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The cracks in meaning in a VUCA world

by Tania Hummel on 25 Jul 2016

VUCA_world

In the book, The Black Swan: The Impact of the Highly Improbable, Nassim Nicholas Taleb describes a black swan as a highly unlikely event with three principal characteristics:

  1. It is unpredictable
  2. It carries a massive impact
  3. We retrofit an explanation that makes it appear less random and more predictable than it was

If anything, instances of black swan events (low predictability, high impact) seem to be increasing. If anyone still doubts that we are living in a VUCA (short for volatility, uncertainty, complexity, and ambiguity) world, recent events around Brexit provide the perfect demonstration and could just as easily apply to many businesses experiencing disruption.

Volatility

Unwelcome and unexpected developments arrive thick and fast – volatility in circumstances more often than not, triggers volatility in behaviour. Individuals react in uncharacteristic ways – conversations are charged with emotion and followed by rash and impulsive actions. Unscrupulous individuals deliberately trigger emotions in others to further their own ends.

Uncertainty

What to do? There are no easy answers. People revisit the past looking for patterns and clues with which to predict the future, even though you can never "fish in the same river twice". People start catastrophising about all that can/will/might go wrong. Contrarily, some have rosy visions of a golden tomorrow, entirely free of practical steps on how to get there. People see the situation according to their personal dispositions – optimist or pessimist? Big picture thinkers imagine a world of possibility, while practical realists fret about the here and now, emphasising the need for specifics.

Complexity

There are no easy answers, not helped by leaders who say one thing and do another. Global markets can be a cacophony of confusion and complexity, with differing mindsets, cultures, tax regimes, and practices. In the Brexit example, politicians who really wanted to Remain, spearheaded the Leave campaign. Politicians who apparently wanted to Leave, led half-hearted Remain campaigns. The "false positive" reigns. Having your cake (access to the free market) and eating it (accepting unfettered freedom of movement) is fundamentally incompatible -yet there are those who claim there is everything to play for, while others insist efforts to reconcile the two are doomed to failure. Simply packing one's bags, booking a removal van and leaving the keys on the way out just isn't an option.   

Ambiguity

Is the EU a good thing or a bad thing? Like most things, the answer is probably both. Decades of peace, travel and cultural exchange with investment in science, education and the arts, along with investment into neglected regions are all good things. However, the banking crisis, followed by years of austerity, has led to stagnation and youth unemployment across the zone causing understandable disillusionment, migration and social unrest. The arguments for and against membership are compelling, and this has been reflected in the closeness of the Brexit vote.   

But these are unprecedented times – and the increasing awareness of the escalating VUCA nature of these times is already having a serious impact on our mental and emotional wellbeing.  For example, the success of Google was a black swan, as was the horror of 9/11, and so was the banking crisis. 

Why do we not acknowledge the phenomenon of black swans until after they occur?

Part of the answer lies in our psychology. Concentrating on the things we already know, means that too little time is spent on what we don’t know. This limits our ability to truly evaluate opportunities, and too vulnerable to the impulse to oversimplify, and to create agreeable narratives to support the status quo.  We also are not open enough to those who can imagine the "impossible".

Currently, we know everything there is to know about being a part of the EU. We know nothing about life outside it. This is both a great opportunity and a threat.

How many businesses have been derailed by visionary leaders who failed to engage with the practical realities, and yet, how many businesses have stagnated because of a lack of imagination?

As much as companies pay lip service to diversity of thought, in reality too many succumb to "group think". Hiring people with the same perspective and mindset can create harmonious relationships – it can also lead to disaster. Visionary leaders are often imaginative individuals, who either cannot or will not engage with the detail. Their impatience with any kind of challenge in the form of questions of specifics can sometimes prevent serious questions being asked at all. In fact, the higher the stakes, the less likely they are to be inclusive of different points of view.

Self awareness in leaders can be the difference between success and failure if the ability to acknowledge the limitations of one's own outlook, mindset and beliefs, is combined with the willingness to take action to remedy the situation by including the views of individuals who might challenge these. Some call this emotional intelligence, to others it is simply that old-fashioned word "maturity".

Boris Johnson’s Brexit campaign is a prime example of this – outwardly confident, good on his feet, with a charming if provocative way with words, he appeared enthusiastic, optimistic embracing change and willing to challenge tradition. He is known to be long on colourful rhetoric, short on process and detail, making big decisions on gut feel alone. His confidence in situations where he feels in control has led to him being one of our most popular politicians. Yet lately, this same confidence has become his undoing.  The shambles that followed the announcement of the Brexit vote, clearly demonstrated what was lacking, and as Foreign Secretary he has a mountain to climb in rebuilding his credibility.

The public have also responded to the news in line with their own perspective of the situation: those who are cautious are suffering considerable anxiety at the uncertainty of the situation, seeing the risks. Others seem quite prepared for a temporary dip in the economy to achieve a better future, as they see it.  And of course, those whose sensibilities lie somewhere in between are excited by new trading opportunities around the world, but are nevertheless concerned about maintaining existing trade links in Europe.     

In a VUCA world, anxiety is an entirely natural response to uncertainty, and learning how to manage your own emotions, so that you can help others manage theirs, will be a key skill in leadership in future.

Businesses everywhere will need to reconsider their purpose. For many organisations, this could in fact be a moment of reinvention. A dragon is a big lizard that breathes fire – yet it always guards the treasure, if only we have the courage to face our fears and balance the vision with a plan.

The journey to composure that many of us need to take starts with developing greater self-awareness, both of our personal qualities and how these impact our world view. In all likelihood, things won't be as bad as the Remainers fear, and not as good as the Leavers promised, but it's important to notice that our perspective is impacted by our circumstances and that no one can say for certain what the future holds.

In the meantime, we are all left having to deal with the cracks in meaning that disruption brings.

Tania Hummel is a senior HR professional and executive coach, providing coaching and consultancy services across a range of organisational development and design issues.  

Tania led the HR function of Nature and Macmillan, one of the world’s most renowned scientific, academic and education publishers, during a period of transformation from a regionally organised, traditional, print-based business to a global digital and data-driven information provider.

Her key experiences include managing complex employee relations issues in the UK and internationally, executive coaching, talent management, employer brand development, leadership and management development, communications, as well as global compliance and risk management. 

For more information please visit: www.letsthrive.co.uk

How to approach your business transformation

Topics: Change, business disruption

Tania Hummel

Written by Tania Hummel