VUCA Assessment: Is Your Organization Ready?
Here is the big question of the VUCA Assessment: Can we take chaos as a given and learn to thrive on it? According to Tom Peters, this requires that we not only learn to cherish impermanence and see chaos as an advantage but also deal with uncertainty proactively. In 1987 Peters predicted that:
“Chaos and uncertainty are (will be) market opportunities for the wise; capitalizing on fleeting anomalies will be the successful business’ greatest accomplishment.” – Tom Peters
The pandemic proved that term like VUCA (Volatility, Uncertainty, Complexity, and Ambiguity) is not just popular slogan anymore. VUCA has undoubtedly taken on a new meaning, and today it describes trends and realities in every industry and every aspect of our life. When looking at our organizations’ response to VUCA, it would be fair to say that many failed to act, never mind performing timely and correctly. Our VUCA reality requires that we operate in a highly unstable environment characterized by rapidly fluctuating circumstances and disruptive trends while dodging roadblocks and meeting ever-increasing demands.
How can we respond to this kaleidoscope of ever-changing circumstances?
We need to be at our best. The psychology of optimal performance points to the research into the mental state of Flow, a condition in which we perform optimally and are stretched to a high degree, as defined by Mihaly Csikszentmihalyi in his groundbreaking publication “Flow: The psychology of optimal experience” (1990). On the individual level, we must embrace the change and challenge of VUCA and build internal resources through the deliberate cultivation of Flow. The relationship between one’s ability to perform the task and how we perceive the challenge at hand influences our ability to see stress as enhancing and VUCA reality as an opportunity to rise to the occasion. The exhilaration of seeing ourselves become more complex is at the heart of the intrinsically motivated nature of flow-inducing activities. For a more in-depth explanation of how Flow can be the most adaptive response to change and how stress can enhance, see our previous article, “How to Thrive in VUCA World: cultivate flow.” On the organizational level finding a balance in the world of exponential change points to the flow-prompting leadership philosophy and enterprises that promote flow-driven values. Values that agree with our nature when we operate at our best and values that focus on human potential.
Organizations that promote flow-driven values
Organizations that promote flow-driven values work in tandem with their environment. They sense change as a unified collaborative human system so that they can respond to the VUCA challenge sustainably and optimally. Flow-promoting leadership increases individual and collective performance, which leads to greater returns. Still, its most important benefit is job satisfaction from engaging in meaningful and fulfilling work. Being positively stretched allows us to do our best under any circumstances.
“Flow promotes positive affect, creativity, concentration, learning, meaning, and purpose in life, and a sense of transcendence or connection with a greater whole.” – Veronica Huta
Enterprises where employees experience Flow and develop toward greater complexity and where the organization’s products or services contribute to positive human growth are examples of environments where we can thrive on VUCA. They constitute the flow-promoting leadership philosophy defined by professor Mihaly Csikszentmihalyi in “Good Business: Leadership, Flow, and the Making of Meaning” (2004).
VUCA and extraordinary responsiveness
VUCA reality requires extraordinary responsiveness, capacity for innovation and fast failures, and flexibility to empower people to be pilots of everything. When each aspect of VUCA is present to a different degree, we must calibrate our approach and stress different responses based on the dominant trend.
- Volatility in VUCA, defined as rapid, frequent, and significant change, can be addressed by cultivating clarity of vision and willingness to adapt one’s thinking to sudden shifts in circumstances. A long-term vision can point us to values that enable in-the-moment decision-making, especially in volatile situations that call for short-term thinking and test our resolve.
- Uncertainty of VUCA makes preparation difficult when faced with unpredictable events and their consequences. One can mitigate this by embracing risk and experimenting, building consensus on what can be changed versus what we must accept, and cultivating flexibility and resilience.
- Complexity, especially in the face of competing interests, makes problems intractable. This level of convolution calls for critical thinking, clear expectations, deep collaboration, honesty, empathy, and openness to new ideas.
- Ambiguity invites misunderstandings, particularly in complex communication systems, and can make for difficulties in decision-making, especially when value judgments are involved. Active listening, involving your team in making choices, and rewarding courage to speak up can help eliminate many interpretations.
“Whereas the heroic manager of the past knew all, could do all, and could solve every problem, the post-heroic manager asks how every problem can be solved in a way that develops other people’s capacity to handle it.” – Charles Handy
Leaders must train in situational awareness so better choices can be made toward better outcomes for all despite the maddening pace of change. This means developing competencies that counteract VUCA and skills to help manage work, projects, and teams despite increasing challenges.
Well-executed and value-based leadership development programs like FLIGBY (FLIGBY® abbr. for “FLOW is Good Business for You™”) can become strategies that enable managers to leverage the effects of change on motivation and performance. In FLIGBY’s simulated reality, players can problem-solve and observe different outcomes in a sequence of leadership decisions, adjust courses in real-time, and obtain feedback, all without fear of real-world consequences. Practical, experiential learning components must match VUCA competencies of experimentation, feedback, and emotion regulation.
