Leading Change in a VUCA World

Introduction

The events in the business environment are frequently compared to natural phenomena. Thus, similarly to cyclones and hurricanes, strong winds of change that were blowing in business turned into a real storm that was named VUCA. VUCA is an abbreviation from volatility, uncertainty, complexity, and ambiguity (Hollingworth 2016). The term itself was first mentioned in a 1998 report that was created by the United States War College for training officers for the 21st century (George 2017). It is considered that VUCA precisely represents the events in the contemporary global business. Although having a military origin, the term VUCA is relevant to the business world and society in general. Hollingworth (2016) claims that “VUCA describes the nature of the change that the world is currently facing: its parameters describe how change will affect us on a daily basis” (p. 8). The changes are already evident. The business landscape is more frequently characterised as volatile and uncertain. Moreover, it is gaining more ambiguity than before, partially due to the growing rates of technological innovation. After all, technological innovation “is leading to increased interconnectedness across the globe, which is in turn resulting in increased complexity” (Hollingworth 2016, p. 8).

In fact, VUCA is change. In the business environment, change is popular within the concepts of organizational change or change management. Diverse change initiatives have been implemented in the workplace earlier, but not all of them resulted in any meaningful change and some even failed. Consequently, the overall attitude towards change processes is frequently negative or ignorant. Nevertheless, in contemporary conditions, such attitude is no longer possible. Change is a demand of time, and people should be comfortable with it. In these conditions, VUCA can be applied to demonstrate and explain the directions of change. In fact, VUCA can help to “understand change, prepare for change, leverage change to our advantage” (Hollingworth 2016, p. 9).

As George (2017) states, VUCA “describes perfectly what is happening in the global business world today” (para. 1). It is evident that managing in a world that is volatile, uncertain, complex, and ambiguous is a complicated task. Still, the companies that want to preserve their positions in the market and demonstrate sustainable development, should adapt to new conditions and be ready for change. The major responsibility for change processes is put on the leaders of the company. Their task is to lead their organizations in changing conditions and adapt to new demands. The current report includes implications for leadership and the management of strategic change in a VUCA environment, analyses the leadership capability of Google corporation, and provides recommendations for the choice and development of VUCA leadership capabilities in Google and possible barriers on the way to their implementation.

Implications for Leadership and the Management of Strategic Change in a VUCA Environment

Business experts agree that the initial penetration of volatility, uncertainty, complexity, and ambiguity brings in challenges and alters the nature of competition in business (Bennet & Lemoine 2014). Taking into account the recent events such as Brexit, the victory of Donald Trump on president elections in the US, terrorist and cybercriminals’ hazards, environmental problems and climate change in particular, the current business environment opened for a new era that demands change in leadership principles (George 2017). In these conditions, there is a necessity for new efficient management methods to replace traditional ones and address contemporary change. George (2017) identified these processes as VUCA 2.0.

Tovar (2016) states that the VUCA concept came into the business environment as a result of the global financial crisis of 2008 and 2009. After that, its impact on leadership models in diverse companies cannot be denied. The major VUCA components in a business environment are characterised as follows. Volatility comprises an increase in such dimensions of change as type, speed, volume, and scale (Tovar 2016). Uncertainty derives from volatility and means that it is difficult to predict the events possible in the future. Complexity is another characteristic feature of the contemporary business environment and results in “widespread confusion, with no clear connection between cause and effect, affects all organisations nowadays” (Tovar 2016, para. 6). Finally, ambiguity is a consequence of diverse meanings of surrounding objects and conditions as well as the lack of precision.

Contemporary leaders have to work in the business environment with essential changes. Nevertheless, there is little opportunity to predict the future and the change in diverse economic factors. It results in problems with long-term planning and the necessity to make fast and efficient decisions (Mack et al. 2016). Moreover, contemporary leaders need to process more information than a couple of decades ago to stay competent and professional in their spheres. One of the challenges faced by society is the historical belief in the predictability of the world. However, current events introduce change and make people focus on thinking what is possible instead of what is probable as it used to be earlier (Tovar 2016).

