Wednesday, March 16, 2011

Prepare Yourself for VUCA Leadership

Business and government leaders in Japan are being tested during the current triple-whammy of earthquake, tsunami and nuclear reactor meltdown.

Leading effectively during a crisis requires strong character, excellent planning, consistent communication, and a cohesive team. It takes the ability to manage one’s own dilemma: how to externally convey peace and calm while internally experiencing a turmoil of emotions that may include horror and despair.

Dilemma management was given an academic focus and an acronym by the US Army War College. The term VUCA was coined to describe the factors of Volatility, Uncertainty, Complexity and Ambiguity which face a leader in today’s combat environment.

The study of VUCA began as part of a military leader’s education but now has crossed over into business, making it an important part of effective strategic management. Any business leader can immediately see how learning how to lead in a VUCA environment is relevant to their situation.

The VUCA framework gives us some direction about the skills needed to lead effectively during times of drastic change.

Volatility can refer not only to unexpected emergencies such as natural disasters, equipment failure, or workplace violence, but also to the economy and the speedy lifecycles of technology. It’s necessary to survey your particular organization and know what factors could disrupt your operations. If you work in a large organization, no doubt you have addressed the issue of business continuity and data recovery. However, it’s been estimated that 40% of small businesses have not. Having the foresight to plan for the worst in every situation is a strategic management skill that is a requirement for effective leaders.

I will never forget experiencing a bomb threat at my workplace, part of a call center and warehouse. The bomb threat was thought to be a direct result of some national media attention my department’s sizable Japanese business had attracted. Although not trained in how to deal with a phone call like that, the receptionist handled it with calm professionalism. Customers never knew what happened, but orders were not received or distributed that day, and hundreds of workers were sent home.

• Does your organization have an emergency action plan and business continuity procedures in place?

• Do you have strategic plans to address future trends that may affect your particular business?

No matter how experts try to predict - the next earthquake, the next invention, the economic recovery – no one really knows. The next great Tokai earthquake is overdue to occur in the Shizuoka prefecture and the Japanese government has been preparing for it since 1978. The great tsunami-generating earthquake of March 11th off the coast of Sendai was not predicted. We need to be able to lead despite uncertainty.

When faced with a volatile situation, list the questions you have. What is known, and what is unknown? Determine the best courses of action to deal with the unknown. Mitigate the uncertainty as much as possible by asking all the questions and collaborating with others to find the answers.

• Do you have a good team in place who asks the difficult and unexpected questions?

• Do you have the ability to listen well?

Every circumstance contains multiple connections and repercussions. The complexity of a situation can be overwhelming. Leaders need to be able to discern and prioritize to make good decisions within the parameters of their knowledge. In order to do this, you must have access to real-time, accurate information and as much expert analysis as possible.

Disaster relief workers in Japan are confounded by the enormity of their task: people need shelter, food, water, warmth, medical care, to find their loved ones, to find their belongings, to be protected from radiation…the list goes on and gets more complex when the challenge of logistics, gasoline and factors we are not even aware of are added. In order to prioritize and give people what they need, leaders need timely access to key information and essential communications.

• What is the state of your communications networks, for both emergencies and non-emergencies?

• Are you receiving the right amount of quality information on a timely basis?

• Do you have people and systems in place that can make effective use of this information?

It can be difficult for people to function in an environment of ambiguity, but that is often a necessity in business and in life. No matter how much we try to put structures, rules, and procedures into place, the world is not black and white. There are always exceptions, and in a VUCA world knowing how to lead people through chaos and ambiguity is an essential skill. Communicate way more than you think you need to in order to manage expectations, calm fears and mitigate rumors.

Most VUCA –type circumstances are not just problems to be solved, but dilemmas that must be prepared for as much as possible, then continuously managed. It can be a taxing job, so incremental successes within the larger situation must be identified, acknowledged, and celebrated.

• Do you communicate to your employees often and in depth?

• Do you have temporary structures and procedures for times of ambiguity and change?

Not surprisingly, the study of VUCA and dilemma management has not yet addressed (as far as I can find) the psychological preparation needed for a leader to manage during VUCA times or how a leader can help their people resume full functioning after a trauma. Here is one resource for the latter.

Volatility, uncertainty, complexity and ambiguity at work are becoming more business-as-usual than exceptions. Take advantage of the practical resources which are widely available, such as data recovery systems and emergency action plan templates. And hone your leadership skills so you can manage both the internal and external dilemmas that come your way.

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