My Name is VUCA

In my last blog I outlined the theory of tame, crisis and wicked problems as well as the military inspired concept of VUCA.

VUCA was introduced by the U.S. Army War College to describe the more volatile, uncertain, complex and ambiguous multilateral world which resulted from the end of the Cold War. The common usage of the term VUCA began in the 1990s and derives from military vocabulary. It has been subsequently used in emerging ideas in strategic leadership that apply in a wide range of organisations, including everything from for-profit corporations to education. VUCA is moving into the business environment, which includes, of course, insurance and financial services.

According to the principles of VUCA:

Volatile change happens faster and more frequently

Change is Uncertain as there is a lack of predictability

Complex problems are not just complicated but difficult to understand, e.g. the “Haziness of Reality

Ambiguous: what it means to me is not necessarily what it means to you

All of us - whether we are members of a team in a Lloyd’s Syndicate or an actor in a war situation, we are all seeing disruption through a different lens so the key to success is always to maintain a sense of the ‘Vision’. According to Steve Harpum who presented at a recent Fifth Step seminar, the mirror image of VUCA and key to keeping a project on course always focusing on delivering the end result, is as follows:

Vision: what is the big prize I am going for all the time? Every decision is taken with the end result in mind.

Understanding: grow your understanding. More listening, less telling, understand other people’s perspective, what are their big ticket items?

Clarity: analyse what you are listening to make sense of information. What matters for the delivery of the vision?

Adaptive Capability: be able to react to unplanned activity to take you towards the vision.

People talk about agility but that word means different things in different environments. Do you have the capacity in your organisation to react to unexpected or uncertain change? Call it contingency planning, Plan B. It’s not a question of having a pre-written plan, that’s generally out of date the moment it’s published, it is a question of resources and having the ability to deploy those resources effectively so that you can react to unplanned activity and keep true to the overarching vision.

Many people have made the mistake of saying that deploying a new software, for example, is IT change. It’s not. It is part of a process that has a start and an end and results in business change. For example an underwriting or claims team are making a case for a new system, you need to help establish what is the benefit they are going to obtain from the new system and when they have got there how do they know that you have got there? Clear, demonstrable benefits must always be identified before proceeding.

Collaboration is key: you won’t know the answer to everything. Talk to people that are going to be impacted before they are impacted, identify the ‘passionate champions’, what role have they got to play in the process, engage early, create a culture of ‘We are in it together’ without a transparent vision, there will be no success

LESSONS FROM KANDAHAR FOR INSURANCE PRACTITIONERS?

On a wider London market level there may be parallels between the Kandahar experience and London market transformation, which is looking at how we modernise. Swap the five Kandahar partner nations with Lloyd’s and the three associations LIBA, LMA and IUA representing different parties and one sees parallels. In terms of contributing parties in the IUA alone we have 46 members, a similar total in the LMA and 200 Lloyd’s brokers so they are all the people we are trying to bring together to make everything happen.

There are approximately 34,000 people that work in the London market across insurance companies and we need to engage to establish how change impacts them and their organisations, what their interests are, how can they help get that vision realised. Whatever the transformation project, however, whether you work a Lloyd’s Managing Agent, broker, or loss adjuster, vision is critical to understanding where you are going. This is particularly true when one assesses the present day reality of the London market and the challenges it faces from technological disruption, new business models, movement of people/capital and the current trend in the M&A space.

Certainly in my experience of transformation projects or Mergers and Acquisitions there are situations where you bring two companies together, each organisation generally come with the same problems but they are ambiguous, not just for the organisations but the people there as well and this results in uncertainty. My experience has taught me to focus on the people element, make sure that they are heard and make sure I understand what they do on a daily basis. Listening to people is essential to for delivering change, they will only change their mind-sets when they can see the benefits to them, you can’t ‘preach’ change you have to ‘teach’ change

In an M&A situation, for example, we look at whether there is an intent to rationalise the workforce. Knowing about that and mentoring and coaching the parties that are being affected so that they are still able to perform is key to the role because without their goodwill it will be extremely difficult to conclude a successful outcome. There has to be something in it for them, you need to establish what that is for each of them. The uncertainty and the complexity factor comes back to people, keeping them on board and providing them with that clarity as to what change might be.

In my next blog I examine change communications and delivery.