Understanding the Challenges of a VUCA Environment

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VUCA stands for volatility, uncertainty, complexity, and ambiguity. Six corporate leaders says they’re seeing all aspects of it.

At Pratt & Whitney, Leduc reinforced culture and values alignment through periodic conversations at all levels. “We have this thing called performance connections,” he says. “It is different than a performance evaluation. We sit with our direct [reports] three times a year. It’s really, ‘How’s it going? What can I do to help you? Is there anything I can do to make this easier—more money, more capital, whatever it is?’ And also, my question is, ‘What are you doing to change the culture? What have you done in the last four months, since I saw you last, to change the culture?’”

Create a Learning Organization

Second, the executives are transforming their companies into learning organizations. They are encouraging experimentation with new products, services and procedures. From corporate R&D “skunk works” to small-scale pilot projects to cross-functional project teams, they are investing in experiments with new ways of doing business within their markets.

They are also creating conditions where the organization can learn from experience, making “work” the “curriculum” for improvement and innovation. Many employed after-action reviews on a routine basis, where work groups take stock of their collective performance following major events or tasks, looking at what worked, what went wrong and what needs to be improved. For example, to facilitate organizational learning, Fucci at Deloitte engages the firm’s partners in conversations about specific events. Several innovations resulted from this process.

Pratt & Whitney’s Leduc recently brought together his executive leadership team to review actions taken over the past nine months to implement culture change and align systems. He also recognizes that there will be times when things don’t go as planned, and it is important to learn from mistakes as well as successes. “I will tell you that in virtually every meeting we have now, we have a conversation around ‘what went well, what could we have done better and what have we learned from this?’” says Leduc.

Tony Guzzi at EMCOR says the CEO’s reaction to failure can build trust and reinforce the company’s values. “When you’re at the top of an organization, bad news needs to travel relatively fast, right?” says Guzzi. “And really bad news has to travel exceptionally fast. The only way that really bad news will travel exceptionally fast is if you build a culture of trust—that when someone gives you that bad news and they’ve been a good performer and made good decisions—even if they haven’t—that you’re going to react appropriately. If they think you will immediately fly off the handle or that everybody around it goes into cover-up mode, then that’s not going to be a good outcome.”

“When you’re at the top of an organization, bad news needs to travel relatively fast, right? And really bad news has to travel exceptionally fast.”

Invest in Your People

Finally, the executives are investing heavily in employee learning and leader development. They understand that organizational agility requires employees who have the knowledge, skills and personal attributes to operate within the corporate culture they are trying to establish. Employee training programs are planned and delivered to create a workforce that embodies the culture. Leader development efforts leverage stretch assignments and work experiences, which are supplemented with supportive coaching and mentoring to grow and expand the leadership bench of potential executives.


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