How do leaders cope with VUCA? (Volatility, Uncertainty, Complexity and Ambiguity)
It’s a judgement call …
There seems to be universal agreement that the post-Covid world will be characterised by a high degree of ongoing VUCA (Volatility, Uncertainty Complexity and Ambiguity) and continual change. This will have significant impact on the assessment’s organisations undertake when appointing leaders. The world of business post-Covid is yet to be defined as there are an increasing number of new drivers coming to the fore. These include geopolitical tensions impacting on global supply chains, digital impact and the increasing demands of ESG, all dictating the licence to operate. Business success will need to be measured in new ways.
Uncertainty is not going to go away and hence the ability to deal with it will define leadership success for the future. There are many talented leaders who have delivered impressive results pre-Covid who are struggling with current and future levels of ambiguity. Therefore, in today’s world , past performance will not be the sole predictor for future success. This presents an increasing challenge for many Nomination Committees and Chief People Officers (CPOs) to identify the leaders of tomorrow. Hoggett Bowers recently hosted an online event with a selected group of CPOs, from across multiple sectors, to consider leadership assessment going forward. To add another dimension to this we invited BIOSS to share insights and an overview of their proprietary assessment tool designed to measure the future performance of leaders who are faced with heightened levels of VUCA. This was followed by Q&A from the audience.
Mike Clasper, Chair of BIOSS, opened proceedings by providing some colour and context having also been a client of Bioss for over 20 years. Mike is also Chair of two FTSE 250 companies: Coats pie and SSP Group pie, and has previously chaired several private equity backed businesses. To set the scene, he described how both companies are global operators and each company had visibility of the emerging Covid-19 threats very early on in the global pandemic, based on their presence in Asia. This allowed each business to act swiftly during the early days of the pandemic. He referenced both SSP and Coats going into scenario planning mode and creating options on when and when not to act. He cited their ability to deal with VUCA, in both instances, as critical. Mike ended by postulating “how do you ensure that leadership teams have the cognitive capability to live with this complexity and ambiguity, so they are neither in denial nor being mentally stressed but capable of making wise judgements?” Robbie Stamp, CEO BIOSS, then introduced the company, which, for over 30 years, has conducted more than 160,000 conversations with people at all levels in organisations from the Board to the front line, in the private, public and third sectors, to help them better understand their capability, especially in relation to complexity and uncertainty across the globe.
BIOSS links people, work and context – three elements that underlay the success or failure of any project, strategy or purpose. Their consultants work with top teams and Boards to align strategy with Leadership, Governance, Ethics and Risk. Robbie referred to people that are ‘In Flow’, will make sound decisions, more consistently, in the face of the work they have been asked to do. He described ‘Flow’ as a dynamic relationship between challenge and capability and that people feel best able to use their judgement when the challenges offered by their work are matched to their capability to deliver them. Robbie illustrated this concept with the aid of the following charts:
He alluded to the fact that when individuals are ‘Out of Flow’, they feel either under or overwhelmed. ‘In Flow’, they feel engaged, energised and effective in their decision-making. As capability grows over time, individuals will instinctively seek greater challenge to sustain this sense of wellbeing. In the same way, an organisation ‘Out of Flow’ will eventually be overtaken or taken over. ‘In Flow’, however, organisations are confident in the face of change, and able to make the most of the opportunities and their environment. BIOSS offers practical tools for a deeper understanding of capability and challenge, helping individuals and organisations restore and sustain a state of ‘Flow’ thereby making effective decisions.
Q&A and Discussion
Q: Stress levels amongst our senior leadership cohort are a direct correlation with their inability to address the grey areas, which we have witnessed during the last 15-18 months. We can now see a direct corelation between the mindset of engineering leaders, who are struggling to deal with ambiguity versus our more imaginative and creative leadership types that are less fazed by uncertainty. Does this correlate with the findings of a BIOSS assessment?
A: The split is not an obvious one. However, in a heavily biased engineering environment where numerical capability is high, does not always necessarily translate into being able to make judgements where there is uncertainty. Meaning that there can be high levels of discomfort when dealing with complexity. However, the BIOSS assessment have shown no clear delineation between being able to make a judgement call with limited information and an individual’s engineering/numerical acumen.
The assessment is good at identifying those that are bounded by their capability together with bringing those who want to explore their experiences in a wider context more into the limelight.
