Thriving in a VUCA-World

Thriving in a VUCA-World

An Interview with Alison Horstmeyer, conducted by Marcel Bamert of Noventa Consulting AG.

Intro

In this interview, Alison Horstmeyer elaborates on how organizations can cultivate intellectual curiosity to thrive in the ever-changing business environment, which is described by the acronym VUCA, which stands for volatility, uncertainty, complexity, and ambiguity.

Out of the perspective of Noventa Consulting, intellectual curiosity plays a vital role in the lean context; it is a critical success factor on the journey to building a sustainable continuous improvement culture.

Who are you and what do you do?

I am a former Fortune 500 corporate executive turned executive consultant and researcher. I’m focusing on helping leaders and individuals develop their respective inner work and developing the next generation of executive education programs to support this development because the inner work is becoming increasingly important in order for individuals, organizations, and communities to thrive. In the VUCA world, it’s critical that we start enabling individuals with the internal tools to upshift their intrapersonal landscape so that they can better manifest the positive shifts or outcomes they’re seeking in the external world.

In parallel, my doctorate work is on exploring curiosity because it’s such a potent and robust mechanism. Existing research has demonstrated that curiosity is associated with divergent thinking and ideational fluency which is vital for sophisticated problem-solving. It’s also associated with lower stress, lower anxiety, and with better interpersonal relationships. Curiosity is also inversely correlated with aggression meaning it can be a mechanism to help us be less defensive and reactive – to stay in our prefrontal, creative part of the brain rather than the reactive, primal part of the brain which activates fight or flight tendencies. My research focuses on the first-person account of being curious and how people experience it as a means to navigate, cope and manage uncertainty, complexity, and unfamiliarity.

I am conducting a qualitative study using interviews and specific exercises with study participants. There is so much quantitative research, I wanted to go at it a bit differently. The idea is to access the unconscious experience of curiosity as it is expressed or manifested in the external world. I’m trying to get to the deeper invariant structures of curiosity because there is still no consensus among researchers about what constitutes curiosity. My intent is to help us better understand what curiosity is so in turn we can more effectively cultivate and harness it to reap the benefits documented in the curiosity research.

How did you choose this topic for your research?

As I was making my way through the required course work of my doctorate program, I was exposed to a variety of courses and research. For example, I was researching self-determination theory, interest appraisal theory, anxiety, mindfulness, positive psychology interventions, mind-body modalities and so on. It dawned on me that curiosity could be such a potent mechanism, and, for me, I found I could not be curious and anxious at the same time… although, I would later learn in my research that curiosity and anxiety co-exist. It’s that curiosity may help us to channel the anxiety more constructively.

I started thinking about how I’ve been able to overcome specific challenges. I had a challenging childhood – the statistics were against me. Why did I not only survive but also flourish? I think it was because of my desire for exploration and learning, and to have a world view and experiences that were not restricted by a generationally imposed set of limiting beliefs. In short, I’m a lifelong learner; learning has been a core catalyst for my path. And now it seems others want to learn about curiosity as well. For example, the September-October 2018 issue of the Harvard Business Review warned organizations not to underestimate the impact curiosity can have on organizational performance. Curiosity can assist leaders and their employees to adapt to volatile market conditions and external pressures by prompting them to think more deeply, rationally, and creatively, and by developing more trusting and collaborative relationships with colleagues. This line of thinking is supported, for example, by the USC Annenberg Center for Third Space Thinking which focuses on soft skills development and facilitation where I am research fellow. Intellectual curiosity is one of the core competency of the Center’s model that is empirically supported to be an essential ingredient of a leader’s soft skills repertoire. Another Los Angeles based university has recently tapped me to lead curiosity modules in their executive education programming. Merck did a study of 3,000 employees in 2016 focused on the state of curiosity across their companies in North America, Europe and China as they recognized it’s a cornerstone to innovation and to their competitive advantage. We will see more of this kind of focus on curiosity in the coming years particularly because it is so closely tied to openness to experience and creativity which are correlated to innovation. I find it fascinating that the subject of curiosity, which was considered a bit “new agey,” now is gaining interest due to the growing body of research across various different areas (e.g., leadership, organizational behavior, education, well-being, robotics) including neuroscience. The latter shows that curiosity is connected to the release of dopamine and to the anticipated reward centers of the brain which in turn encourages learning.

