Leadership Tangles Blog

The current economic meltdown seemed to come out of the blue. Sure, there were warning signs that the economy was slowing, beginning early this year. I was in Taiwan on business the week of September 15, and was stunned to read headlines that the whole global system was in danger of a systemic meltdown. If ever there was a lesson in the importance of reading and heeding warning signs, this is it.

This morning's San Francisco Chronicle featured a story in remembrance of the Jonestown massacres thirty years ago. In the front page article, Congresswoman Jackie Spier recalls her trip to Jonestown with Congressman Leo Ryan . For the past several weeks, the daily financial news has been grimmer and grimmer. Business leaders are faced with rising costs, uncertain revenue projections, and a shortfall of cash and credit.

I talked about the volatility, uncertainty, and complexity in previous posts. In this post I discuss ambiguity, the fourth element of VUCA. In my executive coaching practice, I have encountered business leaders who have varying degrees of comfort with ambiguity. When things are ambiguous, they are not clear. Sometimes the situation itself is unclear. Sometimes the problem and/or solution are both unclear. Often, the very business environment itself is ambiguous. When leaders are not clear about what a particular event or situation means, they become frozen and cannot make decisions. For instance, in our current financial environment, we know that the Federal government has released funds to banks. What is unclear right now is how those funds will be disbursed, or if they will be disbursed, the level of risk, and if the stimulus packages will even work.

Nearly twenty years ago, I was working for Wilson Learning, an international human resource development firm. In my first role as a Consultant, it was my job to understand our national clients and the business environment in which they operated. In the late 1980’s, I was attending a meeting of consultants in Eden Prairie, Minnesota. One of our consulting colleagues from the east coast commented that an emerging theme was the globalization of American corporations. Many of our national accounts, like AT&T, DuPont, IBM, and others were going global in a big way. Shortly after, as I moved into an Account Executive role on the west coast, it became clear that my high technology clients were expanding their existing operations in Europe and Asia. Selling intangibles to large accounts was already complex. We had to understand the products, markets, competition, organizational cultures, leadership styles, and our own competition. It became imperative to also understand the offshore cultures, as well as the impact this expanded globalization had on the organizational dynamics of our client firms. This was all before the advent of technology.

Volatility 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.

In yesterday's post, I made reference to the term VUCA. VUCA stands for volatility, uncertainty, complexity, and ambiguity. Executive leaders have been increasingly challenged with VUCA, but in today's market, more so than ever. In the past six weeks, it feels like we have been collectively on an “E” ticket ride, although not at Disneyland! As the stock market has risen and fallen at dizzying levels, and with the credit markets in a vise, we have held our collective breaths. The business leaders I have spoken to or visited are struggling to make sense of the situation. Today, I will address the “V” in volatility.

Welcome! I have been meaning to write a blog for a long time. As I have watched the financial markets spin out of control, and my leadership clients express true concern about their futures, I could hold off no longer. I have been in the field of leadership and organizational development for a number of years. I am in this field because I am passionately committed to igniting leadership potential and organizational transformation. Six years ago, I decided to up my game by entering a doctoral program. I graduated with my Ph.D. in March, 2007. Through that intense process, combined with more than twenty-five years working with leaders in a multitude of corporations, small, medium, and large, I feel uniquely equipped to lend my voice to these troubled times.