It is evident that contemporary leaders need some preparation to be able to function efficiently and manage strategic change in a VUCA environment. A traditional way to get ready for changes used to be to “learn from the past to secure our future” (Tovar 2016, para. 10). Although this approach has been working well for centuries, it is not effective enough now. One of the points where this approach fails is the lack of opportunity to predict future that is typical of the VUCA environment. This problem gives birth to another complexity related to the change process and strategic change in particular. It is evident that prediction is an integral part of any change intervention. It is important to figure out some of the most likely outcomes and outline new possibilities that can open, but it can be difficult to fulfil in the VUCA environment. Tovar (2016) suggests four useful habits that can be helpful for contemporary leaders in the process of managing change. They are likely to assist in managing the tasks of high complexity and can be implemented by any person. Thus, these habits include asking different types of questions, taking on multiple perspectives, developing a systemic vision, and looking at the whole picture (Tovar 2016). These steps are supposed to teach leaders to manage their companies and lead them not only to survival, but to sustainable development and prosperity.

In the VUCA environment, logical thinking becomes less effective than it was before. There are diverse theories that are supposed to help one to survive, and an integrative approach to navigating VUCA is one of them (Nandram & Bindlish 2017). The authors suggest that intuition can become a tool in managing diverse change activities. Thus, instead of logics, intuition is likely to be useful in coping with volatility, uncertainty, complexity, and ambiguity. Intuition can “enhance vision development, increase understanding and clarity and lead to insights on how to simplify complexity in the context of management and entrepreneurship” (Nandram & Bindlish 2017, p. 308).

Mittelsdorf (2017) speaks of traditional change management strategies, such as gaining “buy-in” and overcoming “resistance” that can control change but are not effective in case of continuous change that is typical of the VUCA world. Moreover, it is important to concentrate not only on the change of work processes, because organizational culture also demands transformation.

To manage and lead change in the VUCA world, the following aspects should be considered. First of all, the core responsibility of top management leadership is an integral component of leading change in the VUCA environment (Succeeding in the VUCA paradigm 2016). Major leadership challenges include an inability “to anticipate and respond to changes effectively,” “to build the right guiding team for managing the change,” lack of leadership commitment and support, and denying the context of change (Succeeding in the VUCA paradigm 2016, p. 9). Building an internal capability is another aspect of change in the VUCA world. In fact, managing change is expected to become “second nature to managers” because in the VUCA environment, change is not a single event but a continuous process (Succeeding in the VUCA paradigm 2016, p. 13).

Capable internal specialists will enable a company to manage change without involving external specialists who have to be paid and need more time to learn the peculiarities of a company. Consequently, internal capability allows to respond to change quickly and govern change mechanisms in the best possible way. One more aspect significant for the VUCA world is organizational culture alignment. It is considered that cultural alignment can favour transformation attempts in the VUCA environment and, on the contrary, lack of cultural alignment can lead to failure of change interventions (Succeeding in the VUCA paradigm 2016). Finally, the use of technology should be also considered in the VUCA change process. Although technology is the last point to be mentioned, it is probably the most significant factor in the VUCA environment today. Thus, contemporary technological advancements have a strong impact on the creation of new business models and stimulating market growth. Among the diversity of ways to apply technology to the change process, are as follows. First of all, it is deployment of tailor-made trainings that are aimed to help in managing change in an organization. Secondly, this provides opportunities for remote change management which is particularly important for international companies (Succeeding in the VUCA paradigm 2016). Consequently, it is important to consider the major aspects to manage change effectively.

Leadership Capability of Google in a VUCA Environment

Leadership in the VUCA environment faces diverse challenges. However, there are companies that do not only survive in the changing world, but become a power that has a significant impact on other organizations and the business environment on the whole. Google Corporation is one such company. Its leadership approaches and innovative ideas greatly influence the business world of the 21st century.

Google is, probably, a perfect example of a company managing change and innovation in the VUCA environment. First of all, the company places a stake on its leaders. The company considers good managers to be crucial for building a productive team each member of which is satisfied with his or her position. According to Google, a good manager who can contribute to the leadership capability of the company should have the following qualities. First of all, a perfect manager is a good coach (Thompson 2015). Secondly, he or she is able to empower the whole team and not micromanage. Thirdly, a good manager “expresses interest/concern for team members’ success and personal well-being” (Thompson 2015, para. 4). Also, such qualities as productivity, a focus on results, and good communicative skills are important. Moreover, managers who want to work for Google should be able to help with career development and have a clear vision and strategy for the whole team. Finally, a good manager should have the necessary technical skills and knowledge allowing him or her to advise the team in case of necessity (Thompson 2015).

