Organisations need ways to achieve predictability as well as methods to live with unpredictability. Dr. Elmar Kutsch, Cranfield School of Management, joined this month’s Innovation Day to illustrate how organisations can be innovative and resilient in the face of uncertainty and complexity.
Today’s fast-paced environment is driven by increasing volatility, uncertainty, complexity and ambiguity (VUCA). In response, managing VUCA is underlined by two approaches:
- Rule-based: When a crisis looms, autopilot is normally the default response. Firms typically counter a crisis with rule-based approaches based on past events and people’s compliance to rules and regulations, which in turn serves as a framework to react to future events.
- Mindfulness-based: Rule-based approaches don’t work for complex, unpredictable, or novel events. When such a crisis escalates, we need a flexible, human approach to identify options and pinpoint optimal solutions.
Dr. Kutsch outlined four modes of resilience organisations take in response to a crisis:
- Traditional - purely rule-based
- Infusion - combining rule-based and mindfulness
- Just-in time - deploying mindful capabilities
- Entrepreneurial - purely mindfulness-based
Members, including Camden Council, TGI Fridays, Valuation Office Agency and Interserve discussed the strengths and drawbacks for each of these resilience modes, and addressed how different contexts demand different modes. For example, the traditional mode showed a high degree of certainty but takes time to be effective. The entrepreneurial mode, though potentially chaotic, handles complexity and uncertainty well. Sometimes firms can benefit from a hybrid approach – either switching modes or using two simultaneously.
Organisations increasingly rely on rules and automation to counter a crisis, but to manage the unexpected and seize opportunities to innovate organisations need to activate mindful capabilities – and be ready to switch modes.
Next, this group will discuss how to Move from Innovation to Implementation. For more information and to join, please view the event page.