Leaders cannot anticipate every specific situation—not when the world is volatile, uncertain, complex, and ambiguous (VUCA). Knowing how to lead in a VUCA environment doesn’t mean making infinite contingency plans. Instead, it means having flexibility, solving problems, driving change, and handling the unknown. Strategic leadership in the face of VUCA means being versatile when your plan doesn’t go as planned.
Given the way that the 2020s have been going so far, the near future seems likely to continue to present VUCA challenges. The COVID-19 pandemic, Great Resignation, Russo-Ukrainian War, economic recession, and more have brought extraordinary hardship to boardrooms and living rooms. Organizations need people who are comfortable leading during crises and confident forming strategies when all the facts cannot be known.
Read on to find out why understanding VUCA is so important and how personality data can predict leaders who are more likely to respond successfully to VUCA situations.
What VUCA Is and Why It Matters
VUCA isn’t just a catchall phrase for challenging environments. Understanding its nuances enables leaders to be versatile.
What Is VUCA?
The acronym VUCA originates from the US Army War College as a description of the state of the world since the late 1980s. Here’s what the terms that comprise it mean and how they apply to leaders1:
Volatility – A volatile world is characterized by sudden changes that require rapid response. A leader with flexibility can deploy well-honed skills quickly and change direction as appropriate.
Uncertainty – An uncertain world is characterized by the inability to know exactly what is happening now or what may happen next. A leader who anticipates problems can forecast potential flaws in solutions, detect errors, and experiment.
Complexity – A complex world is characterized by distinct but interconnected variables that influence decision-making. A leader who drives change can assess a broad range of response options and champion new methods, systems, or processes to improve performance.
Ambiguity – An ambiguous world is characterized by circumstances with multiple meanings that require unbiased objectivity to assess. A leader who can deal with ambiguity shows self-awareness and comfortably handles unpredictable or unknowable situations.
Another way to express the characteristics of VUCA is by how much information can be known and the degree to which the results from our actions can be predicted.2 In complex or ambiguous situations, leaders tend to have less information available. In volatile or uncertain situations, they tend to have more. Usually, leaders can make accurate predictions in volatile or complex situations, while it’s often harder to forecast the effects of one’s actions in uncertain or ambiguous situations.
Why Does VUCA Matter?
Handling VUCA crises is just another part of leading an organization effectively. Analyzing which specific VUCA conditions a crisis brings will help leaders understand what responses are most fitting and how to implement them.
Every organization will face a crisis at some point, but it’s nearly impossible to know what the crisis will be. That is why a broad, principled approach to a VUCA world tends to be more successful than outlining specific details for every individual contingency. Cybersecurity threats and tsunamis are significantly different crises, but responses to both share the basic need to safeguard and secure people, property, and data.
Because crises are so common, responding well to VUCA challenges is a crucial capability for leaders today. A significant indicator of effective leadership is versatility, which is defined as “the ability to read and respond to change with a wide repertoire of complementary perspectives, skills, and behaviors.”3 Organizations need versatile leaders to overcome crises.
VUCA and Leader Personality
Hogan assessments measure personality characteristics that correspond to competencies that show a leader’s likelihood to respond to a VUCA world with versatility. Those competencies include dealing with ambiguity, anticipating problems, flexibility, and driving change.
Our research on the Hogan Personality Inventory (HPI) suggests that higher scores on the Adjustment, Ambition, and Interpersonal Sensitivity scales predict a versatile leader. A leader who scores this way is likely to be resilient when faced with challenges and remain calm under pressure, while driving the team toward results and creating an environment that fosters connection and trust.
Our research also indicates that lower scores on the Hogan Development Survey (HDS) scales Excitable, Skeptical, and Reserved predict a versatile leader. These leaders tend to be prepared for setbacks and react calmly when they need to work through problems. They are likely to create an environment of collaboration and remain tolerant, open-minded, and optimistic, while also being perceptive of others and the situations around them.
Finally, lower scores on the Security scale from the Motives, Values, Preferences Inventory (MVPI) predict a versatile leader who is likely tolerant of ambiguity and uncertainty while maintaining a reputation for being an assertive and innovative leader.
Implications
The legacy of a leader is often determined by how they handle a crisis. In recent years, the business world has seen its fair share of crises. While some leaders have faltered, others have risen to the occasion.
Versatility seems like a core characteristic related to performance in VUCA circumstances. Versatile leaders can deal with ambiguity, anticipate problems, be flexible, and continue to drive change. Hogan’s research shows several core scales across assessment tools that seem to be key predictors of versatility. These scales predict a leader that should be unflappable under pressure, driven to succeed, open to new opportunities, perceptive, and collaborative. These leaders are not likely to overreact or quit in the face of challenge; rather, they will engage in versatile leadership by evaluating the current situation and responding with diverse perspectives and talents to overcome challenges.
VUCA responsiveness is an important component of strategic self-awareness in leadership development. Not every leader is naturally skilled in the face of uncertainty. Hogan provides leaders an opportunity to understand their personalities. Leaders who are self-aware in this way can learn to strategically leverage positive behavioral tendencies and mitigate those that may get in the way of success during a crisis.
A version of this article appeared on hoganassessments.com, posted on May 16, 2023
EXPERD, Human Resources Consultant, Jakarta – Indonesia