In the new context of volatile, uncertain, complex and ambiguous (VUCA) markets, executives and organizational leaders are facing unknown situations that generate enormous confusion. The complexity increases if, within this context, they react abruptly using established, obsolete strategies, skills and methods, seeking to obtain results in the short term, but putting the survival of their organizations at risk. Many companies prioritize this partial, limited vision, instead of giving precedence to the transformation that leaders and organizations need to undertake in order to remain competitive in a digital environment.
A recent Unicon meeting on the future of executive education revealed executive development as the driver of effective leadership in every organization. Although this has been an elemental axiom since the dawn of management, we need to recognize that the traditional methods no longer work in today’s world.
The VUCA environment faced by the majority of markets and industries poses new, unknown challenges for directors and their organizations, particularly within the new digital context in which the speed of transformation required – in individuals and organizations is growing exponentially. According to a study by IDC, investment in such digital transformations will steadily grow more than 17%, to exceed 321 billion dollars in 2021. Technologies such as cloud computing, artificial intelligence artificial (AI), machine learning or the Internet of Things (IoT), among others, will set the pace. Facilitating this transition requires executives and leaders to develop a set of skills and competencies so as not to be left behind:
- Contextual intelligence: associated with understanding the organization’s particular environment. It consists of three fundamental components: hindsight, which implies taking advantage of and giving value to what lessons learned in the past and that are still useful; foresight, related to the capacity to express what you want to obtain and the actions to accomplish it; and insight, which allows the appropriate integration of the two previous points, to identify and define the desired future.
- Strategic intelligence: the capacity to anticipate trends and changes in the market and the organization’s value chain. This competency provides a conceptual system to facilitate and direct the required transformation. Together with contextual intelligence, it permits the clear definition of the ‘what’, ‘why’ and ‘how’ needed in organizational transformation.
- Learning agility and adaptability: refers to the capacity to learn rapidly and effectively from experience, including the immediate application of such learning to the individual’s and organization’s new contexts. This capacity and learning agility enhance tolerance for the ambiguity and uncertainty that currently exist.
- ‘Sensemaking’ and ‘visioning’: the former is associated with the process of making proper sense of the current reality, allowing the leader and group of collaborators to define the right course in the face of experiences, events or challenges that arise in a confused, ambiguous or unexpected manner. The latter makes it possible to create a map of the future, accompanied by a collage of diverse possibilities. Together, sense and vision generate and transmit the necessary clarity and motivation in the members of the organization.
- Storytelling: is a strategic competency and one of the most important individual assets, to create and consolidate relations and empathies among the members of a group or organization. It can have multiple purposes: to highlight the motivation behind the organization’s strategy and actions; socialize with and motivate new collaborators; transfer knowledge in the workplace during orientation; facilitate internal and external communication; develop leadership teams and skills; ‘connect’ with clients, consumers and partners in the value chain; communicate complex ideas and initiatives, etc. High-impact stories positively challenge the audience’s intellect, produce emotions, contextualize and contain messages ‘encapsulated’ within them. A characteristic associated with this is public speaking, since both substance and form are fundamental to achieving the desired objective.
- Emotional and social intelligence: is related to four areas: self-awareness, self-management, social awareness, and relationship management. It contributes to the relational capacity of the individual, strengthening personal networking and social capital, inside and outside the organization. Many people believe that this intelligence is the best predictor of effective leadership, since it is relevant in global contexts and broader settings. It facilitates learning and provides the capacity to anticipate, adapt to, create and sustain the required change.
- Authenticity: implies being and remaining loyal to one’s own identity and experiences, including the values, beliefs, emotions, needs and desires that characterize leaders or executives. Exercising an authentic leadership implies operating on a daily basis in accordance with our own identity. Achieving this requires a high level of self-knowledge and transparency, setting high ethical, moral and behavioral standards. Moreover, it implies being sufficiently open and empathic to others’ opinions and points of view, before making decisions impulsively or with agendas hidden from the members of the organization. Authenticity enhances credibility and reputation, as a positive differentiation to achieve effective leadership.
- Psychological capital: is related to the level of individual development, which affects personal satisfaction and performance. It consists of four psychological states, represented by the acronym HERO: hope, associated with the necessary desire and ambition to persevere in the accomplishment of the established goals; efficacy, which influences the capacity to achieve such objectives in dynamic, unforeseen contexts; resiliency, which makes it possible to address these adversities, resisting change and uncertainty in the environment; and optimism, related to the capacity to associate positive events with the team members and the decisions and actions implemented, and negative events as lessons learned, temporary situations related to specific aspects in the team and organizational dynamic.
- Creative thinking and innovative behavior: according to the World Economic Forum, creativity is one of the fundamental skills toward 2020. It contributes, among other things, to the construction of an organizational culture to generate ideas and initiatives correlated to products, services and processes that will enrich the organization’s value proposal and operations. From a strategic perspective, leadership must be positioned as the driver of innovation in two senses: establishing a work environment focused on creativity and its subsequent innovation, and as a means to achieve the competitiveness required in the organization given the existing changes and context.
- Global mindset and cultural intelligence: the ability to exercise a global leadership – regardless of the culture or context – is critical for the success of the organization. To accomplish this, cultural intelligence – defined as the capacity to relate to others and work effectively in culturally diverse contexts and situations – is fundamental. Both components make it possible to promote and manage the diversity and inclusion required in the organization.
- Collective leadership: being inclusive and involving collaborators in the analysis and decision-making processes generates empathy, commitment and motivation to achieve success in the organization. The leadership needed today cannot be authoritarian or associated with the power or position exercised; it must focus on facilitating and empowering employees at all levels. This capacity allows the promotion of decentralized decision making, fomenting high levels of collaboration and a sense of shared objectives within the team.
The cultivation of these skills builds a path for the effective leadership required in the organization. In the same way, and in order to get ahead in the context of this new normality, these skills and competencies need to be developed and valued, using them to drive three fundamental pillars to generate the impact and transformation required in the organization:
- People-focused. Extensive, large-scale change cannot occur without the involvement and motivation required in the organization’s talent. The desired transformation journey must be extremely clear, depicting the associated ‘what’ and ‘what for’. The lack of motivation, objectives and clear goals will be synonymous to marginal progress or imminent failure.
- Define and implement the required processes. Once the ‘what’ and ‘what for’ have been established, defining ‘how’ is fundamental. This is expressed through the processes and activities that are connected to the transition, considering the current and desired status in general, as well as in each of the areas and functions that comprise the organization.
- Establish the framework. The ‘what’, ‘why’ and ‘how’ will provide the foundation for establishing the platform upon which the transformation required in the organization will be implemented. Since predicting the future is highly complex, one of the most important considerations is to ensure that the support systems selected or developed comply with the necessary agility, scalability and interoperability.
The world of today offers a scenario in which uncertainty will be greater, more complex, ambiguous and dynamic, accompanied by diverse elements associated with the digital era. The executives and organizations who manage to develop the skills, competencies and initiatives to progress and stand out effectively – prioritizing a strategic over an operational or short-term vision – will be the ones who successfully rise above the challenges that both parties will face in the near future.