For more than two decades, Ronald Heifetz has been teaching and writing about leadership at Harvard Kennedy School. In a series of books, he and his colleagues separated business challenges into technical or adaptive in nature. In a VUCA world, it's critical to understand the difference between the two.
As Christ Ertel and Lisa Kay Solomon say in Moments of Impact:
Technical challenges involve applying well-hones skills to well-defined problems—such as building a bridge or organizing a production line. Technical challenges may be complex, but they can still be resolved within well understood boundaries. In these situations, more traditional, hierarchical approaches to leadership work well. If you're having heart surgery, you want the most experienced surgeon calling the shots—not a consensus building exercise.
Adaptive challenges, by contrast, are messy, open-ended, and ill defined. In many cases it's hard to say what the right question is—let alone the answer. Many of the most important strategic challenges that organizations wrestle with today are adaptive challenges.
It's nearly impossible for any one senior executive—or small leadership team— to solve adaptive challenges alone. They require observation and insight from a wide range of people who see the world and your organization's problems differently. And they require combining these divergent perspectives in a way that creates new ideas and possibilities that no individual would think up on his or her own.
Many leaders don't have enough experience creating full engagement with colleagues, asking deeper questions, connecting insight from difference sources, and doing so in real time. Analysis works well with technical challenges, but is unable to provide the coveted “silver bullet” when it comes to adaptive challenges.
The term VUCA was first used by the U.S. Army War College to describe the more volatile, uncertain, complex and ambiguous multilateral world at the end of the Cold War. VUCA is the reason why many of the challenges organizations face today are adaptive in nature.
I first came across the acronym in Bob Johansen excellent read and ahead of the times, Get There Early. In 2007 Johansen was sensing the future and talking about personal empowerment, grass roots economics, smart networking, polarizing extremes, and health insecurity in The Institute for the Future's 10-year Map. It's 2017 and these trends are still with us.
Each word as he defined it has a rich meaning:
- Volatility describes the nature and dynamics of change, and the nature and speed of change forces and change catalysts.
- Uncertainty, the lack of predictability, the prospects for surprise, and the sense of awareness and understanding of issues and events.
- Complexity is for the multiplex of forces, the confounding of issues, no cause-and-effect chain and confusion that surround an organization.
- Ambiguity is the haziness of reality, the potential for misreads, and the mixed meanings of conditions; cause-and-effect confusion.
The underlying dangers in these trends are also opportunities to share and create vision, understanding, clarity and agility. Rather than commanding and controlling our way to them, we can address them by designing a conversation of impact.
Most strategic conversations in organizations run for a day or two. But adaptive challenges can rarely be “solved” this quickly—even with intense effort. They’re too complex. In a 1994 article for Harvard Business Review titled The Fall and Rise of Strategic Planning, Henry Mintzberg says while strategic planning was well suited for technical challenges, when we're faced with adaptive challenges, we should rely on strategic thinking.
Mintzberg says, “Strategic planning isn’t strategic thinking. One is analysis, and the other is synthesis.” The process consists of gathering information from difference sources, including market data and the experience of many in the organization, then synthesizing that learning into a vision of the direction for the business.
Strategic conversations help create the sustained framework a team needs to tackle an adaptive challenge. Unlike typical meetings when organizations and teams try to do too many things that require different formats and players, strategic conversations have only one of three purposes at a time—building understanding, shaping choices, or making decisions.
Ertel and Solomon say:
To be effective, your strategic conversation must focus on one—and only one—of these goals. Once you decide which kind of session you’re organizing, the design process becomes much clearer—and your odds of success increase significantly.
If your group doesn’t know much about—or has divergent opinions on— the strategic issues on the table, you need to run a Building Understanding session. If they have tons of knowledge but are spinning their wheels, it’s time for a Shaping Choices session. Only when you’ve done both of these well can you think about organizing a Making Decisions session.
So we must begin by defining our purpose, then figuring out who has the ultimate decision rights and who is responsible for driving progress. It's also helpful to look at the past success and learn from what worked to spark insight and alignment, both useful sources of input for a new session.
We should plan to start with a clear and relevant question, establish boundary conditions—for example, no pet peeves—help people understand that the goal is to create alignment and generate new insights rather than make a decision, then pick the purpose.
It's important to note that with strategic conversations we go slow to go fast, so managing expectations of how much we'll accomplish at any one time, resisting attempts to rush downstream, and celebrating the “aha” moments are important stepping stones.
