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23 Oct. 2012 | Comments (0)
John Kenneth Galbraith’s 1977 book and television series, titled “The Age of Uncertainty,” needs to be revisited. Corporate leaders are now explaining away trillions of dollars of capital on their balance sheets as the result of “too much uncertainty.” This situation is paralyzing their capital investment decision-making processes. Those critical investments can induce the global economy to move faster in the absence of governments facing huge deficits.
Galbraith points out that organizations can, in fact, function effectively under turbulent times. To do so, however, means they have to be willing to actively learn and think creatively, and then make really big changes nimbly. Yet, that requires major investment in developing various learning and change capabilities, and many organizations are creating these necessary investments right now.
In Samuel Beckett’s, Waiting for Godot, Vladimir and Estragon spend the entire duration of the play waiting for someone neither of whom knows, could recognize, and who, in the end, fails to appear. I feel that same frustration when listening to corporate leaders – and the television pundits who echo their refrain – complain about uncertainty. It makes for an interesting but fallacious argument. There is growing research that indicates that organizations which make investments in learning and change capabilities become more agile and resilient, and, therefore, perform better than other companies during these turbulent conditions. Through our research and experiences, my colleague, John Selsky, Associate Professor of Management at the University of South Florida, and I make a cogent case regarding this topic, concluding:
- Rapid and disruptive change is increasing, not diminishing, and the search for lasting micro-environments of little or no turbulence is fruitless;
- Organizations with greater adaptive capabilities perceive their dynamic environments as less challenging and also a source of significant competitive advantage compared to those with lower capabilities;
- When those capabilities are designed, developed, and applied effectively, organizations become more agile and resilient (both which happen to be essential qualities for managing turbulent environments);
- Agility and resiliency are, most importantly, strongly associated with higher organizational performance in terms of profitability and competitiveness; and
- Mastering those capabilities is a major leadership challenge requiring commitment and energetic championship by senior human capital executives.
Let’s stop waiting for something (or someone) to materialize that simply won’t. Less turbulent, stable environments are an illusion. Uncertainty will always be a variable in any decision-making model. Financial planners, operations researchers, and human capital (HC) executives need to build robust management capabilities for that variable. Since so many of these competencies are within the human capital domain, it is HC executives and professionals who must lead the way.
For more information on this topic, read Joseph McCann and John W. Selsky’s book, Mastering Turbulence: The Essential Capabilities of Agile & Resilient Individuals, Team and Organizations (2012), and please make sure to join us on June 7th at 2 p.m. for a book discussion webcast featuring this book and its authors.
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