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Making sense of uncertain situations

Posted on by from Henley Business School

With situations such as Brexit upon us, how does HR tackle these VUCA times?

Quietly waiting in a client's reception area, I really should have been rehearsing the main- board presentation I was delivering ten minutes later.  And yet, like a moth to a flame, I was drawn to the huge plasma screen showing coverage of Brexit, and the appointment of the UK's new EU ambassador. I'm no fan of rubber neckers, slowing and staring at a road accident, but even I can't resist a sneaky glance.  I feel like that about Brexit.  Being glued to the daily updates seems like watching a car crash, and yet I can't help myself.

But what am I going to do, with what I see and hear? Without any facts, none of us can easily make firm decisions. We run the risk of making things much too simple or far too complicated. The simple version is where foolish or naïve leaders tell their teams it's too early to say what will happen - or that (worse) “we just won't be affected by Brexit”. And then there’s the complicated - I’m hearing stories of hastily-arranged strategic pow-wows, and people scurrying to sessions on scenario planning. There are two problems with that. First, even the scenarios are unclear; and second I’ve only met a handful of people who’ve mastered crystal-ball gazing.

Many directors of average companies are still wrestling with making their current strategy part of daily life, let alone planning ahead for possibilities and even probabilities. Anticipating the effects of the four red Brexit threads (labour movement, trade policy, EU Budget and the legislative framework) may create a long and complicated list of what-ifs, that average Joes can't hope to fully understand.

Managing through change

So how do we make at least some sense of this situation? And, for that matter, how do we deal with any kind of VUCA (volatility, uncertainty, complexity and ambiguity)? That’s where HR plays its part:

1.    HR needs to provoke, and be brave enough to join, discussions about the #value chain – as your company identifies where #value is created in areas like production, marketing and service, or across primary and support activities (try Googling "Porter's value chain"). Crucially, help analyse the links and interdependencies between each of the #value activities identified (that’s where Brexit is likely to have most effect). Brexit may change how that #value is delivered, but at least you'll have a firm understanding of what you have now…

2.    HR’s role then becomes identifying the crucial capabilities that create your organisation's #value. Zoom out from generic competencies (like organisational agility) and zoom in to specific capabilities. What does your organisation uniquely do? Understand the fundamental force that drives the business. Pay more attention to how HR can own and deliver those capabilities (that's something we covered in our recent "Future Models of HR" research).

3.    For VUCA situations generally, focus on developing a culture that supports new ideas or ways around problems. And train and coach senior leaders to hone their communication skills. For example, I can't find anyone worldly and educated who disputes the view that the “new normal” is abnormal. But leaders can't leave their people with their head in the clouds or engulfed by the fog. They need to give their people some kind of certainty – sharing what they know, what they don’t (yet), and what will undoubtedly be important in the future (like keeping customers close and ensuring tight control of costs). Even if leaders don’t have all the answers, at least they can inspire belief that the future is in safe hands.

So that’s three ways to make sense of Brexit, and indeed any VUCA situation. Sounds better than staring at the screen or scratching your head!  And maybe tomorrow we can work on the rest that’s needed in VUCA – more collaboration, leading without authority, strategy execution, building power networks….

Mark Swain

By Mark Swain

Mark is director of The Henley Centre for HR Excellence, and The Henley Partnership, at Henley Business School.

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