WhitepaperLeading People in Times of Change: Teams

Eric Miller,

Senior Partner

Today’s business environment can best be characterised as “VUCA” - Volatile, Uncertain,

Complex, and Ambiguous. The term was originated by the US Army War College to describe

the new challenges facing leaders.

These terms accurately describe the experience for many leaders and teams. Consider:

A BCG study found that half of the most turbulent financial quarters from 1982-2012 have

occurred in the final 10 years. The study also concluded that financial turbulence has

increased in intensity and persists 400% longer than in the past. (Volatility)

Executives facing great uncertainty must decide whether to bet big, hedge, or wait and

see. These decisions require estimating both opportunity and risk. Underestimating

uncertainty can lead to strategies that neither defend against the threats nor take

advantage of the opportunities. One colossal underestimation of uncertainty took place in

1977. Kenneth H. Olsen, then president of Digital Equipment Corporation, announced that

“there is no reason for any individual to have a computer in their home.” The explosion in

the personal computer market was not inevitable in 1977, but it was certainly within the

range of possibilities that industry experts were discussing at the time. (Uncertainty)

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Complex systems have always existed, of course—and business life has always featured

the unpredictable, the surprising, and the unexpected. But complexity has gone from

something found mainly in large systems, such as cities, to something that affects almost

everything we touch: the products we design, the jobs we do every day, and the

organizations we oversee. Most of this increase has resulted from the information

technology revolution of the past few decades. Systems that used to be separate are now

interconnected and interdependent, which means that they are, by definition, more

complex. (Complexity)

Colonel Eric Kail defines

ambiguity as the “inability to

accurately conceptualize

threats and opportunities

before they become lethal.”

(Kail, 2010 December 3). While our

business experience is seldom

‘lethal’ we deal with high

stakes including careers and

family security. When making

decisions, people avoid

choices for which they're

missing information. This

sound's reasonable enough. After all, why would you choose something if you're not sure

about it? The problem is that people can be perfectionists when it comes to information

for decisions. Experiments have shown that missing information causes people to make

irrational choices. This is known as the Ambiguity Effect: “a bias for perfect information in

decision making”. In other words, people prefer making a bad decision where all

information is known to making a good decision that involves missing information.

(Ambiguity)

By all accounts, the chaotic “new normal” in business is real. The GFC, for example, rendered

many business models obsolete, as organizations around the world were plunged into

chaotic environments similar to those faced by the military. At the same time, technological

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developments like social media exploded, the world’s population continued to

simultaneously grow and age, and global disasters disrupted lives, economies, and

businesses.

Surviving Thriving in VUCA…starts with the Lead Team

The VUCA world requires environments that enable individuals, and teams to not just

survive, but thrive. We believe creating such environments is the primary function for

leaders – and that Leadership Teams are the best place to start.

Strong evidence suggests that differentiated, sustainable results are only possible when the

Leadership Team is high performing.

There are four key factors needed for leadership teams to thrive in the VUCA environment:

Alignment, Engagement, Empowerment, and Execution.

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Where is the organisation heading?

Why is it heading in that particular direction?

What is stopping it from moving to the destination?

What specifically will the team do to achieve its goals?

Alignment – “North”

Struggle: Organisations are challenged to keep up with the ever-increasing pace of change.

This requires a level of alignment that many lead teams fail to achieve. Many teams are

comprised of leaders who hold primary allegiance to their function…not the enterprise.

These groups don’t see themselves as teams. Lack of alignment at the top leads to silo

behaviour and confusion within the organisation. Sub-teams and individuals don’t know

what’s most important for the enterprise to succeed. As a result, they look after only the

interests of their ‘piece’. Without proactive collaboration across functions, the organisation

is not nimble enough to keep up with the pace of change.

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Story: Lighthouse sat in on a new client’s leadership team meeting. We quickly noticed that

after each leader gave ‘their update’ their attention quickly turned to their smartphone –

not engaging in any sort of collaborative dialogue. Given this lack of attention at the

leadership table, we were not surprised to learn in focus groups that the middle managers

in the organisation often were unaware of, or even unconsciously working against, the

priorities of their colleagues across the business.

Solution: The lead team explored their various stakeholders and how the team needed to

deliver against these stakeholder’s expectations. They developed a shared vision & purpose

for the leadership team as the primary team to which they gave allegiance (not functional

teams). Developing habits around this aligned behaviour took time and courageous

conversations as the team began to hold itself accountable to new expectations and

behaviours of collaboration and teamwork.

Engagement – “East”

Struggle: Dealing with ambiguity requires individuals throughout the organisation to ‘step

up’ and make well-informed, cross-functional decisions based on an understanding of

hypothetical outcomes. It follows that most leadership teams want their extended teams to

demonstrate behaviours like ownership, accountability, collaboration, and innovation. Too

often these expectations are undermined by the leadership team’s own behaviours. The

leadership team - individually or collectively – fail to walk their talk and cannot credibly

engage the broader team into the constantly-changing tactics needed to execute the

strategy.

