Forty-five participants from 32 companies recently attended an IMD Discovery Event to find out what characterizes a high-turbulence environment, how to lead and drive change in the face of adversity, what organizational and personal capabilities are needed to succeed in turbulent times, and how to create and run an ambidextrous organization.
Turbulence can come about as a result of both external and internal factors. Some are cases of force majeure, such as natural disasters, acts of war or terrorism, while others are more commonplace, such as activity in the international commodity or financial markets, or changes in the geopolitical landscape, for example.
Internal factors leading to turbulence are mostly due to significant changes in company strategy, resulting from a deteriorating performance or M&A activity, for example, as well as internal seismic shifts as a result of leadership succession or cases of serious deception (like the Volkswagen fraud case). Very often companies experience turbulence both internally and from the external environment.
The rapid development and spread of social media amplifies the speed and magnitude of turbulence. A memorable example is Greenpeace’s successful campaign in 2010 in which it used a YouTube video to protest against Nestlé’s use of palm oil in its KitKat bar.
The Tunisian revolution in December 2010 is a good example of the effect of social media in the political sphere. In this case, social media did not cause the revolution, instead it accelerated it by enabling the protesters to share information and to coordinate protests.
In response to the increased role of social media, many organizations have special teams responsible for monitoring social networks in search of new ideas, trends and competition screening. In addition, they identify and respond to negative incidents and comments that could potentially threaten the company’s reputation.
What is turbulence?
Among the characteristics that distinguish turbulence from other critical situations are its large and uncontrollable scale, high velocity and fluctuation, its cascading effect and unclear patterns of evolution, leading to a chaotic situation.
It is commonly accepted that today’s organizations (in both the public and private sectors) operate in an increasingly volatile, uncertain, complex and ambiguous environment (the VUCA world). Yet in times of turbulence, the situation quickly deteriorates and becomes explosive, full of conflict, insecurity and unpredictability, and people involved can become polarized and unreasonable. This leads to irrational demands that make no sense from a logical perspective, and leaders have to face strong and relentless opposition that could escalate conflict to the next level.