Writer John le Carré once wrote, “A desk is a dangerous place from which to view the world.” Getting out of the office is a good idea to gain perspective and to scan the periphery—Clayton Christensen says important changes usually appear first at the fringes of markets and organizations. Using simulations, scenarios plannings, and creating opportunities to test-drive options help see how choices may look in the future.
Ertel and Solomon recommend a few books for those who want to learn more about defining purpose and leadership:
Switch: How to Change Things When Change Is Hard by Dan Heath and Chip Heath.
The Heath brothers combine in-depth research with engaging stories to illuminate key principles for making change happen in any context. See my take two.
“In our research, we studied people trying to make difficult changes: People fighting to lose weight and keep it off. Managers trying to overhaul an entrenched bureaucracy. Activists combating seemingly intractable problems such as child malnutrition. They succeeded—and, to our surprise, we found striking similarities in the strategies they used. They seemed to share a similar game plan. We wanted, in Switch, to make that game plan available to everyone, in hopes that we could show people how to make the hard changes in life a little bit easier.”
Leadership on the Line: Staying Alive Through the Dangers of Leading by Ronald Heifetz and Martin Lisnky.
An excellent guide to how effective leaders work through adaptive challenges, ripe with implications for strategic conversations. Effective leadership comes from doing more than the technical work of routine management; it involves adaptive work on the part of the leader, and a willingness to confront and disturb people, promote their resourcefulness, and engage their ability to adjust to new realities. But adaptive change always encounters resistance. Heifetz and Linsky examine four forms of resistance—marginalization, diversion, attack, and seduction—before presenting a number of practical resistance-response skills to nurture and employ.
Leading Change by John Kotter.
The classic step-by-step primer on how to manage an organizational change process. With the caveat that it is a classic and thus is about big project thinking. Kotter puts enormous focus on 'leadership' rather than building an environment in which all people flourish. Change is described as “top-down” rather than grass-roots stressing traditional management roles. More about BIG change efforts over many small ones (as in Kaizen).
Playing to Win: How Strategy Really Works by A.G. Lafley and Roger L. Martin.
An indispensable guide for how to think about shaping and evaluating strategic options.
“Every industry has tools and practices that become widespread and generic. Some organizations define strategy as benchmarking against competition and then doing the same set of activities but more effectively. Sameness isn’t strategy. It is a recipe for mediocrity.”
“The Fall and Rise of Strategic Planning” by Henry Mintzberg, Harvard Business Review, January–February 1994, 107–14.
This classic piece makes the case for the emergent approach to developing strategy—and explains why strategic planning doesn’t work for really big issues.
“Real strategic change requires inventing new categories, not rearranging old ones.”
Getting to Plan B: Breaking Through to a Better Business Model by John Mullins and Randy Komisar.
Venture capitalists know that entrepreneurs’ Plan A strategies almost never work. This book is about how to pivot and find your Plan B. The authors provide a rigorous process for stress testing your Plan A and determining how to alter it so your business makes money, solves customers' needs, and endures. The important element is the discovering process of your business, of your customers in an iterative and flexible manner.
Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers by Alexander Osterwalder and Yves Pigneur.
Nothing beats the BMG Canvas for working through new business model options. With the caveat that this is just a primer with breadth and less depth for anyone who has advanced knowledge.
The Paradox of Choice: Why More Is Less by Barry Schwartz.
People usually say they want more choices, but their behavior reveals that they want fewer. This work is loaded with lessons from social science research on how to think about shaping choices and offers concrete steps on how to reduce stress in decision making.
“The fact that some choice is good doesn't necessarily mean that more choice is better. As I will demonstrate, there is a cost to having an overload of choice. As a culture, we are enamored of freedom, self-determination, and variety, and we are reluctant to give up any of our options. But clinging tenaciously to all the choices available to us contributes to bad decisions, to anxiety, stress, and dissatisfaction—even to clinical depression.”
Seven Strategy Questions: A Simple Approach for Better Execution by Robert Simons.
In this concise guide, Simons presents the seven key questions you and your team must regularly explore together:
- Who is your primary customer? Have you organized your company to deliver maximum value to that customer?
- How do your core values prioritize shareholders, employees, and customers? Is everyone in your company committed to those values?
- What critical performance variables are you tracking? How are you creating accountability for performance on those variables?
- What strategic boundaries have you set? Does everyone know what actions are off-limits?
- How are you generating creative tension? Is that tension catalyzing innovation across units?
- How committed are your employees to helping each other? Are they sharing responsibility for your company’s success?
- What strategic uncertainties keep you awake at night? How are you riveting everyone's attention on those uncertainties?
Moments of Impact is a practical tool to understand the importance of strategic conversation and to learn how to structure them to help with your organization's challenges.