The Importance of Understanding For Business Leaders in a VUCA World

By: Supriya Desai

Furious activity is no substitute for understanding. - H.H Williams

Virtual show of hands, please! As compared to a year ago:

• How many of you have less time to do your jobs?
• How many of you think your work environment is more complex?
• How many of you feel more pressure to quickly solve problems?

You’re not alone. In today’s VUCA world – characterized by greater Volatility, Uncertainty, Complexity and Ambiguity - business leaders and managers have less time to contend with greater complexity and unpredictability. and more pressure to make quick decisions. These modern circumstances are rife with tension.

Amid this VUCA-driven tension, a danger lurks: insufficient understanding. If you are under pressure to make sense of an increasingly complicated and dynamic business environment and take right action, but don’t have enough time and space to understand circumstances sufficiently, you invite at least 3 serious and costly risks:

1. Investments in the wrong problem, wrong solution, or both.
2. Problems that persist and become the status quo because they seem intractable.
3. Disengaged employees who see that management does not “get it” and is not asking those who do.

Risks ‘in action’

Managers making strategic decisions need to understand drivers in order to avoid solving for the wrong problem or implementing the wrong solution. Yet, the information most readily available to us does not always clue us in to what’s really at play. Take last year’s example in the cable industry. In April 2015, some observers could not understand why regulators killed the proposed Comcast-Time Warner Cable merger (note: TWC is now Spectrum). Geographical competition for cable TV share did not exist between the two companies, so what was the problem, they asked. The real problem was visible if one looked beyond conventional measures: it was the impact of a possible merger on broadband Internet access used to watch streaming TV by a rapidly growing number of Americans. A merged company would have controlled roughly 60% of broadband connections, possibly negatively impacting the 83% of us who access the Internet through our cable companies. The players involved knew it; the regulators knew it; only those who relied on conventional and easily available market analyses failed to understand the drivers.

Insufficient understanding can also lead to persistent problems. “Strong interpersonal skills” is listed as a required capability for virtually every job, yet it has continued to be an elusive skill for many. I recall the course I took in 1996 as a new manager in which I learned how to mesh my communications style with others’ (at least in theory). Yet how much better are we at conversing with, relating to and understanding each other? Some observers of the current American political system might say we are worse off. Part of the problem may be the quagmire of real time learning: for most adults, teaching moments come on the job, in the middle of a conversation, as one is crafting an email message. Yet, this is precisely when we find it most difficult to be open to learning. Without deeper understanding of our impact on others, the problem of frustrated interpersonal communications persists. (There is hope! For those committed to increasing their understanding of each other, check out the Crystal email software program that may revolutionize how we interact through algorithms).

Key stakeholders will disengage from a situation (or company) if they are not properly understood. Take the efforts to improve corporate gender diversity. An interesting recent Bain & Co. study showed women starting out their corporate careers with more aspiration than men. But something goes awry as women progress: just two years into their corporate careers, women’s ambition declines significantly. What is occurring in their early professional experiences that disengages female workers from the “corporate ladder?” Notwithstanding personal priorities, it may be that companies are wrongly applying the same definition of success to women and men. For many women, ambition encompasses professional and personal goals, so professional success that only comes at the expense of personal needs is far less appealing to most women. We see this lack of fundamental understanding reflected in the number of women who leave corporate America to start their own businesses.

Buck the pressure

To avoid the risks of leaping to conclusions in a VUCA world, 21 century leaders and managers need to take a moment to better understand the pain, the problem and its potential causes. How?

Ask; who, what, where, when, how and why still rank as the most useful questions in virtually any situation. It might seem simplistic to some, but asking powerful, fundamental questions can make a brilliant difference.

Recently, I worked with a couple of senior executives at a well-established professional services firm to help them plan an executive team kick off of a top-line revenue growth effort. A key change would be to reorganize the sales function and introduce a new lead-generation role into the structure. The goal for our planning meeting was to walk out with an agenda for their executive kickoff session that would create positive momentum for change.

The conversation then shifted. In the past, I have been asked for help to design a pre-determined but ultimately ineffective solution, so I asked my two clients to step back and build a shared understanding among the 3 of us of the problem, the pain and how the reorganization would address these issues. I asked a number of questions (my intention is in italics following each question), including:

• What are the drivers of stagnant growth? (Have they looked at other options or been single-minded and therefore susceptible to confirmation bias?)
• How confident are you that those are the correct drivers of the problem? What data do you have to back up your hypotheses? (How sound will this investment be? If you create a new sales role and reorganize the entire function, how confident are you that the problem will get resolved?)
• Does the revenue problem show up in leads or in conversion? (If they want to create a new role, is it focused on addressing the actual problem?)
• Is your goal in the executive team meeting to agree to a direction or convince them of the right one? (How far along is the executive team in their desire to implement this solution?)

As they responded to each question, they began to realize they needed to gather a few pieces of relevant data before moving forward with the restructuring. Like many top executive teams, theirs included strong personalities, so convincing each other based on gut instinct or anecdotal experience would be a losing proposition. Further, it was not the right way to make the choice about strategic direction. In fact, they admitted many past strategic decisions had been made that way and their current circumstances might be traceable to that pattern. The duration of the problem and the pressure to compete, to gain market share, and to generate growth had led them – temporarily – to believe they understood the problem well enough to identify the right solution, when in fact they realized that they did not.

In an environment where change is a constant, pervasive force, one of the primary goals of leaders’ must be to understand the issue, the problem, the pain and causes. With sufficient understanding, leaders avoid making change for change’s sake, throwing valuable resources at the wrong solutions, or disengaging employees who lose trust in their ability to steer smoothly through the rough waters of a VUCA world.

This article previously appeared on Desai Transformation.

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Supriya Desai is a strategic change and transformation leader and professionally certified leadership coach who has led and guided dozens of strategic initiatives from Six Sigma deployments to global reorganizations, and post-merger integrations to global operating model transformations. She is Founder & Managing Principal of ASC* Advisory (www.ascadvisory.co), an executive advisory and coaching firm specializing in corporate strategy execution, change and transformation advisory services, and change leadership coaching.