As many of us have experienced the VUCA—volatility, uncertainty, complexity, and ambiguity—that business can bring, it’s critical to understand how to lead in these trying situations as well. Joseph Michelli, CEO of The Michelli Experience, speaker, and New York Times best-selling author, joins us on today’s episode of CBT Now to discuss how to drive company success through VUCA.
Volatility
According to Michelli, volatility is the propensity for things to change abruptly and unpredictably, especially for the worst. During these difficult times, when the world is confronting inflation, rising interest rates, and predictions of an approaching recession, it is vital for businesses to capitalize on volatility. According to Michelli, “many firms that manage volatility well have conducted research.” He observes that volatility frequently propels particular business leaders to gain new skill sets, which, in turn, propel those skill sets to the front line. Michelli explains, “the more they use and develop these talents, the better equipped they will be to deal with a world that isn’t simply a product of COVID but also the way the interconnected world economy operates.”
Uncertainty
Scenario planning, which focuses on the factors that will likely be affected in a specific time span, is a response to uncertain times. Factors like the pestle model examine the primary external factors affecting an organization’s political, economic, sociological, technological, legal, and environmental influences. This concept can be applied in a variety of situations and can help professionals make strategic decisions. The realization is that, as Michelli underlines, “we need to not only forecast what will happen, but forecast an objective empirical analysis of what the data is saying about existing circumstances and let’s estimate the volume of what we’re going to do.”
Complexity
According to Michelli, certain complex aspects can be managed, while others cannot. For instance, designing a business is complex in and of itself, but there are ways to eliminate some of the processes that allowed the business to develop into what it is now. Identifying the right automation, for instance, can help cut down on repetitive work. The complexity also increased when the world became more remote, which was necessary. Government efforts to institute 32-hour work weeks, increase incentives, and the rate at which the world changes all contribute to complexity.
“When in doubt, create a mistake trying to add value.” — Joseph Michelli
Ambiguity
“The best thing a leader can do to exercise ambiguity is to set your clearest course of action,” Michelli identifies. He adds, “it’s how you plan to move forward.” Michelli also implores decision-makers to act on the negative and choose a course of action based on adequate data. Michelli claims, “with the obstacles presented by the pandemic, we need to take these VUCA qualities and use them to navigate through similar challenges in the future.”