Q: We have been training people to work in a certain way, but we now feel that we need to refresh/rethink how we manage and lead in the future versus how we train people today to provide greater stimulus and motivation. Do you have any thoughts on this?
A: BIOSS explores these limitations from the viewpoint of saying that someone does not have capability to do an unbounded role but has a lot of capability to do a good job in the organisation. So, one approach is to take away the judgements they are uncomfortable with, move them up or sideways and get them back ‘In Flow’. If you do not do this, you run the risk of generating mental stress.
Q: On your assessments how much do you take into account EQ vs IQ?
A: The assessment does not really look at EQ, we look for something different. We have found over the years we get a sense of style as to how people approach things and what we have found with the capability of people working in bounded spaces is either they develop really good social process skills; meaning that they are really good at how to time, phase, and offer their capability to their over worked colleagues. Or they are socially awkward, but their capability is recognised, and they are typically the smartest person in the room.
Meaning, they are not very good at embracing new forms of leadership and creating the conditions where everyone is ‘In Flow’, but rather they are Hero Leaders. As opposed to leaders who provide leadership associated with creating the conditions by which complex adaptive systems or organisations are ‘In Flow’.
Q: From the assessments you have undertaken, have you seen any bias either favouring female or male participants?
A: Based on over 160,000 BIOSS assessments the indications are that there is no gender skew. We are able to provide lots of examples of highly capable female leaders.
Q: Are there any themes or particular characteristics emerging from your assessment?
A: From a capability point of view, we have undertaken assignments across the world and have found real capability in leaders at all levels. In terms of trends, there is a move away from the classic Hero Leadership type to one which is more of a Steward Leader, a style of leadership that focuses on others, the community and society at large, rather than the self. Or a Servant Leader, which is a leadership philosophy built on the belief that the most effective leaders strive to serve others, rather than accrue power or take control.
Q: How would the process support me to work with our leaders in the organisation to demonstrate the need to recruit something different? The sector we work in is fairly incestuous and we need less engineers and more people with different skills from complementary sectors?
A: Senior leaders are often very bad at the scoping of a role. From experience we have found that people churn out a standard, ‘super-candidate’ brief for a role and no deep thought goes into essential versus desirable candidate experience and skills-set. It is typically a list of all the things you might want. Where our process comes into its own is through applying judgement associated with the complexity and seniority of the role and then selecting a shortlist of candidates and recommending the most suitable candidate who has the greatest capability to handle the complexities associated with that role. This provides added science to the judgement process.
Q: Will using the assessment help to ensure that you can achieve and maintain sustained diversity at Board level?
A: What we cannot do is solve the world’s problems around unconscious bias, but it can bring a group of people together who have the capability to sit on a Board. Mike referenced his own experience at Coats plc. which started with all white, male and antipodeans on the Board and ended up with ethnic Chinese, Indian and a 45/55 gender split. The assessment informed the Board that they could all play in the same space and have mutual respect.
Q: You talked about the feedback, what if someone does not recognise themselves in the feedback having completed the assessment?
A: This has only happened on a very small number of occasions. When it does happen, feedback is offered, firstly to enquire if the recipient recognises themself in the assessment and if not why, have we missed something? At a senior level when this happens there is always a feedback loop meaning that the first person who sees the report is the candidate. We would run a further session with those candidates who require greater dissemination and contextualisation of the output from the assessment to align capability and ‘Flow’.
As the global landscape of business continues to face uncertainty and complexity for many different reasons, it is clear that the expectations of what good leadership is, are changing.
The assessments which BIOSS conduct will not solve all leadership team issues on its own.
However, in a world where we are expecting leaders to have the right capability to make the best judgements, and do so more frequently, whilst not becoming stressed or overwhelmed, there is a greater need to understand this ability.
Evolving and getting the capability of the leadership teams to match the challenges have always been of utmost importance, even more so as we start to re-emerge from the pandemic. Understanding the dynamic relationship between challenge and capability so that people feel best placed to use their judgement is where BIOSS provides unique insight.
Hoggett Bowers has served our clients for the past five decades. We have amassed in-depth experience of working with and appointing leaders equipped to steer organisations through challenging as well as high growth business cycles, where judgement is of high value.
Never standing still we seek to remain at the forefront of thinking and regularly review what additional tools there are for clients to consider when facing new situations.
If you would like to talk to Mike Clasper or Robbie Stamp further please let us know and we would be delighted to make an introduction.
Hoggett Bowers are very grateful to all our guests and a special thank you to: