Most anyone doing business in Asia sees first-hand the realities of “VUCA” – a business environment marked by volatility, uncertainty, complexity, and ambiguity. I know that was the case for me leading Duke Corporate Education’s activities in Asia for three years. The Association for Talent Development’s annual “State of the Training Industry” report underscores why learning and development needs to build the capabilities organisations require to survive and thrive in this VUCA environment.
The VUCA vortex is impacting organisations around the world. In Asia, we are seeing this on display first-hand. Our Asia team is working with several clients that are experiencing VUCA in real time. Two of them are large industrial/conglomerates in Southeast Asia. They are both aggressively pursuing digitally-driven innovation initiatives to ‘disrupt themselves’ before competitors do. As one of them told us, “we can’t afford to wait 10 years for return on investment (ROI) from factory investments. We need to do Silicon Valley style test and learn projects that help us quickly figure out new opportunities and business models.”
These are just two of many companies in Asia that are literally fighting for their lives in an era of digital Darwinism where markets shift in the blink of an eye, disruptive technologies wipe out age-old industries at unprecedented rates, and previously successful products and services are rendered obsolete almost overnight. Overall, Duke Corporate Education sees that there are more people, faster growth and more extreme volatility in Asia compared to other parts of the world.
The disruption theme was also highlighted in the Singaporean government’s Committee on the Future Economy report. Strategy 6 of the report outlines plans to implement 23 Industry Transformation Maps (covering around 80% of the economy) that would enhance the country’s ability to compete in today’s world.
As global digital connectivity grows exponentially, survival anxiety within organisations is compounding rapidly. Incumbent organisations in established industries are finding themselves increasingly vulnerable to the strengthening pull of the VUCA vortex. Today’s industry leaders around the world believe that roughly 4 of the top 10 incumbents in terms of market share will be displaced within the next five years.
Agility is Key
The primary purpose of leadership in today’s environment is to ensure that organisations become more responsive to market shifts, more resilient to unpredicted technological disruptions, and more adaptive to unforeseen deviations from expected norms. Agility is crucial to business success. The key to creating that agility lies in developing a leadership system that:
- Maintains a perpetual state of readiness for the unexpected by sensing shifts in the marketplace sooner than others
- Anticipates how these shifts will likely cause value to migrate within the marketplace
- Orchestrates the subtle and swift tweaks in organisational structures, systems, and processes to reposition the firm to capture optimal value within the shifted marketplace
Simply put, organisation survival in an era of digital Darwinism requires a leadership system that is more responsive, resilient, and adaptive than the competition. In fact, organisations that are surviving and thriving financially today are three times more likely to have VUCA-ready leaders than organisations that are underperforming in the same marketplace.
Unfortunately, only 15 percent of organisations today believe they have a strong leadership bench, and 89 percent of executives have rated the need to strengthen, re-engineer, and improve organisational leadership as an important business priority. However, most of these organisations are not confident that traditional development approaches are producing leaders with the capabilities or at the pace needed to address current and future needs. Zooming in on Asia, there is a profound leadership vacuum facing companies. Training using methods of the west doesn’t work.
Traditional, role-, competency-, and pipeline-focused educational interventions make the errant assumption that organisation performance issues stem largely from leadership knowledge deficiencies. The reality is that organisations are a complex amalgamation of people, processes, and technologies, and the context within which leaders apply new learning is at least as important in developing leadership capability as the content delivered in the classroom.
Developing individual leadership competencies is but one element in building VUCA-ready leadership. In addition to thinking their way into a new way of acting through classroom instruction, leaders must act their way into a new way of thinking by working across boundaries to bring together disparate and diverse sets of people, processes, and technologies and reconfiguring them in real time to increase the likelihood of organisation survival. This will mean rethinking and reorienting much of what we previously have believed about what it means to lead and what it means to learn.
The first step on the journey to defining the 2.0 version of leadership development requires reframing the challenge from one of efficiently developing individual leadership competencies to one of effectively designing a VUCA-ready leadership system that enables the organisation to be more responsive, resilient, and agile. Buckle up and take action!
Tony O’Driscoll is global head of Strategic Leadership Solutions for Duke CE, where he focuses on identifying and implementing cutting-edge learning strategies and methodologies to get leadership ready for what’s next.