Welcome to the VUCA Economy
According to the Markit Global Business Outlook Survey , optimism fell sharply in the closing months of 2014, dropping to the lowest levels recorded since the survey began five years ago. More than 6,000 companies took part in the survey and the vast majority reported that their hiring and investment plans were at or near post-crisis lows; price expectations had deteriorated dramatically as well. The survey reported that business optimism fell across the board in all of the world’s largest developed countries, while business expectations fell throughout the main emerging markets. No one appears to be immune from the new wave of discouragement sweeping our world.
And no one seems to know what to do about it.
Macroeconomists, the former gurus of the financial world, can no longer predict what’s going to happen next with any degree of certainty. Government leaders and central bankers are likewise often just guessing. And the world’s fleet of high-performance businesses are stalled at the on-ramp of the global economy trying to find answers from repair manuals that might as well have been printed in 1973. It is a frightening situation.
There’s more to follow
The prediction we’re making at Light-Core is that this is just the start: we believe we’ve entered a prolonged period of chaos where volatility, uncertainty, complexity and ambiguity will rule the road and the drivers of any business brave enough to take on the challenge of entrepreneurialism are going to have to become adept at navigating bravely towards their goals regardless of the perceived danger that surrounds them. They’re going to have to figure out how to bring their team along with them. And they’re going to have to do it all in an environment that we believe is going to get a whole lot crazier before it gets any more manageable. If it ever does.
This has profound implications for how business leaders manage their companies.
It has become imperative that business leaders learn how to change the processes they rely on for generating measurable progress and if you have found your way to this document, chances are you’ve already figured that out. The old models don’t work. People today need a highly flexible approach to the work they do so they can greet new challenges assertively and with a strong faith in a productive outcome.
In fact, not just flexibility, but transformation is called for. And it’s not a question of “should we or should we not transform this company?” It’s a question of “how do we transform ourselves and our organizations so that our employees are not only coping with the new economic conditions, but they are thriving within them?” How do we help performance levels throughout our companies take flight?
In a VUCA environment, there is no such thing as waiting for the conditions to improve.
They probably won’t. But if you can master VUCA, you can claim a point of differentiation that will serve you and your business forever—no matter what is happening in the outside economy. Success in business today requires us to rewire the thinking at the heart of our leadership processes so that the company is no longer shackled by the outdated thought processes of the last century. We need to develop a leadership team where each member becomes devoted to helping the company, and each other, thrive.
If you’d like to find out how Light-Core can support your organization to unprecedented returns in the months and years ahead, we invite you to get in touch.
We excel at helping businesses navigate change.