The importance of good leadership in a VUCA world

While leadership has been a key topic of discussion over the past hundred years, it is now a critical issue in organisations across the globe in the present economic, social and business context. Bennis and Nanus (1985) were the first to describe that we are living in a VUCA world (Volatile, Uncertain, Complex and Ambiguous). However, it was not until COVID-19 happened that businesses finally accepted the truth of what the researchers were saying. Over the past two years, there have been a plethora of global phenomena impacting our world; Black Lives Matter, the “Me Too” movement, the US election challenges, global climate change, to name just a few. These phenomena are shifting our worldview and changing the way that we do things. Living in these exceptional times means that we need to adapt and find new ways of being, and specifically, we need to find new ways of leading. These extraordinary times call for extraordinary leaders to step up and be counted.

Researchers have been telling us for a long time that a significant shift needs to take place in how we define, identify, promote, and develop leaders to ensure that they are successful in today’s VUCA world. We can no longer allow individuals in positions of power to get away with being ‘old school’ or choosing not to lead effectively. Globally we invest approximately $366 billion in developing leaders (Westfall, 2019). In contrast, Ashford and DeRue (2010) noted that nearly sixty percent of companies face leadership shortages. Thirty-one percent expect a lack of leadership capability to impact organisational outcomes negatively. We can all identify people who do not deliver effective leadership, and there is a plethora of evidence of toxic leadership behaviours in all business sectors. The time has come for businesses to make some tough decisions and stop appointing and promoting people who are not prepared, uninterested or can’t lead people. In 2022 and beyond, we need to demand that those in positional of power take responsibility for their impact and actively develop their capacity to lead. 

Times have changed, and the focus of leadership needs to change. Leadership research has evolved over the past ten years, and it is now clear that to thrive in the VUCA world, leaders must first develop their personal attributes. Research tells us that effective leadership requires the internal attribute of resilience (Folan, 2019). Developing resilience enables leaders to thrive in the VUCA world and ensures that they can deliver a constructive leadership style. 

Without effective leadership, organisations will, at minimum, fail to achieve their full potential, and at the other end, poor leadership will result in the organisation’s demise. Unfortunately, a lack of effective leadership will result in negative repercussions for all involved. 

In the present business context, with its volatile economic and social environments and constantly changing sector requirements, the ability to manage and lead as we did in the past is no longer sufficient. Leadership 2022 and beyond requires that we learn to adapt to the VUCA world; simultaneously, leaders need to maintain and enhance organisational performance and ensure alignment with the broader business context (Judge, Naoumova & Douglas, 2009). Maintaining business outcomes in today’s world requires leaders to stay ahead of the changing business requirements and deliver competitive advantages for their organisations by continuing to achieve (Draghici & Draghici, 2007). 

This might all sound overwhelming and challenging. If so, that’s because it can be, however achieving it is far from impossible. You, and only you, can craft your leadership and build your resilience. But once you do, you will achieve far greater success than you ever imagined. To enhance leadership outcomes, you first need to do the internal work to build resilience. For companies to meet the challenge of working in a VUCA world, their leaders must develop new attributes, skills and ways of thinking and working that result in sustainable outcomes for themselves and their businesses (Schein, 2009). For organisations to grow and flourish, they need to reassess leadership requirements and address resilience levels. 

Ensuring effective leadership is one of the essential components in delivering an organisation’s competitive advantage and allows it to operate successfully in a dynamic marketplace. Just look at the most successful companies in the world. Many share a commonality—strong leadership that delivers an organisational culture that enhances everyone’s dialogue, empowerment, and engagement. They aren’t standing still, or resting on their laurels, or hanging out waiting for the tides to turn. Instead, they are innovating, reinventing, and working hard to improve their businesses, no matter the context. Doing this requires solid internal leadership and the capacity to flourish in the context of challenges. 

In simple terms, it is time to focus on enhancing to enable sustainable leadership so that our organisations can thrive.

Written by Dr. Lynda Folan.

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