As business leaders look toward the new year, uncertainty is a defining condition of the VUCA (Volatile, Uncertain, Complex, Ambiguous) business environment. Economic volatility, rapid technological change, shifting regulations, workforce expectations, and geopolitical dynamics affect for-profit and non-profit organizations alike. Leaders who succeed will be those who build organizations capable of adapting quickly and deliberately.
As we stated earlier, this level of uncertainty is actual certainty that must be viewed as a strategic input to business planning and budgets. The two tools we use regularly with our clients are the PESTEL (Political, Economic, Sociocultural, Technical, Environmental, Legal) Environment Analysis and the SWOT (Strengths, Weaknesses, Opportunities, Threats) Synthesis. While traditional strategic planning often assumes relative stability, we now see and encourage a much faster cadence in evaluating changing business conditions. At this point, a rolling six-month look ahead makes good business sense.
We know that uncertainty creates anxiety among employees, boards, donors, and clients among the many stakeholders the leader communicates with. With a faster level of flexibility and adaptability to changing conditions, leaders need to communicate clearly about what is known, what is uncertain, and how decisions will be made. Consistent, honest communication builds trust and keeps organizations aligned even when conditions change at a faster pace.
For years, our success as a business leader was built on contingency planning around a set of
assumptions and conditions that helped create multiple scenarios versus one linear path for success. Using best case, worst case and most-likely case scenarios allows the leader and their teams to act quickly when assumptions come true or not and when conditions change that affect the overall mission and strategy. The value is not in predicting which scenario will occur, but in identifying strategic moves that perform reasonably well across all of them such as strengthening core capabilities, improving data visibility, and/or deepening stakeholder relationships.
Earlier this year, we wrote about leaders maintaining
focus on the organizational mission in these uncertain environments. The long-term vision and mission become much more important as long-term plans become less reliable. Leaders should be clear about purpose, values, and the desired results while breaking execution into shorter cycles to learn, adjust, and reallocate resources without losing strategic focus.
Whether leading a corporate business, entrepreneurial business or mission-driven organization, flexibility is a strategic asset. As for-profit leaders, maintaining contingency funds, leveraging modular initiatives, and focusing on key partnerships that can scale up or down. As non-profit leaders, a key strategy is diversifying funding sources.
In uncertain conditions, speed and quality of decisions matter more than perfect information. Two mantras we live by, and coach our clients to embrace are, “The goal is to achieve imperfect excellence” and “Be comfortable making good B+ decisions”. The implication in both of these mantras is the search for perfect is a fool’s errand both in the leader’s expectation and the leader’s decision-making process. Equally important is leading in a culture where revising decisions based on new information, even at a rapid pace is seen as discipline, not failure.
In the new year, the goal is for leaders to not try and outguess the future, but to prepare their organization to meet it head-on. Leaders who embrace uncertainty with vision, understanding, courage and adaptability (VUCA 2.0) will not only endure the disruption, they will create a strategy that shapes what comes next to creating sustainable success!
How are you leading your team into next year’s uncertainty? If you’re not sure,
we can help.
Lead Well!
