In the past 20 years, the world has become significantly more complex, more unsettled and less predictable. The American military coined the acronym VUCA to describe this trend: "volatile", "uncertain", "complex" and "ambiguous". In this world, leaders have to lead differently – officers and managers alike.
This is the new world companies have to adapt to, according to Charles-Edouard Bouée, member of the global management team and Chief Operating Officer at Roland Berger Strategy Consultants. His new book "Light Footprint Management: Leadership in times of change" (Bloomsbury), was presented at a panel discussion held by the European Club at the Harvard Business School. The panel was entitled "How to lead in a VUCA world – Lessons from the US military and China", and Bouée, himself formerly a co-president of the European Club, discussed his ideas with students and members of the Harvard Business School community.
Bouée's management model draws on ideas and methods used by US military leaders. The "light footprint" concept was developed at the US Army's War College in Carlisle, Pennsylvania, to prepare students for military leadership in the VUCA world. "The US Army has successfully used this military model around the world," says Bouée. "With the business world also exhibiting 'VUCA' characteristics, companies can and should transfer these strategies for their own use."
Modular leadership, flexible cooperation
In his book, Bouée defines what a "light footprint" company needs in the VUCA world of the global economy. This company should be organized in modules, much as the small elite commando units of a military. The individual parts of the company are interdisciplinary and are largely autonomous, but are coordinated by a central body. "Light footprint means moving from a hierarchical to a modular organization," says Bouée. "In other words, away from all-powerful executive boards to self-governing, interdisciplinary modules."
What's more, a light footprint company expands its resources on demand by using flexible cooperative arrangements and partnerships. These impose less of a burden on the company than takeovers or acquisitions. Here Bouée describes an equivalent to strategic alliances forged by the US military: set up as needed and changed every now and again. A light footprint company also has to be flexible and quick enough to exploit surprise moves in competition. Again, Bouée draws a parallel to the US military: whereas it used to have to mobilize an entire army, now it can deploy small elite units rapidly and with precision.
Bouée recommends increasing the use of automation and technical innovations – similar to the automation, unmanned devices and high-tech used by the US Army. And finally, it is becoming increasingly important for companies to gather intelligence about markets, competitors' products and customer needs, evaluate the data and then translate it into targeted marketing and sales actions – analogous to covert military operations.
"Light footprint" elements as survival strategy
Why are these characteristics so critical for companies today? Charles-Edouard Bouée has the answer: "A light footprint company is better adapted to the extremely volatile global economy and can respond to changes more quickly and sensitively. There is less risk of being thrown off track by unexpected developments so typical of the VUCA world." By contrast, companies and organizations with rigid hierarchical management structures can lose their competitive edge, especially if they are international: "Centralized management is usually fairly isolated from local conditions outside its home market, so it often can't respond appropriately to rapid and unforeseen developments," says Bouée.
He goes one step further: Since "VUCA" applies to modern society as a whole – and not just the military and business worlds – he believes all types of organizations and management can benefit from moving to a light footprint.