Another peculiarity of Google contributing to its leadership capability is its focus on innovation. Thus, it was named among the most innovative companies of 2017 (Why Google is one of the most innovative companies of 2017 2017). Popular products such as Search, Gmail, Maps, and other services, although being in the lead among customers, are still developing and providing versatility for users. One more important aspect stimulating leadership capability for managing in the VUCA environment is company culture. Google is famous for its exceptional company culture and is frequently evaluated as a perfect company to work for (Blackiston 2017). Employee satisfaction is an integral part of the company’s policy because they believe that satisfied workers can demonstrate “higher productivity and less turnover” (Blackiston 2017, para. 3).

Moreover, the leadership of the company is aware that revenue or a mission statement alone do not make company culture. They realise that a company’s culture is a complex concept consisting of many interrelated aspects. Thus, company culture at Google comprises the core values of the company, hiring employees based more on character than on skills, demonstrating innovative thinking and embracing transparency between employees and top management, as well as allowing some fun within a workplace, creating shared leadership, and being open to change (Blackiston 2017). All these principles have taken the company to a leading position and helped to preserve and improve its achievements. Finally, an important fact that helps Google stay competitive and successful in the changing VUCA business environment is its openness to change. For example, the introduction of the unique “20% time” policy was a risky change intervention, but resulted in ideas for new products (Frick 2014).

On the whole, in the VUCA world IT industry is observing the most substantial shift (Karanth 2016). Google, as a company involved in technology development, preserves a leading position due to constant development. Its leaders are able to see the necessity for change, understand the environment and its needs, while having the courage to face challenges and competition, as well as having enough skill to be adaptive to the changing conditions of a volatile, uncertain, complex, and ambiguous business world.

In a rapidly changing and frequently unpredictable VUCA environment, Google’s model allows for the managing of continuous innovation which is a critical component for the company’s survival and sustainable development. Analysing the leadership capability of Google, the following observations should be mentioned.

First of all, leadership is based on a new set of management principles (Steiber 2014). One of these principles that are successfully implemented by Google is the division of forces. In the case of Google, it presupposes primary division of forces behind Google’s innovative energy (Steiber 2014). In fact, Google managed to succeed in rapid growth and preserve its innovative energy at the same time. Moreover, the company’s innovative interventions were not only gradual, but were also confusing and had a significant impact on the functioning of other industries. For example, the development of AdWords greatly influenced the advertising industry; the presentation of YouTube “made over the television industry”; and the creation of Android, which was an innovation in mobile technologies, determined the development of the mobile industry (Steiber 2014, p. 40).

The major driving forces responsible for continuous innovation at Google corporation include the company culture and the individuals involved (Steiber 2014). The culture “represents the company’s common norms and values and stimulates innovation through shared expectations, through generosity and openness among colleagues, and through an effort to remove obstacles to innovation” (Steiber 2014, p. 39). The employees at Google are usually creative, smart, and ready to face innovation challenges. The combination of strong organizational culture with dedicated and motivated employees results in high performance of the company as a whole. The analysis also shows that the company relies upon individual employees not less than on leading managers.

Innovative capabilities of Google result from its well-integrated management model (Steiber 2014). One of its components is the choice of right people to work for the company who create a human capital. In this respect, it is necessary to mention the unique character of “Google leadership” (Steiber 2014, p. 62). Although company leaders are important, they do not dominate. In fact, sometimes the company makes an impression of a self-organised unit. Still, leadership is necessary to create a specific environment that would allow talented employees realise their potential. Here, it is necessary to refer to eight good habits of Google leaders that were presented earlier: being a good coach comprises giving feedback, supporting every employee, and revealing strengths of every person. This feature of a leader helps to disclose the potential of a new employee and make him or her part of a big team.

