Much is talked about the complexity of the global business environment. To understand the true nature of the current operational environment, a wider perspective is required. A number of factors have emerged and combined to provide key strategic “thematic themes” that will resonate over the coming decades. Businesses must understand these key themes and appreciate the challenges that they will face.
Understanding complexity and volatility
Many business practitioners have found the increased complexity combined with the volatility of the global environment challenging. Key to understanding the nature of these factors, the complexity is when a situation is presented that has a number of variables that cannot be easily resolved within the individuals cognitive experience or capability. This situation can then become volatile when another factor (such as time) is introduced, which creates a situation where the individual is overwhelmed with their own inability to operate effectively within the context.
Managing complexity and volatility
Individuals can become better prepared for managing complex and volatile situations. This can be through a combination of training and experience. It is critically important to understand that complexity and volatility are individual constructs. What is complex and volatile to one individual can be the normative state to another. It is important to understand that individuals can be developed to operate more effectively within these contexts but the question of whether the organisation wishes the individual to operate within their environment will largely rely on their own leadership qualities.
Ambiguity and managing risk
When an environment becomes complex and volatile, it is unlikely that any clear picture or definitive decision will become apparent to an individual. The ambiguity of this dilemma can create a stagnation or decision myopia within an organisation, where individuals wait for the answer to emerge. However, leadership is the ability to effect change and engage the whole organisation in managing the context as a collective. Rarely will the answers to a problem come from the leader. These insights will often emerge from the wider community, the secret is spotting the answers, giving direction and support to achieve the aim and it is this that is effective organisational leadership.