And so, I think we are all gravitating towards trying to find those internal competencies that can help us better navigate in the external world.

How does VUCA look like for leaders and employees?

We see an increasing rate of technological change; and, as the world is now a global marketplace, organizations need to deal with economic, political, and cultural volatility. In a recent PwC report, 74% of CEOs mention geopolitical uncertainty as a concern. Through technology, the connectedness, the world is becoming smaller.

The rate of change in one area has a domino effect on the rest of the world. It’s a tough challenge to manage change. In the US, there is a growing millennial workforce, and people are not retiring as early as previously because of the financial volatility that we experience. The volatility feeds into uncertainty, which is the inability to predict issues and events. exacerbated by the relatively unclear impact of new technologies, such as AI, will have on the workplace.

The millennial workforce has a strong sense of social justice and wants to work for organizations that are delivering value to the larger community (e.g., conscious capitalism). If the employer doesn’t meet this parameter, they get frustrated and either become disengaged or quit. So not only is turnover an issue for organizations but also low engagement numbers. Most of us are familiar with the Gallup study in which in the USA alone, disengaged employees cost between $483 billion to $605 billion annually in lost productivity. We want employees to be engaged because engaged employees tend to experience better health outcomes and higher productivity which translates into a stronger bottom line.

In parallel, a PwC study states that 49% of CEOs are most likely to change their talent strategy to focus on their leadership pipeline. They are trying to make sure that the leaders are well-trained, well-educated and adaptable to manage the VUCA environment.

I think ambiguity comes in with the kind of this haziness of reality. Within an organization alone, there are multiple stakeholders’ needs to address. Accordingly, there can be multiple possible interpretations of a condition that result, for example, from increasing M&A activity. Organizations need a curious supportive culture that embraces taking risks in the form of both successes and failures at all levels of the organization and not only equipping the top performers with tools necessary for professional success.

I think people are only just starting to embrace (not just realize) that doing the inner work has such a ripple effect. Inherently how we build an organization is fundamentally based on our interactions with other people – which means everyone should have the opportunity to focus on the inner work…there needs to be a democratization of inner work development if you will.

What are the core competencies of a leader in a VUCA environment?

I think that executives need to do the inner work to become more adaptable. The strengths that got the executives to where they are now are probably not the strengths that will allow them to achieve success in the organizational model of the future. I believe what we perceived as a strength in the past might become a weakness in the VUCA environment. By recognizing their advantages and deficiencies requires increased self-awareness, emotional intelligence, self-management, as well as encouraging their teams for continuous learning and growth. In my eyes, education is supporting transparency, exploration, risk-taking, and requires executives to actively embrace their paradoxes and contradictions of navigating VUCA instead of trying to resist them. I think that the concept of the inner work comes into play to better handle complex problems. By developing a curious mindset, leaders are equipped to anticipate and manage complicated and unforeseeable problems.

In my articles, I talk about curiosity and the relationship to disruption tolerance. Disruption is a crucial attribute describing VUCA, and another way of defining stress. We need to encourage leaders to get more comfortable pursuing uncertainty and complexity. It is essential to ask the simple and powerful question “Why are we doing it this way?” I think that we get caught in being comfortable or seeking to get back to comfort – to what we know or to conventional norms – and we don’t even take a moment to question the status quo.

