Leadership in an uncertain world: WHY C-LEVELS NEED TO CONTINUALLY QUESTION
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here have been few business contexts in living memory more challenging than the early moments of the pandemic. Keeping the wheels turning on a globalised economic system whilst borders are closing and national health regulations are confounding businesses, this is the archetypal VUCA environment. What do these kinds of changing new-world contexts, characterised by extreme Vola lity, Uncertainty, Complexity, and ambiguity (VUCA) mean for leadership and strategy? And what effect does this have on the role of skills and creden als? The compe ve world of business has, necessarily, always been an arms race. Leaders need to adapt and overcome obstacles, keeping pace with their compe tors as well as human development. Change is not new, says Marco Mances , former Research and Development Director at IMD Business School for 10 years. “What is different is that the pace of change, the immediacy, the extent of impact and the number of factors to
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be taken into account have dras cally increased,” Mances explains.
What does this imply for execu ve managers? As a consequence of technological advancement, the business world has far higher complexity than it once did. Business leaders face uncertainty as a result of changing poli cal and regulatory contexts, vola lity as a consequence of flee ng commodi es prices and shifting markets, and ambiguity due to the emergence of unprecedented situa ons — Brexit, the pandemic, or the trade war between the US and China being recent examples. Mances argues that this should not lead to despair or the denouncement of norms in strategy and leadership: on the contrary, “strategic thinking becomes an impera ve […] Leadership becomes crucial.” Strategy must be far more frequently assessed in the VUCA environment. And it must be developed and evaluated by far more astute leaders who are
capable of “taking a though ul posi on and ar cula ng an agile strategy” in the face of complica ng factors. In a world that is increasingly difficult to understand or predict, there is a second leadership func on that is also essenal, Mances says: the leader’s capacity to maximise the poten al of those under their charge. “Decreasing employees’ anxiety in the face of change by proving that challenges can become opportunities is going to be a cri cal enabler of peak performance and a compe ve advantage,” Mances insists.
Responding to the VUCA world with Vision, Understanding, Clarity, and Agility One way that leaders can prepare for VUCA environments is by heading off the factors at play, and by counteracting the quali es that make them challenging. According to Bob Johansen, a dis nguished fellow at the think tank Ins tute for the Future, effective VUCA
