(Part two in a three-part series)

Change management guru John Kotter, a former leadership professor at Harvard Business School and author of the New York Times best-selling book Leading Change, says, “Perhaps the greatest challenge business leaders face today is how to stay competitive amid constant turbulence and disruption.” Yet his research shows that most change efforts fail to achieve their intended result. History is replete with examples of well-known companies that were once leaders in their respective industries, but failed to successfully keep up with the speed of change in an environment dominated by volatility, uncertainty, complexity, and ambiguity (VUCA).

For example, in the 1970’s, photography giant Eastman Kodak was one of the most dominant and respected companies in the world. But they failed to keep up with the digital revolution and filed for bankruptcy in 2012. And of the 11 “great” companies that Jim Collins highlighted in his 2001 best-selling book, Good to Great: Why Some Companies Make the Leap . . . and Others Don’t, two were bankrupt a decade later (Circuit City and Fannie Mae), and in 2016 one was found guilty of consumer fraud (Wells Fargo).

So how can you prevent your team from being left behind in a VUCA environment that is driven by an accelerating rate of technological advancements compounded by corresponding increases in the volume and velocity of information flow? It boils down to adaptability.

In part one of this three-part series on Leading Teams Through Uncertainty, I introduced three cultural focus areas for business leaders to position their teams for success in a VUCA environment: agility, adaptability, and resiliency. Here in part two, we’ll focus on how you can develop adaptability in your team’s DNA to keep up with the speed of change, by fostering an innovative culture and building an adaptable team.

Foster an Innovative Culture

First, to foster an innovative culture in your team, focus on creating an environment with three key characteristics: psychological safety, teamwork, and a willingness to embrace risk and failure.

Psychological Safety

In his book, Creativity Inc., Ed Catmull, co-founder of Pixar and president of Walt Disney Animation Studios, asserts that successful innovation is rarely an “aha” moment, but rather the result of a painful, disciplined process underpinned by candid collaboration and brutal honesty in a psychologically safe environment. Furthermore, a 2012 Google study called Project Aristotle revealed that an environment of psychological safety, where team members “feel confident that no one on the team will embarrass or punish anyone else for admitting a mistake, asking a question, or offering a new idea,” is the most important characteristic of a high-performing team. Bottom line – make honesty and respect the norm on your team so members feel comfortable being authentic, sharing differing opinions, and sharpening each other’s ideas.

Teamwork

We often associate innovation with a solitary creative genius. But the authors of Collective Genius: The Art and Practice of Leading Innovation assert that, “Innovation is a team sport” that almost always results from “multiple hands, not the genius of some solitary inventor.” As a leader, create a sense of community in your organization that prioritizes the fruits of collaboration over individual accomplishments and welcomes diversity of thought.

Embrace Risk and Failure

Teams that are willing to embrace risk and capitalize on the lessons of failure are better positioned to innovate new approaches and remain competitive. Peter Drucker, whom many have called “the founder of modern management,” describes innovation as a purposeful search for new opportunities through the focused application of knowledge, hard work, and lessons learned from failure. Assure your team that failure is simply part of the process, as long as they fail quickly and learn from it.

Build an Adaptable Team

With the above three mindsets in place to foster an innovative culture, next concentrate on three areas to build an adaptable team: organizational flexibility, decentralized decision-making, and a culture of trust.

Organizational Flexibility    

Design your organizational structure around task-organized teams tailored to accomplish your mission. Instead of functionally static, hierarchical teams that can easily create operational stovepipes, prioritize cross-functional teams that can operate efficiently and effectively in a dynamic, fluid environment characterized by rapidly changing information and fluctuating functional requirements.

Decentralized Decision-Making

Enable decentralized decision-making by pushing decisions down to the lowest practical level. General Stanley McChrystal calls this “empowered execution” in his book, Team of Teams: New Rules of Engagement for a Complex World. Empower leaders within your organization to operate, pivot, and call audibles without you. It’s next to impossible to provide vision and direction (leader’s guidance) to help your team navigate uncertainty if all you’re doing is focusing on the day-to-day.

Culture of Trust

Develop a culture of trust so your team members can depend on each other to operate at the speed of change. Trust is the glue that enables adaptable teams to stick together in a VUCA environment. To foster a culture of trust, commit to leading with integrity by always striving to do the right thing. Set the example by leading with competence through a commitment to “knowing your stuff” and a dedication to self-improvement. And lead with composure by setting a calm and positive tone.

In a world dominated by uncertainty, one thing is certain: change is inevitable. Adaptability is the key to keeping pace with the speed of change and preventing your team from being left behind. Foster an innovative culture by creating an environment characterized by psychological safety, teamwork, and a willingness to embrace risk and failure. And build an adaptable team by prioritizing organizational flexibility, enabling decentralized decision-making, and developing a culture of trust.

Stay tuned for part three – “Resiliency” – in this three-part series on Leading Teams Through Uncertainty. To find out if you are leading your team to consistently perform at a high level in the face of pressure and uncertainty, take the Performance Pressure Test. If the results are helpful to you, forward the quiz to a friend or colleague. You can also check out my new book, The Substance of Leadership: A Practical Framework for Effectively Leading a High-Performing Team, which will be available September 21st on Amazon.