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It was back in 1992 when Herbert F. Barber came up with the term VUCA – Volatility, Uncertainty, Complexity and Ambiguity – but it also happens to be a near-perfect description of how things are right now. Although initially introduced by Barber as a concept for strategic company management, VUCA also reflects the problems currently facing managers – including outside of their respective organisations. Today, it describes the influences that global dependencies, political controversies, technologisation and changing consumer behaviour are having on companies and entire sections of society – and therefore keeping 21st-century managers on their toes.
However, hardly any of these influences has brought about such far-reaching changes as the COVID-19 pandemic, which has been hanging over us since March 2020. It has led to events that many people had previously thought impossible: e-commerce penetration in the US grew from 16% to approximately 34% within the space of three months (by way of comparison, it took about ten years to increase from 5% to 16%); internal projects for which a timescale of around three years had initially been planned were launched over a single weekend; and entire industries were turned on their heads – restaurants, healthcare and traditional retail being cases in point. The coronavirus has led to longstanding certainties losing their currency and being replaced by a new normality – meaning that VUCA has taken on a whole new importance.

Digitalisation: the constant factor in the new normal

In the ensuing uncertainty, digitalisation is now a central instrument on the agenda of all company bosses as it allows them to respond more flexibly to these volatile influences and to introduce countermeasures. Although it had already been quite a challenge for many companies to take their company processes to the next (digital) level, the advent of the coronavirus now means that this has become a survival factor that will determine each company’s future. Whether it’s a question of expanding the online area to include offline sales, implementing projects entirely by digital means or managing teams via digital channels – digital services and platforms facilitate these initiatives in only a fraction of the originally intended time and are therefore a central component of company management. And one that is here to stay.

The challenges for managers involve overcoming the physical distance to individual colleagues brought about by the need to work from home and, in spite of largely decentralised teams, to create digital interactions with a view to implementing project processes and encouraging team spirit. As a result, the pandemic has increased the urgency of implementing digital solutions as this is the only way to counter the crisis adequately and to respond more swiftly to the impact that it is having. So it’s no wonder, then, that – according to a DMEXCO trend study – approximately 70% of managers based in the DACH region indicated that the pandemic will speed up their planned digital transformation projects to enable them to meet the new requirements.

Adaptability will determine future company success

Managers are currently being given a crash course not only in digitalisation, but also in change management and New Work. Here, one of the main critical success factors will be how individual managers practise ‘remote leadership’ in companies – this is because the agility and flexibility of the predominantly cross-functional and decentralised team members must be ensured continually. One fundamental aspect for companies is therefore how skilfully and quickly they can respond to crises and changes in their organisational environment and adapt their organisation accordingly.

VUCA 2.0 – an antidote for the current state of uncertainty

Driven by external influences, managers feel forced to explore new avenues and acquire new skills so they are in a position to face up to increasingly pressing questions. This is why it is necessary to have a clear understanding of the organisation’s common orientation and to be able to convey this successfully within the company and tackle the challenge together.

This is done by communicating a Vision, by Understanding the context, by presenting these with Clarity and implementing them with the necessary Agility – or, in short, with VUCA 2.0. This can be seen as the antidote to the VUCA term introduced by Herbert F. Barber. VUCA 2.0 gives managers guidelines that they need to apply in their operational management functions in order to keep on top of current and future challenges:

V ision:

More than ever before, managers need to be able to provide continual orientation in the context of changes and to put forward a vision that the organisation can gear itself towards. This not only requires the definition of a ‘guiding star’ but also the necessary degree of transparency that will allow each and every employee to devote themselves to the mission at hand. At the same time, it is important to create a common understanding of values and the organisation’s strategy so that managers are in a position to make relevant company decisions, thereby enabling their teams to take the same route.

U nderstanding:

As well as defining a common vision, a far-reaching understanding of structures and processes is important in order to be able to apply skills that exist within the company quickly and effectively. At the same time, an in-depth understanding of the company context must exist – this is necessary for adapting flexibly to dynamic requirements from customers, competitors and changes in the political climate. To this end, transparent communication and networking need to be established throughout the company so that any volatile influences can be nipped in the bud. Only in this way is it possible to respond flexibly to external changes, to minimise risks and encourage resilience.

