While the world has experienced an unprecedented period of economic growth for the past fifty years (positive annual GDP growth in 54 of 55 years since 1961), the global economic growth rate in terms of GDP and measured in decades is 31% lower today than it was in the 60’s. Also, it is important to note that the world GDP per capita has also declined 37% since the highs of 1960s.
The challenge for business leaders in today’s slower/slowing growth period is to find ways to reverse the trend and to shift and propel their organization into growth mode. The growth engine can be stimulated and energized, not with real capital, but with a greater LEADERSHIP focus on human capital. This can be achieved by: (1) looking internally, assessing and formally embracing an “engaging” and a more inclusive workforce as well as social/community engagement — embracing and practicing “doing good while doing well,” and (2) recognizing and responding to the VUCA World.
Inclusiveness and Diversity: Improving Corporate Performance, Drive Growth, and Enhance Employee Engagement
For years compelling research has verified and validated what has been known for some time — that diversity and inclusiveness achieves more positive and sustainable results: “effective decision making, innovation, and economic growth by promoting deeper information processing and complex thinking“. Further, as more and more leaders understand and embrace the “contributing-belonging” cycle (“the more people feel they belong, the more they will contribute”), the easier their path will be to real and sustainable growth and well-being.
A significant milestone to formally address inclusion and diversity occurred earlier in 2017 when 150 CEOs from leading global companies across the US signed a commitment and pledged to “take action to cultivate a workplace where diverse perspectives and experiences are welcomed and respected, where employees feel encouraged to discuss diversity and inclusion…” This movement, and now an organization known as CEO Action for Diversity & Inclusion, will be sponsoring a summit this fall where they will assess: “initial progress, understand fundamental gaps, and determine the next phase of this work.” It is likely that CEOs and from other areas of the world will see this as a call to action.
Leading in Today’s VUCA World — On Becoming a SuperAccelerator Company
A major challenge for business leaders today is effectively navigating in the VUCA World and the need to alter one’s management worldview/practice and to change from the historic “probable outcomes” approach to “what is possible”.
Learning to migrate from “The Probable” to “The Possible” will require formal commitment and action to leadership re-tooling. Some astute business leaders have already figured this out and have recognized that in order to effectively navigate in this new environment they will have to address this head-on with their senior leadership teams and to then integrate and SHIFT their company culture. Leaders today are still likely in those early stages of “VUCA Survive” and with the right focus and engagement they can migrate to “VUCA Thrive”.
There is a path and an approach and some very interesting work done over the past two years at Heidrick & Struggles as they have identified methods and factors that drive to accelerated growth in the VUCA world. Based on extensive research, Heidrick & Struggles identified four key, unique attributes/tests of company performance that are key to driving accelerated and sustainable growth: Mobilize, Execute, and Transform with Agility.
First tests started in 2016 which identified those “superaccelerator” companies by applying their model to the top 500 companies in the world. Twenty-three companies were identified in 2016 and twenty-five have been identified in 2017. It is important to note that “the companies come from a range of industries—healthcare/life sciences, consumer, financial services, real estate, professional services, and communications, as well as technology.” Clearly, the answer is not always high-flying tech companies which many believe are the only ones to have a monopoly on innovation and agility. Granted, Heidrick’s model and test is limited, but serves as a great starting point for business leaders as they plan and execute their VUCA growth plans. There are likely some key lessons learned from these companies as they reach “VUCA Thrive”. No doubt that there are other “VUCA Conquering” success models, with the key leadership action to acknowledge and take action with a sense of urgency. And by the way, there are no indications that the VUCA World is moving off its present course.
There has also been some great work done by Dr. Hitendra Wadhwa at Columbia University on high-impact decision-making in the VUCA World where he identified six critical practices to help leaders arrive at “VUCA Thrive”: (1) be reflective and iterative, (2) nurture conflict and make it constructive, (3) integrate, collaborate and be a team player, (4) encourage diversity and collaboration, (5) intelligence distributed across the team/organization, and (6) maximize results and learning. Ample evidence exists today that the VUCA World can be tamed (real and sustainable growth) through emboldened and enlightened leadership.
Early adopters have already demonstrated that inclusive prosperity and real and sustainable growth can both occur in a VUCA world. The key is continued dialogue, sharing and learning to leverage real human capital.
About the author:
Mark Beliczky is a Consultant & Adviser to The Carlyle Group in Washington, DC, New York City. The Carlyle Group is a leading global private equity firm with $170BN in assets under management.
Mark has a faculty appointment at Georgetown University, and past management lecturer at Vienna University, The Ohio State University, and former Board Co-Chair for Heidelberg Universityʼs School of Business.