I’m sure that you have been in a meeting, where someone asked: “Wait. Why are we even doing it this way?” and the answer usually is “because we always do it this way.”  Well, this kind of complacent support of the status quo is precisely the problem in a continually changing environment. Leaders and individual contributors must challenge the current understanding of a situation. I think that it is one of the tasks of the leaders and any team member is to challenge the current understanding of the situation, by adopting a 360-degrees view and suspending judgment, versus seeing situations through the lens of preconceived notions, biases, and past experiences. I’m not saying that past experiences aren’t relevant, but the research shows that emotional intelligence is a higher predictor of success in a given situation than your past experiences. By adopting a-360-degree view of the situation and suspending judgment, you will see how the pieces of information are connected – potentially in a new way than if you had used a familiar paradigm. You are more likely to find what’s missing and how to approach it in a manner that is more relevant to what is transpiring; and, therefore, more effective in advancing the ball forward so to speak.

Out of comfort, people want to find the low-risk solution that seems easy or perhaps the most obvious. By playing the short game, you will not achieve the highest potential outcome; you will have missed the avenue which could have enhanced your organization’s flexibility and potentially increase revenue because you didn’t take the time to test and iterate to see what is possible.

How do you transform the culture to strive in the VUCA world?

You can transform the culture to strive in a VUCA world, by cultivating disruption tolerance to meet volatility and uncertainty, by cultivating creativity to meet complexity, and by nurturing inquisitiveness to manage ambiguity. We haven’t talked about openness to experience yet. Openness to experience is vital because it not only concerns being open to fresh ideas but also and more specifically to other people’s ideas and experiences. Openness to experience is important because it is documented in the research as the leading predictor of creative achievement.

What do you think are the implications of VUCA for education and professional training?

The shelf life of technical or business skills is approximately five years, which implies the increasing importance of developing soft skills. Soft skills do not have a shelf life because they can evolve in sophistication as an individual evolves professionally. Curiosity can be a potent ingredient to soft skills development and longevity. For example, curiosity can help you digest or cope with experiences more productively. People who tend to be curious tend to be more autonomous or self-directed in how they reframe negative experiences. They’re less attached to the outcome because they see the outcome, whether positive or negative, as a learning experience, and so they are not as easily derailed by challenges. I agree with one of my colleague who said, “Growth is not comfortable, but there is no growth in comfort.” We must stop wanting or aiming to be comfortable (embracing only what we know) and use our curiosity to get comfortable with what we do not know so we can embrace a growth mindset, evolve, adapt, and be content. Curiosity is considered one of the 24 universal character strengths from a positive psychology point of view which means it resides within each one of us. And, it is one of five strengths most correlated with life satisfaction. This means we innately each possess the potential for happiness.

Have you seen best practice examples of organizations dealing with VUCA? 

John Deere comes to mind for repurposing their simulation software from their engineering group to forecasting software for projecting their internal supply of talent in key areas. It’s a perfect example of being curious, challenging the status quo, being creative, and of the cross-pollination effect of ideas. The same software algorithm used in their engineering work now projects the retirement and resignation patterns and shows the skill gaps up to five years in the future. Another example is Adobe who was one of the first companies to discontinue annual performance reviews in 2011/2012. They looked at their agile software processes and realized that they could do the same process for their talent development. They introduced frequent check versus the annual reviews that nobody seems to like or had minimal benefit. Johnson & Johnson created a corporate athlete program with the focus to improve executive mental and emotional health. Thanks to companies such as Google and Johnson & Johnson, mindfulness training in companies have picked up. In 2015, Aetna had about 12,000 employees go through a company sponsored mindfulness program. The company reported an average of 62 minutes per employee per week of enhanced productivity. In the same year, they reported an average annual savings per employee of $3000. Mindfulness is just the tip of the iceberg as curiosity is highly correlated with mindfulness and potentially a cornerstone or key component of mindfulness. Just think if we started implementing curiosity cultivation training programs and the exponential impact that could have on the health of an organization…

Thank you so much for your time. Thank you for all your valuable insights.

My absolute pleasure.

Many thanks to you for providing the forum so we could have such a meaningful discussion.

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