Story: An international construction company with a dispersed Australian workforce

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wanted to build a culture of ‘Accountability and Ownership’. The leadership team was

struggling to demonstrate these values themselves so each level in the organisation ended

up pointing to ‘the others’ as the source of the problems (the opposite of ownership and

accountability!). Middle managers “looked up” to senior executives and complained about

the lack of strategy while senior leaders “looked down” and wondered why no one would

take accountability for decisions.

Solution: The CEO invested time and resources to flesh out the Leadership Team’s own

aspirational values – which included ownership and accountability. They confronted the

fact that they needed to demonstrate these behaviours and that they needed to encourage

the rest of the organisation to do likewise. They decided to share more stories that spoke to

these values. For example, the story of an operations person who performed outside the

scope of his role to deliver for the customer. They also decided to recognise these

behaviours with formal culture awards to give people concrete examples of what the

desired behaviours look like. Finally, the team found ways to hold one another accountable

for these behaviours.

Empowerment – “South”

Struggle: Uncertainty requires businesses to anticipate changes and have strategies in

place for multiple alternate scenarios. Scenario building requires the leadership team to

sponsor multiple, concurrent experiments and continually gather external data. Because

resources are always finite, this process requires the team to have robust debates where all

voices are heard. Most teams fail to have constructive conflict and genuine debate because

individual team members do not trust one another. This lack of trust shows up in several

dysfunctional ways. One common manifestation is that team members agree to “take this

issue offline” and never resolve the actual issue nor the underlying issues

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Focus on

achieving a

group

goal

Hold one another Accountable

Commit to decisions

Work through conflict

Trust one another

Story: A successful Australian Pharma company was suffering from unresolved friction and

underperformance in their ELT. Much of this situation centred on three leaders: Head of

Sales, Medical Compliance Lead, and Head of Marketing. These three did not trust one

another and therefore came at every situation from a ‘protect my turf and position’ mind-

set. The Head of Sales felt like his agenda was most important and that Medical Compliance

Lead was constantly ‘in the way’ and should be worked around. Meanwhile the Head of

Marketing was frustrated that the Sales team were ignoring detailed market research and

recommendations. The Medical Compliance lead and his team needed to be more and

more challenging in their conversations in order to avoid being perceived as a group that

could be ‘run over’ or ignored. This dynamic stared among the three leads but could be

seen between the three extended teams as well. The dynamic made succeeding in a

dynamic external environment extremely difficult.

Solution: The Managing Director and HR Director invested in a Lighthouse Leadership Team

Navigation program which helped these individuals and their teams “get out of the South”.

Moving individuals and groups out of the South requires “pull” from each of the other

directions. Lighthouse helped this team by re-clarifying the team’s purpose and direction

(North), re-setting the team’s aspiration to be “one team that collaborates” (East), and

committing to three shared goals that required every team member’s contribution (West).

These team processes effectively surfaced the underlying conflicts and enrolled the three

executives into building solutions together.

Execution – “West”

Struggle: Organisations often use Complicated solutions (building a series of detailed plans

whose success relies on predictable outcomes that come from well-tested methods) to treat

Complex issues (which require constant ‘test and learn’ experimentation all aimed at

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achieving the overall, long-term goal). In such environments Leadership Teams often have

too many priorities which are individually not connected to the overall Strategy. These

teams are short-term oriented and, while they get a lot of tasks done, don’t ever move the

needle on the longer-term strategy.

Story: A new Australian Managing Director of a large multinational was struggling to achieve

his Revenue and Profit goals. He inherited a Leadership Team comprised of various

functional leads – each of whom had myriad of process-based KPIs to demonstrate the

success of that function. Every leader was functionally-focused and “way too busy” to

invest the time required to collaborate on the overall challenges. The team was busy being

busy.

Solution: The MD enrolled his team in a Lighthouse-led process which identified the Wildly

Important Goal (the end of year revenue target) and the associated 3 Critical “West” sub-

goals for each function (value of sales opportunities to move to ‘Qualified’ each quarter,

number of new product launches, and reduction in customer-complaint tickets). This

process places a disproportionate amount of focus on measuring accomplishment of the

activities designed to move the needle on the sub-goals. Each week Lighthouse helped the

sub-teams stay on track – resisting their natural urge to move back into old habits. The

team achieved their Annual Budget and attribute this success to the focus of this “West”

process. The MD and his functional leaders eventually built the new habits needed to

sustain their own success. They now re-set their West Goals and Priorities every six months.

Lighthouse calls this process Leadership Team Navigation which is backed by the

internationally-proven NEWS framework. Lighthouse exclusively licenses NEWS here in ANZ

and use it to help leaders unlock the Agility and Collaboration needed to achieve their

strategic goals. Want to know how Team Navigation can help your team? Click HERE to

take the Lighthouse Lead Team Assessment and schedule your FREE consultation..

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