Leadership Tangles Blog

Dealing with the “U” in VUCA in a Down Economy

Posted by Marcia Ruben on Thu, Oct 30, 2008

Economic EnvironmentVolatility is the first aspect of a VUCA environment. Uncertainty is the second. Today’s economic environment is volatile. Yesterday, the stock market rose to 800 points or 10% in spite of gloomy news about the economic outlook. Consumer confidence is down, the housing market continues to slide, yet federal money is beginning to flow. The future is indeed uncertain.

More than ever, not everything is knowable to an organization’s leaders. Owen Jacobs, who I referred to in yesterday’s post, argues that leaders may have all of the important elements of a situation but may not be able to connect all of the dots. The information may be coming from the outside environment, or within the organization. Therefore, in order to help their organizations connect the dots, leaders need to design their organizations so that information can more easily turn into knowledge, and that knowledge can be acted upon quickly.

This means making sure that you have created an environment in which employees are encouraged to freely speak up. I recently moderated a panel of distinguished business leaders here in San Francisco. While discussing this topic, a top banking executive told us that she has been on the road constantly, holding All-Hands and skip level meetings. When an employee at any level asks a challenging question, she has learned, and taught her leaders, to not react. By listening with an open ear, and answering all questions honestly and openly, she has created an environment that encourages trust. By encouraging trust, she is able to effectively gather the intelligence she needs to make more intelligent decisions.

The more uncertain the environment, the more leaders must open the lines of communication. I have worked with leaders who wanted to hold all information tight until they had everything figured out. Inevitably, this fuels the rumor mill. On the other hand, I have worked with leaders who are comfortable communicating both what they know and don’t know. Ironically, this creates more trust.

What are you doing to productively address the uncertainty in your business environment?

For those of you who want to read more about VUCA, you can find a description online by clicking here.

Tags: VUCA, leadership, uncertaintly, chaos

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Marcia Ruben PH.D., PCC, CMC 

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