“By definition, you cannot know everything in uncertain environments – the days of Renaissance man or woman are long gone. Management teams need to find individuals with different thinking paradigms who will challenge their assumptions and habitual thought patterns. The stuff of leadership is to recognise, ascribe, value and integrate these new ideas in such a way that people in the workplace act on them. In a sense, it is a process of developing a narrative about the future, having a viable story that employees can believe and want a part of.”

This senior executive officer of a US government agency, interviewed in 2009 at the height of the last financial crisis by one of the authors of this blog, gave notice that a new style of leadership is needed in a bewildering economic climate.

In military circles, this climate became known as VUCA, a diagnosis developed by the US Army to define the situation and challenges it faced in the Afghanistan and Iraq conflicts. The acronym stands for:

• Volatility: the nature and dynamics of change and its speed and catalysts.
• Uncertainty: the lack of predictability, the prospects of surprise and the sense and understanding of issues and events.
• Complexity: the multiplex of forces, the confounding of issues, no cause-and-effect chain and the confusion that surrounds us.
• Ambiguity: the haziness of reality, the potential for misreads, the mixed meaning of conditions and cause-and-effect confusion.

The VUCA formula made the jump into the business world and gained traction in describing the combination of rapid technological progress and unlimited connectivity, which has resulted in an explosion of data. If managed well, by you or your competitors, these can be translated into information, then knowledge and from there, to new opportunities.

The onset of Covid has magnified the VUCA environment tenfold – what we call “VUCA on Steroids”. It sets a stage for a new philosophy of leadership that empowers the individual to create and foster the continuous innovation that is the only possible response to the volatility, uncertainty, complexity and ambiguity that surrounds us.

In this new approach, the leader is no longer the one who has the answers. “Everybody has a plan until they get punched in mouth”, Mike Tyson said famously. Instead, solutions to the problems and challenges we all face need to be found by being purposefully agile or, to put it another way, “doing things to learn what to do”, as Peter Simms states in his insightful work Small Bets.

To set one up for this new world of experimentation, learning, and, when successful, scaling requires what we call ‘generative leadership’.

The generative nature of leadership creates a virtuous circle in which leaders generate value through innovation supported by knowledge through learning and inspiration through creativity.

All of this hinges on ‘generating’ their employees’ and their stakeholders’ excitement to live the purpose and contribute to the narrative they lead creating. The way forward is through a culture of learning in which one’s heart and gut counts as much as one’s intellectual prowess. In this sense, a little humility and vulnerability become as important as heroism and vigour.

Next month, we’ll explore the nature of these characteristics in more depth.