How to Manage Volatility, Uncertainty, Complexity and Ambiguity

How to Manage Volatility, Uncertainty, Complexity and Ambiguity – Part 1

When dealing with increased VUCA – volatility, uncertainty, complexity and ambiguity – what can leaders do? and how can they manage this on an on-going basis?  Read on…

by  Andrew Cooke, Growth & Profit Solutions

Businesses are under increasing stress as markets are increasingly volatile, clients are more demanding, talent is scarcer and change occurs in faster and shorter cycles.  To survive and thrive business leaders have to make faster decisions, on less information, and which have greater risk.  This has led to a change in how leaders need to think, decide and execute.

As business leaders what can we do to address this in a sustainable and effective way?

A good model, that addresses the four areas of concern that business leaders need to deal with, is by using VUCA.  This consists of:

1. Volatility – the rate, amount, and magnitude of change

Drastic, rapid shifts can bring about instability for organizations and leaders, but even the minor or innocuous shifts that occur daily, such as new and “immediate” priorities that disrupt plans, or the increasing need to “multi-task,” are changes that increase volatility.

 2. Uncertainty – the amount of unpredictability inherent in issues and events

Leaders can’t predict because they lack clarity about the challenges and their current and future outcomes. Uncertainty can result in an over-reliance on past experiences and yesterday’s solutions or to analysis paralysis as we sift through more and more data.

 3. Complexity – the amount of dependency and interac­tive effect of multiple factors and drivers

Complex interactivity requires leaders to think in more creative, innovative and non-linear way; to be able to deal with shades of gray (as opposed to black and white) solutions.

4. Ambiguity – the degree to which information, situa­tions, and events can be interpreted in multiple ways

Ambiguity increases doubt, slows decision-making, and results in missed opportunities (and threats). It re­quires that leaders think through and diagnose things from multiple perspectives.

 The Challenge for Leaders

For leaders the challenge is not just a leadership challenge (what good leadership looks like), but it is a development challenge (the process of how to grow “bigger” minds) to deal with the world of VUCA.  Leaders, too often, have become experts on the “what” of leadership, but novices in the “how” of their own development.

So What Can We Do?

1. Change the Leadership Mindset – we must help ourselves, and our tactical leaders from being easily get trapped by their predictive mindset when they encounter a VUCA situation by providing a robust sounding board, challenging their assumptions and beliefs, and helping them develop new perspectives, options and ideas.
2. Change the Leadership Approach – many leadership issues are not problems to be solved but rather dilemmas that must be continuously managed.  Helping leaders to understand this, and to manage the issues and create opportunities from this is key.
3. VUCA is a neutral force in the world – leaders often look at Volatility, Uncertainty, Complexity and Ambiguity as a negative force that they need to react to.  Rather, as leaders, we need to see the potential and to transform it proactively and find the opportunity within.
4. Leaders Don’t Execute, leaders execute – Leaders too often get involved in driving the efforts themselves, leaders need to help them think more strategically and to unlock the potential of their people. By developing and supporting leaders (i.e. mid- or lower-management at lower levels we can execute at the right level, with the right people with the right skills.

So what are you going to do to address VUCA in your business or organisation?

Visit the second part of this article, How to Manage Volatility, Uncertainty, Complexity and Ambiguity – Part 2, to discover the 4 ways for how leaders can deal with volatility, uncertainty, complexity and ambiguity.

Click here to find out more about Andrew Cooke and Growth & Profit Solutions.