The VUCA Report 2016

2. With The VUCA Report™, we’re helping you with that question. By collecting insights from business leaders around the world. More than 400total Our original analysis included 280 responses; more people participate every day. Join us! Visit: www.strategicagilityinstitute.com www.strategicagilityinstitute.com© 2016 The Strategic Agility Institute. All Rights Reserved. 2

4. VUCA = volatility, uncertainty, complexity, ambiguity. 69.57Is the 2016 VUCA Index™. This means that leaders we surveyed predict turbulence will INCREASE in the next three years. The VUCA Index™ is an estimation from 0 (much less) to 100 (much more) regarding the expected level of future VUCA. It’s an average based upon how respondents answered this question for each of the four components of VUCA: “Compared with the LAST three years, what do you expect the NEXT three years to be like for your organization in the following areas?” www.strategicagilityinstitute.com© 2016 The Strategic Agility Institute. All Rights Reserved. 4

9. 10 Cyber security 9 Big data 8 Accessing high-quality talent in new geographies 7 Changes in expectations between work and non-work life www.strategicagilityinstitute.com© 2016 The Strategic Agility Institute. All Rights Reserved. 9

10. 10 Cyber security 9 Big data 8 Accessing high-quality talent in new geographies 7 Changes in expectations between work and non-work life 6 Changes in hiring practices www.strategicagilityinstitute.com© 2016 The Strategic Agility Institute. All Rights Reserved. 10

11. 10 Cyber security 9 Big data 8 Accessing high-quality talent in new geographies 7 Changes in expectations between work and non-work life 6 Changes in hiring practices 5 Differences in working styles across generations www.strategicagilityinstitute.com© 2016 The Strategic Agility Institute. All Rights Reserved. 11

12. 10 Cyber security 9 Big data 8 Accessing high-quality talent in new geographies 7 Changes in expectations between work and non-work life 6 Changes in hiring practices 5 Differences in working styles across generations 4 Use of social media www.strategicagilityinstitute.com© 2016 The Strategic Agility Institute. All Rights Reserved. 12

13. 10 Cyber security 9 Big data 8 Accessing high-quality talent in new geographies 7 Changes in expectations between work and non-work life 6 Changes in hiring practices 5 Differences in working styles across generations 4 Use of social media (e.g., Facebook, LinkedIn, Twitter, blogging, etc.) 3 Increasing demands upon leaders www.strategicagilityinstitute.com© 2016 The Strategic Agility Institute. All Rights Reserved. 13

14. 10 Cyber security 9 Big data 8 Accessing high-quality talent in new geographies 7 Changes in expectations between work and non-work life 6 Changes in hiring practices 5 Differences in working styles across generations 4 Use of social media (e.g., Facebook, LinkedIn, Twitter, blogging, etc.) 3 Increasing demands upon leaders 2 Tools for helping people collaborate across dispersed locations www.strategicagilityinstitute.com© 2016 The Strategic Agility Institute. All Rights Reserved. 14

15. 10 Cyber security 9 Big data 8 Accessing high-quality talent in new geographies 7 Changes in expectations between work and non-work life 6 Changes in hiring practices 5 Differences in working styles across generations 4 Use of social media (e.g., Facebook, LinkedIn, Twitter, blogging, etc.) 3 Increasing demands upon leaders 2 Tools for helping people collaborate across dispersed locations 1 Economic cycles/recession www.strategicagilityinstitute.com© 2016 The Strategic Agility Institute. All Rights Reserved. 15

17. Technological advances are also highly disruptive. Looking ahead to 2017, we see 3 areas to watch in particular: 1 2 3 Internet of things (the networking of physical objects embedded with electronics, software, sensors and connectivity) 3D printing/additive manufacturing Automation (e.g., advanced robotics, driverless vehicles, etc.) www.strategicagilityinstitute.com© 2016 The Strategic Agility Institute. All Rights Reserved. 17

19. The AGILE Model® Key Drivers & Capabilities Anticipate Change  Visioning  Sensing  Monitoring Generate Confidence  Connecting  Aligning  Engaging Initiate Action  Bias for Action  Decision-Making  Collaborating Liberate Thinking  Bias for Innovation  Customer Focus  Idea Diversity Evaluate Results  Creating Expectations  Real Time Feedback  Fact- Based Measures Agility is the capability to sense and respond to the forces of change. www.strategicagilityinstitute.com© 2016 The Strategic Agility Institute. All Rights Reserved. 19 Agility has five drivers and 15 capabilities.

20. When asked to rate critical agile capabilities within their organizations on a scale from 1 (strongly disagree) to 6 (strongly agree), respondents on average rated Decision Making (3.54) and Real-time Feedback (3.70) as the lowest. Despite higher scores on Customer Focus (4.67) and Bias for Action (4.52), none of the average scores were 5.00 (indicating an average of “agree”) or higher. Strongly agree Agree Somewhat agree Somewhat disagree Disagree Strongly disagree How agile are most organizations? www.strategicagilityinstitute.com© 2016 The Strategic Agility Institute. All Rights Reserved. 20

21. We also asked directly: What is the biggest OBSTACLE keeping your organization from becoming more agile? www.strategicagilityinstitute.com© 2016 The Strategic Agility Institute. All Rights Reserved. 21

22. The most common answer? Behavior and culture. • “Relying on adherence to traditional practices because of their comfort level and ‘proven’ track record” • “Reacting to one-off messages that are not based on real facts and create a lot of unnecessary work” • “Each level of the organization is not empowered to make decisions that are appropriate to that level.” • “Executive leadership’s resistance to change and a culture that doesn’t hold people accountable” • “Micro-managing folks, resistance to change” www.strategicagilityinstitute.com© 2016 The Strategic Agility Institute. All Rights Reserved. 22

23. So, what is the most important practice that your organization is CURRENTLY DOING that is helping you become more agile? www.strategicagilityinstitute.com© 2016 The Strategic Agility Institute. All Rights Reserved. 23

24. The most common answer? Effective communication and frequent, productive meetings. • “Having more and better conversations” • “Daily manager standup meetings” • “Meeting weekly and regularly” • “Communication about changes” • “Open forums for conversations, leadership training” www.strategicagilityinstitute.com© 2016 The Strategic Agility Institute. All Rights Reserved. 24

25. And what is the most important practice that your organization SHOULD DO in the future to become more agile? www.strategicagilityinstitute.com© 2016 The Strategic Agility Institute. All Rights Reserved. 25

26. The most common answer? Build the team by understanding perceptions and hiring, training and developing for agility. • “Constant skill development and learning across the organization at all levels” • “Training for leaders so they are aware how to manage through change and uncertainty” • “Hiring talent that have a growth mindset and willingness to change” • “Recruit and retain top talent” • “Focus groups for real time feedback” www.strategicagilityinstitute.com© 2016 The Strategic Agility Institute. All Rights Reserved. 26

29. www.strategicagilityinstitute.com© 2016 The Strategic Agility Institute. All Rights Reserved. 29 1 2 Join the movement! Visit www.strategicagilityinstitute.com to learn more. While you’re there, take The VUCA Report™ survey and download the full report.

30. www.strategicagilityinstitute.com© 2016 The Strategic Agility Institute. All Rights Reserved. 30 1 2 3 Join the movement! Visit www.strategicagilityinstitute.com to learn more. While you’re there, take The VUCA Report™ survey and download the full report. Become a continual student of agility!

The VUCA Report 2016

Ben Baran, Ph.D., SPHR

The VUCA Report 2016