Over recent decades the world in which we work has experienced rapid change on a massive scale. Globalisation, the emergence of new economic powerhouses and unprecedented technological developments have created what has come to be known as a ‘VUCA’ world.

Emerging from the global financial crisis and exposed to the threat that new forms of competition can spring up without a moment’s notice, businesses today are operating in the most volatile, uncertain, complex and ambiguous trading environment in living memory.

While the likes of Apple and Amazon have achieved extraordinary successes in these turbulent times, most firms face what feels like an endless battle for survival. Approaches to problem solving that could be relied upon to solve the challenges of the past are no longer appropriate for many of those we face today.

Indeed, our modern VUCA world is as pressing a challenge for business leaders today as it was for the military generals that first coined the term at the end of the last millennium. Chaos and complexity have added considerably to uncertainty and have had a profound psychological and behavioural impact on organisations.

Answers have become harder to find. It is more difficult to identify the true root cause of problems. Accelerated change means that, by the time we get to the right answer, the original question may have changed. There are very few black and white issues in business today; the world is far more nuanced and leaders must be prepared to consider that there are many more than fifty shades of grey.

Legacy approaches contribute to uncertainty

Today even the most positive leaders find their inability to plan several years into the future discomforting. Uncertainty itself is not a problem, but combined with post-crisis financial and competitive pressures, it often results in reactionary leadership, short-term decision making and paralysis by analysis. These are not behaviours that create outstanding organisations.

Businesses are – in part – suffering because they made the right decisions during the downturn. Corporations needed a firm hand on the tiller and leaders skilled in anticipating and managing risk. Unfortunately, the leaders who survived the downturn don’t tend to have the mindset required to thrive in a VUCA world.

Besieged by chaos, complexity and new forms of competition, businesses need leaders that are capable of looking beyond the departmental and organisational boundaries that separate people into groups of “us” and “them”, create distrust and undermine effective collaboration.

The Centre for Creative Leadership speaks well on this subject. It holds that modern leaders must find ways of working with others despite differing values, perspectives and beliefs in order to develop effective solutions to the most pressing challenges.

Death of HR

HR as we have known it is dead because it has simply not adapted to these new business requirements. Having achieved a seat at the top table, most HR leaders have sought to avoid disrupting the status quo and largely abdicated responsibility for driving the kind of people innovation and culture change required to build the successful organisations of tomorrow.

Crippled by fear, risk aversion and an inability to see a clear path forward, they have tended to reinforce the models of the past, concentrating on developing centres of excellence for day-to-day matters of control and compliance. This is the collective failure of business today in a microcosm.

People power

Most organisations with the ability to thrive in today’s dynamic business environment are struggling because they don’t empower people or tap into their full potential. While success in the 20th century was driven by process, structure and encouraging people to function more like machines, success in the future requires us to make more of the human side of business.

Humans have evolved to deal with uncertainty through collaboration, cooperation and using conflict in a constructive manner. Businesses need to encourage their people to develop mindsets geared towards connection, conversation and experimentation. Curiosity is crucial: we need to continually question whether we are doing things simply because that’s how they’ve always been done and seek new perspectives to identify potentially better solutions.

While different departments and reporting lines provide clarity of role and accountability, they also create artificial barriers that block progress. Organising people into silos of similar skills and functions reinforces the patterns required to solve simple and even complex problems, but discourages them from working with other departments or people outside of the business. It does nothing to encourage the kind of conversations required to solve the major problems we face today.

Overcoming wicked problems – where we know something isn’t right but cannot easily identify the cause and rapid change can make the right solution redundant before it can be implemented – can only be achieved through conversation. We must talk with those that have different perspectives on the same issue and use the kind of iterative approach to problem solving that is currently championed by the lean startup movement.

Overcoming fear

Businesses also need to redefine how they view fear and failure. Most of us allow fear to control of our lives. The key to eliminating it is to take back that control and look behind the self-imposed curtains our fears create.

There is much we can learn from other walks of life about how to cope with significant pressure and perform when it counts the most. Virtuoso musicians and top level sports people deal with such challenges and large audiences of potential critics on a day-to-day basis and can be an incredible source of inspiration.

Accepting that an informed failure is an inevitable bedfellow of success can be incredibly liberating, freeing people up to aim higher and achieve more than they might ever have thought possible. Businesses need brave leaders willing to try new things and make decisions based on the best insight they can gather quickly. They need to develop greater tolerance for ‘failure’ and even celebrate it as a source of learning and a necessary part of success.

To remain relevant and deliver the kind of people innovation and cultural change organisations require to be successful in the modern world, HR leaders need to be strategists, technologists and innovators. Those HR professionals that don’t come from a commercial background need to engage frequently with those that do. Everyone should look to other sources, outside of the world of business, for inspiration and guidance.

Part of the answer lies in leaders being willing to try new things and find new ways of thinking and points of view that might disrupt how they view the world. Having direct conversations with a wide range of different people is vital for achieving true insight.