C larity:

One way to deal with the complex internal and external organisational environment is with focused and clearly formulated company management. This will bring clarity to the existing fog of chaos, enabling effective countermeasures to be defined and implemented. As a result, processes can be structured more clearly, communication channels used more efficiently and company decisions conveyed quickly and resolutely so that, in spite of the existing complexity, they can be communicated transparently to employees and continually made visible.

A gility:

In order to remain viable for the future, companies need to be agile enough to adapt to external requirements and flexible enough to respond to a changing environment. This means that agility not only needs to be reflected in the company structures and processes – at the same time, it constitutes a leadership quality that is evident when managers demonstrate an agile mindset. This is why initiating a cultural shift and establishing flexible processes and cross-functional cooperation models is a central function for managers today. To do so, they must be able to communicate openly within the organisation and find suitable solutions for external changes quickly – without losing sight of the aforementioned ‘guiding star’.

Digitalisation is central to the success of VUCA 2.0

VUCA 2.0 offers managers an approach that can guide them in times of mounting uncertainty. However, this also means that suitable technologies need to be used, digital platforms set up and internal knowledge transfer geared in such a way that relevant information, data and transparency can be exchanged quickly and flexibly with regard to the changing situations. To this end, organisations should do away with siloed thinking, encourage integration and collaboration between different areas and establish mechanisms that motivate self-reflection. In addition, companies have to create an environment for ongoing learning and a values-based culture in order to provide employees with the tools they will need to deal with sudden, unforeseen events. This empowers individual teams and employees – through personal responsibility and reflection – to counter the combination of volatility, uncertainty, complexity and ambiguity that is set to be the norm for the foreseeable future. Such an approach ultimately enables employees and managers alike to make use of the necessary information strategically and in the interests of the company – all with a view to optimising resource distribution and avoiding inefficiency.

VUCA 2.0 as a core skill of today’s organisations

Implementing the guidelines of VUCA 2.0 is ultimately a critical factor for managers when it comes to withstanding the challenges posed by the VUCA influences today and in the future – and emerging stronger than ever. By defining a vision, understanding their own organisation and ensuring clarity in their communication and agility in their actions, it is possible to take the edge off uncertainty and, in turn, to follow a common vision together. Changing management and employee conduct in line with VUCA 2.0 will well and truly bear fruit once it has been aligned with the right tools, platforms and technologies. However, intended change only occurs when its wheels are set in motion – and what better time for change than right now?

This article first appeared in TWELVE, the Serviceplan Group’s magazine for brands, media and communication. In the seventh issue, you will find further inspiring articles, essays and interviews by and with prominent guest authors and renowned experts centred around the magazine’s theme “Rethink!”. The e-paper is available here.

Agiles Arbeiten

“Being able to adapt quickly, flexibly, and proactively to new situations” – the significance of agility is not disputed. But how to achieve an agile digital agency definitely is. In the middle of the transformation of hmmh, we take a break and look back: what are the most valuable experiences from our change process with 300 employees up to this point and what questions should agencies ask when they move in the direction of agility?

Independent of industry, many employees today expect being able to realize themselves in the company and being able to show off their skills in interdisciplinary and exciting projects. Questions like “Why do we go to work in the morning” and “What is our mission?” demand clear answers. The objectives of companies are also clearly defined: finding creative solutions for the ever-changing needs of customers quickly, to keep up, and thus growing the company’s success and consequently their own. Achieving this while staying competitive requires more autonomous working methods and an agile structure. In addition to the will to change something, one must also raise internal awareness for the subject in order to be able to get all employees on board. And it requires a company structure with as few hierarchies as possible. However, the whole thing will only work within predefined boundaries for the entire team which leave enough room for creativity and autonomy for each individual and provide mutual trust. Once the change has been decided and the general direction laid out, the right strategy for the agile transformation must be found.