The VUCA competencies
The VUCA competencies of embracing and balancing risk, experimentation, self-awareness, ability to learn on the fly, and ruthless prioritization are necessary for anyone who leads an organization and wants to thrive in this climate. The FLIGBY VUCA report generated by actual performance results in the business simulation game provides reliable feedback on skills necessary to succeed as a leader and an organization in the VUCA world. In our upgrade to the reporting tool, we have expanded to revise these metrics to specifically address VUCA readiness as a separate part of the scores index. Leadership skills relevant to five key VUCA competencies have been clustered to generate scores for each and a total VUCA readiness score. They are described below, together with some suggestions for remedial strategies.
- Embracing and balancing risk can be done by increasing situational awareness, rapid assessment of options, sound decision-making, and deliberate action. In FLIGBY, risk-taking is measured by factors of entrepreneurship, time-pressured decision-making, and teamwork management.
- Ability to experiment supports fact-based decision-making. Analytical, organizational, and information gathering skills are crucial if we want to set suitable experiments and test and fail fast, and the VUCA reports address these in turn. Experimentation encourages the development of a learning versus performance mindset, which is crucial to sustained progress and retention of information over time.
- Demonstrating self-awareness is a key people skill necessary for effective collaboration. High-functioning teams have trust and psychological safety; everyone feels valued and respected, and all are empowered to take risks, driven by compassion, and focused on mission and vision. One of the most central human qualities to thriving in VUCA reality is empathy. The ability to listen, celebrate, recognize, empower people, innovate, and involve everyone in everything all have a strategic value in preparing for the VUCA. We measure self-awareness directly in FLIGBY by assessing the following:
- Emotional intelligence,
- Ability to recognize personal strengths, and
- Propensity to utilize motivational skills.
- Learning fast enables an open-minded stance and a rapid synthesis of successes and failures. The critical skills measured here include business-oriented, strategic, and intuitive thinking.
- Ruthless prioritization is a must when conditions change rapidly and without warning, and teams are challenged to define a path to reaching goals regardless of short-term gain or loss, previous investment, political implications, and personal preferences. FLIGBY factors measured here, in addition to prioritizing, are empowerment and involvement.
The FLIGBY VUCA Assessment
The comprehensive FLIGBY VUCA report contains KPIs relevant to thriving in the VUCA environment, lessons learned, and an analysis of how individuals make decisions in specific situations that can help us predict how we will respond emotionally to particular challenges. Most importantly, however, the VUCA report involves input from experts. These can allow us to reflect on how to apply acquired skills to our context and dilemmas in our organizations and match them to tasks that create win-win scenarios for the business and everyone involved.
Game-based profiling allows for accurate measurements of fundamental skills used in problem-solving and more robust mapping of unused potential. Profiling is linked directly to everyday business situations and decisions. Leaders can also use the profiles to map out organizational skill gaps and devise remedial strategies. Predictive people analytics are extremely valuable in today’s rapidly changing business world. One must learn to adapt quickly to changing circumstances while becoming increasingly more aware of incompatibilities in organizational culture.
“Excellent firms don’t believe in excellence – only in constant improvement and constant change” – Tom Peters
For even more profound business-oriented benefits, leaders can engage their people managers in a blended learning approach that includes debriefing the results obtained through the game. Debriefing the VUCA report allows us to reflect on our performance during the decision-making points. It will enable one to analyze specific VUCA readiness competencies by drawing parallels between the storyline and dilemmas players face in their organizations. Ultimately this form of blended experiential learning allows the players to apply problem-solving skills acquired during gameplay to the real-life context of their respective enterprises. On the organizational scale, blended experiential learning increases the possibility of building people-oriented work environments that stress collaborative problem solving, collaboration, awareness of strengths, emotional intelligence, the ability to motivate, and other essential skills that enable individuals and organizations to thrive today and in the future.
Geoff Colvin, in his book “Humans are Underrated: What high achievers know that brilliant machines never will,” tells us that some of the new high-value skills in the VUCA world of the near future will be those that are a part of our most profound nature: self-expression that goes beyond logic, creative and visionary abilities, building a relationship, sensing each other’s thoughts and feelings, and solving problems together (2016). Colvin reminds us that those skills grow in small increments while the technology we create grows exponentially.
“As technology takes over more of our work while simultaneously changing us and the way we relate to one another, the people who master the human abilities that are fading all around us will be the most valuable people in our world.” – Geoff Colvin
Our most profound, most essentially human abilities of empathy, creativity, social sensitivity, storytelling, humor, relationship building, and expressing ourselves with greater power than logic can ever achieve can create tremendous competitive advantage and bring us more devoted customers, stronger cultures, breakthrough ideas, and more effective teams. And while many of us regard these abilities as innate traits, they can all be cultivated, and some are already being developed in several farsighted organizations (Colvin, 2016).
Conclusion: how to thrive in chaos
Difficult times expand motivation, creativity, and resourcefulness and allow us to do things differently, away from social norms and conventional ways of thinking toward new possibilities. Uncertainty often brings a form of existential crisis, calling us to reconstruct our reality and see our strengths and capabilities differently. Constraints put boundaries that focus our attention, and difficult circumstances mobilize new internal resources. We gain a new appreciation for what we have, which allows us to use it better. Resilient motivation is not situation-dependent. We not only need to learn from the crisis but must also advance this learning personally and organizationally.
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