opportunities to practice being VUCA-ready?

As you ponder over these questions, remember that business will no longer be impacted by VUCA — it will be defined by it.