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The VUCA acronym — which refers to volatility, uncertainty, complexity and ambiguity — was originally conceived in the late 1980s at the U.S. Army War College. There, it was part of a curriculum focused on helping officers in training learn to navigate a multilateral geopolitical world stage dominated by the confusion, chaos and sinister unknowns of the Cold War era. Since its conception over 30 years ago, VUCA has become something of a crossover phenomenon and is now regularly invoked by CEOs, professors and journalists in the business sphere to concisely describe environments defined by those challenging traits.
I don’t think I’d be stepping out on a particularly precarious limb to declare that major players in the cryptocurrency space are now living through a period of profound VUCA. Bitcoin recently dropped to its lowest price in nearly a year, Ethereum is facing similarly steep tumbles and the rest of the crypto coins have suffered commensurately for much of 2022.
And while plenty of major corporations continue to introduce their own iterations on non-fungible tokens, the broader NFT market has faced a worrisome flattening. While plenty of critics will be tempted to declare these recent declines the early stages of a downward spiral for digital trends that they never believed would have real staying power anyway, the more nuanced reality is that a plethora of complex economic forces are at work (historic inflation and stock market correction territory being just two).
For CEOs and other leaders in the crypto and NFT spaces, now is the time to demonstrate the kind of leadership qualities that will help your companies navigate these choppy waters and avoid capsizing. Because in a business environment dominated by the four apocalyptic horsemen of VUCA, it’s crucial to remember that change operates for better and for worse, and all the negative volatility currently roiling these incipient industries will not last forever.
Don’t lose sight of the forest for the trees
Whether you work in the stock market, the oil and gas sector or the overlapping worlds of crypto and NFTs, periods of unusual, extended volatility tend to lead to unusually high levels of prognostication. In the midst of VUCA, journalists, columnists and others members of the media won’t be able to resist the opportunity to turn a temporary development into a larger, more concretized narrative, one that foretells doom and gloom and perhaps even bespeaks the inevitable downfall of your business. There will even be the retroactive reassessments, as media personalities deride and disparage projects that were once their darlings, insisting that the gathering demise had long been written on the wall.
During times like these — when the current is turning against you and amplified voices standing atop major platforms are unified in a chorus of scathing critique — it’s absolutely critical to keep sight of the bigger picture. Leaders do this, in part, by maintaining a clear, uninterrupted connection to their core galvanizing vision. If you’ve introduced a new cryptocurrency and its value is plummeting, focus on reversing the disparaging narratives surrounding it and forcibly articulate its utility. If you’re in the middle of an NFT project during a time of overarching uncertainty for the industry, remember everything groundbreaking and valuable about your nascent product.
Leaders need to maintain a sense of perspective for the sake of their companies and the teams that comprise them, and that means understanding that volatility will only bury you if you allow it to. Even under the most tumultuous circumstances, the best CEOs maintain an internal locus of control, insisting that it is firmly within their power and capabilities to steer their firms through the vicious storms whose plangent thunderclaps are all but guaranteed to be temporary weather.
Cultivate “affect tolerance”
Affect tolerance is a term originating in the field of psychology that refers to our ability to withstand emotions evoked by circumstances beyond our control. Affect tolerance is positively correlated with traits like composure, equanimity and self-possession, and it’s put to the test during times of substantial volatility. When there’s negative noise surrounding your industry, leaders must show their teams that they’re largely unaffected by it. Keeping everything in its proper context, the best leaders with the greatest degree of sangfroid will know that all industries are subject to everything from VUCA to media criticisms and dismissals to the cyclical forces inherent in all industries.
Leaders with the ideal level of affect tolerance will not act impulsively when markets are down or consumer demand is waning. Rather, they’ll redouble preexisting efforts, strategize potential adaptations and maintain a high degree of confidence in the objective value that their company is offering the world. In this way, demonstrating affect tolerance is a form of armor or insulation, ensuring that all your company’s potential will not be squandered by fear, rash judgements or the caprices of the marketplace.
Relationships are an invaluable part of any growing company. They serve as the bedrock of communication, loyalty and a slew of other factors that separate businesses with longevity from those destined to ultimately flounder and fail. In my experience, the nature, quality and depth of relationships in a business starts from the top. Leaders must invest in their collegial relationships if they want to see that behavior replicated throughout their company, and few traits are more important to good working relationships than transparency.
The best leaders will understand that hiding strategies, decisions and even thought processes from their employees during trying times will only lead to mistrust, alienation, and even attrition. Studies have shown that a staggering 57% of workers quit their jobs because of their bosses, and there’s little doubt that deception, disingenuousness or even just excessive opacity are part of the reason why some of these employees leave their workplaces. Leading with honesty, openness and clarity, on the other hand, is bound to win respect and even gratitude from your employees, especially in these times of anxiousness and uncertainty.