The second habit, which is empowering the team and not micromanaging, presupposes finding balance between employee freedom and support. One more important feature of a leader is being interested in the success and well-being of employees. This feature is expected to be helpful for young employees and make them feel cared for and valued not just as employees but as individuals (Steiber 2014). Productivity and focus on results is a habit of a leader that is supposed to make every employee involved in the achievement of the common goal. A good leader would distribute the tasks and make decisions to avoid possible obstacles, thus creating more favourable work conditions for employees. Being a good communicator is a necessary skill because it makes a leader capable to guide the work of a team through listening to team members and sharing information. The other two habits, such as helping employees with career development and having a clear vision and strategy for a team, are interconnected because a leader who has a definite strategy and knows how to follow it can lead team members to success through the broadening of their skills necessary for achieving goals. Finally, leadership capability demands key technical skills related to the sphere the team is working in to be an expert and be able to advise the team in case of necessity.

The analysis of Google’s peculiarities that make it competitive in the changing VUCA environment proves that the major leadership capability is its management model that supports innovation. Furthermore, the two competencies that are usually difficult to combine such as “engineering skill in computer science and scientifically based expertise regarding human capital” make the company successful (Steiber 2014, p. 37).

To conclude the analysis, it is worth to review the six management principles that make a basis for leadership capabilities at Google. The first principle is dynamic capabilities. This includes the ability of the company to “integrate, develop, and reconfigure internal and external competencies” to react to a changing environment that is an integral component of the VUCA business world (Steiber 2014, p. 78). The second principle is that of continuously changing organisation which allows the company to adjust to external changes. The third principle is a people-centric approach. This means that the company is interested in the individual and innovative potential that he or she can share. To access this innovative potential, the company provides comfortable work conditions. The fourth principle of Google is its ambidextrous organisation. This principle unites two aspects of work organisation such as daily production and innovation. This combination provides for a sustainable functioning of the company. The fifth principle is that Google is “an open organisation that networks with its surroundings” (Steiber 2014, p. 80). For Google as a company that is interested in continuous innovation, it is crucial to cooperate and exchange information with its surroundings. Finally, the sixth principle is a systems approach. It presupposes the understanding of the whole system and interconnection or mutual influence of its components.

On the whole, this management model applied by Google proves to be an effective tool for successful functioning of the company in the VUCA environment. Based on these six major principles, this allows company leaders to guide innovation. Moreover, the company is able to manage continuous innovation in a rapidly changing environment, which is one of the demands for sustainable development in the VUCA business world.

Recommendations for the Selection and Development of VUCA Leadership Capabilities in Google and Barriers to Their Implementation

In the VUCA business environment, leaders possess specific capabilities that would improve their management and contribute to the company’s performance. Although Google leadership demonstrate successful management in conditions of constant change, some of these capabilities need further development. Moreover, it is important to consider the possible barriers that can appear in the process of implementing the developed recommendations.

George (2017) speaks of the most essential leadership capabilities for managers working in conditions of the so-called VUCA 2.0. Leaders at Google possess these characteristics to some extent, but further development can lead to better results. The first capability that is crucial for a contemporary leader is vision. It is important that leaders could see “through the chaos to have a clear vision for their organizations” (George 2017, para. 9). This comprises significant aspects such as organisation as the mission, values, and strategy applicable to a company at any specific moment of its development. This capacity is closely related to one of the habits necessary for Google leaders which is having a clear vision and strategy. One of the recommendations to improve this capacity for Google is to teach its leaders to avoid the impacts of diverse external events on their defined mission and current tasks. At the same time, it is important to adapt to changing conditions, but this capacity will be discussed further.

Another capability that can be recommended for the company is understanding. George (2017) claims that “with their vision in hand, leaders need in-depth understanding of their organisation’s capabilities and strategies to take advantage of rapidly changing circumstances by playing to their strengths while minimizing their weaknesses” (para. 10). This capacity includes studying of different sources of information and opinions that can be useful for the company. The task of a leader is to understand what is more important for the company at present and spread the information to the team. This capacity is related to another skill necessary for a Google leader which is being a good communicator.