1. What is the right strategy for the transformation?

First of all: There is no “one right” strategy. Depending on industry, business size, and the willingness of the team, we decide whether the culture and structure should change gradually or in a short time. For companies with different service areas, only partially agile customers, and employees who are not yet completely convinced we recommend putting together a small group of promotors. As representatives of the different departments, they collect requirements, wishes, and concerns of the entire company, take care of the framework conditions, and accompany the process. The more varied the opinions, the better. Routines are deconstructed and then new paths found together. In 2015, after interviews and open spaces and after finding a strategy task force consisting of elected representatives for each area who accompanied the process, at hmmh this meant saying goodbye to functional pillar structures and “departments”. As the word already indicates, it is derived from parts (“de-part-ment”), the exact opposite of the objective. In this phase, hmmh formed agile customer teams in order to be able to address customer wishes faster and more flexible.

2. Creating initiative – How does one do that?

The developer, creative conceptioner, consultant, graphic designer, copywriter, HR, or management: each person in the company has different responsibilities and roles which require different skills. Breaking up all structures and redistributing responsibilities requires large-scale T-shaping in the company. This means that for instance developers also need to take on leadership roles for customer projects and internal tasks: either as member of a temporary SIG (Special Interest Group) created for a specific question or of a COP (Community of Practice) which tackles specialized topics across the company. Most of all, one must get adapted to the new spirit in order to focus on the positive aspects of an autonomous working method. Transparency and the involvement of each employee is the main point here in order to achieve the needed acceptance. This also includes education concerning the new possibilities and duties that come with such a change. The management must lead by example, delegate responsibility, and trust in its team and give them space to work. However, this also means that the management should initiate this process, guide it positively, and sometimes provide additional impetus. Courage to change serves as a role model and is contagious. The main foundation and guarantee for a successful transformation is a team that knows the objective.

3. Do the internal systems still fit the structure?

While the type of organization, the thinking, and working methods change it is important to check the internal systems for their fitness. How agile are the tools and programs which are a part of everyday work? Be it for internal information exchange, scheduling, or budgeting. The tools have to fit the organizational structure and permit agile work. No matter whether you use Confluence, Rocket Chat, or Bit Bucket – the decision for or against a tool should be based on the opinions of the internal experts and a reconciliation of all important requirements. One must also consider that compatibility with customers is also important. Tools may vary, but the focus should not: one must always ensure that the customer gets the best solution, the best service, or both. This means that agile work requires the transparent use of software, tools, and systems. Internal working methods can and must be adjusted: whether open spaces, lean coffees, or Kanban boards, the implementation must fit the structure. This also applies to the management.

4. How can you convince less agile customers?

At the moment, digital agencies usually are a lot more agile than its customers. This poses a great challenge in working together, since rigid structures and routines are often firmly anchored in the customer’s procedures. These customers want security and a perfect solution at a fixed price. When dealing with less agile customers it is important to let them know that they not only receive a tailor-made result but also tailor-made service which adapts to all their requirements in order to achieve the best possible result without compromises. Ideally, the price moves within a target range. Transparent processes, a sometimes cheaper but always better solution, and measurably better productivity as well as enjoying your work often also makes customers think twice. Agility is contagious.

5. When is the agile process completed?

Once the strategy and the roles have been found, the first agile projects implemented successfully, and new agile projects are added continually, then the acceptance of those who were not quite convinced of the model also increases. Employees who are unhappy with the new environment will leave, but make room for new ones. This is normal. It is important to reflect, verify, and adjust – as part of everyday work – internally and externally. This path is a permanent process that is never completed. And that is a good thing, since stagnation is boring.

Conclusion

Agile working is not just a method that makes businesses more efficient and flexible in order to achieve better results. Agility is a business philosophy. It requires clear and transparent communication, both with colleagues and with customers. It requires a great deal of initiative, mutual trust, and space for development. A complex process that not only need to be initiated well, but also continually supported, reflected, and adjusted. It is essential to find the right strategy for the respective business, give employees space to develop their own responsibility, adjust internal processes and roles, and get customers excited about the method. Only then can the entire company react flexibly to new challenges. There is no path to becoming an agile business without a change in culture. This piece of wisdom is well-established: “Structure follows strategy but culture eats strategy for breakfast”.

How agile a business really is does not depend on the management but every team member. Agility is not an end in itself and also no cure-all. But it is necessary today and even more in the future in order to be able to act successfully in the market in disruptive times.