Decision-making under VUCA conditions

VUCA

I was recently asked if there is a decision making approach that’s designed specifically for situations characterized by volatility, uncertainty, complexity, and ambiguity (VUCA). I don’t know of a one-size-fits-all solution, but I can speak to what’s needed to optimize decisions made in VUCA conditions. Here are the main ingredients:

Agility

  1. Acrobatic-catThe ability to adjust one’s decision-making approach to meet the demands of a particular problem: For example, some problems must be addressed immediately and autocratically, others are best addressed more collaboratively and with a greater focus on data collection and perspective seeking.
  2. The ability to make high-quality autocratic decisions: By setting up systems that keep stakeholders continuously appraised of one another’s perspectives and data, we can improve the quality of autocratic decisions by ensuring that there are fewer surprises and that rapid decisions are informed decisions.
  3. Dynamic steering: Every leader in an organization should be constantly cultivating this skill. It increases the agility of teams and organizations by building skill for efficient decision-making and timely adjustment.

The most complete information possible (under conditions in which complete information is impossible), which requires:

  1. Collaborative capacity: highly complex problems, by definition, are beyond the comprehension of even the most developed individuals. Collaborative skills ensure that leaders can effectively leverage key perspectives.
  2. Systems and structures that foster ongoing two-way communication up and down the organizational hierarchy, across departments, divisions, and teams, and between internal and external stakeholders.
  3. Systems and structures that cultivate excellent perspective-taking and -seeking skills. These include…
    • Building in opportunities for collaborative decision-making,  
    • “Double linking”—the formal inclusion, in high-stakes or policy decision-making, of representatives from lower and higher levels in the organizational hierarchy or from cross-disciplinary teams, and
    • Embedding virtuous cycles to ensure that all processes are continuously moving toward higher functioning states, and that employees are constantly building knowledge and skills.

Where appropriate, technologies for constructing models of highly complex problems:

  • For a comprehensive overview of options, see Decision Making Under Uncertainty: Theory and Application, by Mykel J. Kochenderfer.

Our flagship adult assessment, the Leadership Decision-Making Assessment (LDMA), was designed for the US government to document and assess the level of sophistication individuals and teams demonstrate on key skills for making optimal decisions in VUCA conditions.

 

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Virtuous cycles and complexity in the workplace

Conventional top-down project planning and decision making approaches, in combination with systems and structures that enforce conventional hierarchical relationships work pretty well in the absence of volatility, uncertainty, and change. But the same structures that enforce order and help mitigate risk under relatively stable conditions also reduce adaptivity, which means that in our current highly complex and volatile marketplace, many conventionally structured organizations are struggling to adapt.

Several specific needs have been identified, including:

  1. Employees who embrace change and lifelong learning (especially with respect to their capacity to work with increasing complexity),
  2. Organizational cultures characterized by continuous learning & development, innovation, engagement, and collaboration within and across teams,
  3. Decision-making processes, planning processes, people development processes, and governance structures that actively support 1 & 2.

Most change processes address 1 and 2, but there has been less attention to 3. Until recently.

VCoLMany of the change processes that address number 3 involve the creative use of intentional virtuous cycles—like the one that’s at the core of our learning model (VCoL+7). Virtuous cycles like VCoL, scrum, dynamic steering, and design thinking are now being implemented in large organizations to increase agility, innovation, collaboration, learning, and engagement. And when it comes to managing complexity, they may well be the most effective tools available.

Map of Google's organizational structureAs an example, Google, which works with agile & scrum as well as other virtuous cycles, is well known for it’s culture of collaboration, continuous learning, and innovation. And its organizational structure, which eliminates silos and is sustained by cross-team collaboration, is part of what keeps that culture alive.

VCoL, like other virtuous cycles, can be embedded in organizational systems to help foster a learning culture. The classic, The fifth discipline: The art & practice of the learning organization (Peter Senge), and the more accessible, An everyone culture: Becoming a deliberately developmental organization (Robert Kegan, Lisa Laskow Lahey) describe two approaches that involve VCoLs. Lectical Assessments are designed to support approaches like these—improving performance by fostering optimal learning and development, and supporting dynamic steering by measuring program effectiveness.

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