One more capacity that can be recommended for Google leadership is courage. In fact, it is already possessed by the company leaders, but the changing VUCA environment may need more courage “to step up to these challenges and make audacious decisions that embody risks and often go against the grain” (George 2017, para. 11). Real leaders cannot avoid the problems or challenges faced by the company. Their task is to guide their teams through these obstacles to achieve the desired outcome, because Google leaders are expected to be productive and result-oriented. This capacity is partially included into the company’s policy, because Google management is courageous enough to develop risky projects and hire diverse employees. Still, taking risks and making fast decisions is a demand of the VUCA environment, and thus courage should be selected as an integral leadership capability for Google.

Finally, a crucial leadership capability in the contemporary business environment is adaptability. Within the VUCA world, this capacity has become more important than ever before. Since the VUCA environment makes long-range planning not effective and risky because the conditions can change before the plan is implemented, quick adaptation to altering external circumstances is an obligatory capability of a leader. Moreover, it is important to adapt to changes and preserve the initial goals and objectives, which is a more complicated task.

Nevertheless, despite attention given by Google to leadership capabilities, there exist some barriers to their implementation. These barriers are mainly related to human resources of the company. The first barrier is lack of time for efficient coaching. Frequently, in chase for the quick result, the coaching stage can be used not at full. Still, this barrier is likely to be eliminated by Google because one of the useful habits that the company demands from its leaders is the ability to coach. Another possible obstacle preventing the Google leaders from implementing the VUCA capabilities is a lack of information. At present, information is a primary moving force in any project, and little or no information about some aspects necessary for leading and implementing capabilities can negatively influence this process. One more barrier is lack of skills. Google is known for hiring people not for their skills, but for the personality, and they are expected to learn the necessary objectives in the process of work. However, sometimes people appear to be not suitable for the leading position and the initial lack of skills becomes evident preventing them from implementing the VUCA leadership capabilities.

Still, it is possible to eliminate these barriers. One of the ways to do it is corporate learning (Shah 2015). It can teach leaders to react to nature of change, make certain decisions, navigate through complex and confusing environments, and preserve efficiency of the company despite any unpredictable conditions. On the whole, prevalence of external volatility in the contemporary business environment makes leaders shift their focus from long-term planning to immediate reactions and survival in changing conditions. Still, it is important to preserve the mission and values of the company while acting boldly and define the strengths to use them efficiently. The overall recommendations for companies that want to preserve their positions and continue their sustainable development is to implement the VUCA leadership capabilities and be open to change.

Conclusion

After all, although making business in the VUCA environment is a challenge, it is also an opportunity to pass a survival test. If a company has leaders capable of managing change and organizing the work to provide continuous innovation, it is likely to survive and even become successful. Not every company is able to adapt to the changing business world that becomes volatile, uncertain, complex, and ambiguous. Moreover, innovation and change in these conditions becomes a challenge for the majority of organisations. The history of Google Corporation is an example of successful management and benefiting from change.

Being innovative by its nature, Google fits into the changing VUCA environment. The strategies and policies of the company address the contemporary conditions. For example, it is evident that in the complex VUCA world it is difficult to predict the outcomes of this or that intervention and planning or forecasting can be less effective than it used to be. What is more, learning on past experiences becomes not informative enough to facilitate contemporary business projects. Being aware of these changes, Google does not attempt to predict the demand of population for services. In fact, it creates this demand by suggesting unique products and services that are useful for a modern person to guide him or her in the world of global information technologies. Another specific feature of Google leadership is that the company does not hire people with specific knowledge and skills for certain projects. The company hires personalities able to develop new projects and create unprecedented products and provides them with the necessary conditions and equipment. Of course, this approach would not be effective for all organisations, but it proves to be efficient in the case of Google.

In the context of change processes, it is necessary to mention the peculiarities of leadership in Google. The leaders in the company should possess some important features to follow the policies of the company and guide their teams. Also, it should be mentioned that Google leaders have necessary capabilities to manage the company in the VUCA environment. They are able to create a clear vison of their company’s goals despite the ambiguity of the business environment. Google leaders have deep understanding of the accepted strategies and capabilities of their company and can translate them to the team members. Another ability typical of Google leadership is courage because challenges of the VUCA environment and the necessity to make quick and correct decisions that frequently determine the further course of the company demand courage from the company managers. Finally, Google leaders are adaptive which is a necessary feature for leading a company and its teams through a constantly changing typically VUCA business world.

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