Managing Business Growth in our VUCA world
In the second of his articles looking at business growth, Mark Hallam considers the impacts of increasingly uncertain environments.
Complacency can be a major threat to a growing business and assuming that the business will continue to be successful simply because it has been in the past demonstrates a sense of arrogance in an increasingly VUCA world.
The acronym VUCA (Volatility, Uncertainty, Complexity, Ambiguity) is a term to cover the various dimensions of an uncontrollable and evermore competitive environment. This is something we have become very familiar with recent events from “Brexit”, the “Trump Effect” and frustration over “Climate Change” to name but a few.
You may be familiar with VUCA, and the challenges it poses to leadership and more importantly the way we develop our current and future leaders.
What does VUCA mean?
VOLATILITY : Where a change is unexpected and is of unknown duration but it isn’t necessarily hard to understand.
UNCERTAINTY : When due to change there is a lack of information and instability which is not understood.
COMPLEXITY : Where the situation has many complex parts and variables with snippets of information in varying amounts, which are overwhelming.
AMBIGUITY : Where there is multiple cause and effects taking charge creating the unknown of the unknown!
To succeed in a VUCA world, we must focus on the areas that produce the highest return for our organisations and the first priority must be developing and articulating a clear vision to drive the organisation forward.
Traditional leadership approaches are struggling with the speed of change in today’s business environment. Unless businesses begin to become more open minded about handling these changes and encourage ideas from their own Change Makers the future environment looks bleak with some businesses not even surviving. The aim is to equip leaders with the qualities to flip the VUCA acronym to a positive outcome of Vision, Understanding, Collaboration, Agility.
VUCA leaders never stop learning, adopting a different mind-set and continuously developing their skills. Market conditions continually change and it becomes necessary to closely monitor and update business plans. Observing this important discipline is essential as original plans and decisions may be based on out of date information and need immediate attention. The same philosophy applies to individuals.
By involving employees, it’s far easier to encourage them to share their thoughts more freely and what they know about customers, the market, and other aspects of the business will always add value.
This engagement breeds a proactive culture, which becomes infectious and heightens morale. Motivated workforces that understand their worth to the business generally foster loyalty and serves to increase productivity.
Existing customer relationships often attract greater potential for profit and normally provide reliable cash flow, whereas a new customer may increase turnover, but attract lower profit margins, higher operating activity and may not be as sustainable in the long term.
Every business needs to be aware of new opportunities, as there are obvious risks to being too dependent on existing customers, particularly if they are few. By diversifying the customer base, it lowers those risks. However, be warned: “All that Glitters may not be Gold”!
The majority never welcomes change in any organisation, as familiarity and routine are upset. Loss of comfort zones always fosters an air of uncertainty and through any period of change strong leadership from management is paramount.
Change is difficult because people over estimate the value of what they have and under estimate the value of what they may gain by giving it up.
At The Change Maker Group, we provide practical specialist support through engagement, coaching, training and programme delivery and work alongside teams building and implementing new systems and processes to engage the workforce, developing leaders of change.
The Change Maker Group are a passionate and diverse team of highly experienced change facilitators, consultants, coaches and trainers who are on a mission to create millions of “Change Makers”, enabling thousands of organisations to reach their full potential.
We believe that people learn and engage better when they are inspired and empowered and we help provide the right environment for developed people to make an impact.
By creating “Change Makers” within organisations, who have the right mind-sets, motivation and skills, we help them build resilience and ensure change is sustainable, in a pragmatic and enjoyable way thus rendering services such as ours redundant for the future wellbeing of the organisation.
Contact Mark at Mark@thechangemakergroup.com