The call to ARTful leadership: Embracing adaptive capacity, resilience, and trust

Our VUCAST world calls for a new approach to leadership.

By Eric McNulty
June 29, 2016
Tara River, 2006. Tara River, 2006. (source: ShadowNS on Wikimedia Commons)

Although we are clearly in a digital age, many organizations remain rooted in an industrial model that optimizes for control rather than flow. Traditional organizational hierarchies reflect the assumption that customer knowledge, process wisdom, and decision-making capacity are rare. That is why the frontlines are required to push things up for evaluation, consideration, and ultimately judgement. ARTful organizations optimize instead for the flow of information, energy, and initiative. This unleashes abundant capacity deep in the organization to innovate and execute to better serve customers. When front line workers have both the freedom and incentive, they can act with both agility and intelligence.

Complex organizational challenges are rarely solved by a single person. As an ARTful leader, you will be more catalyst than commander. Your success is directly tied to your ability to ignite the enthusiasm, engagement, and imagination of your followers, peers, boss—and even your customers. The leadership exercise is cultivating value creation rather than extracting it, as was common in the industrial age organizations.

Learn faster. Dig deeper. See farther.

Join the O'Reilly online learning platform. Get a free trial today and find answers on the fly, or master something new and useful.

Learn more

In a previous post, I presented a radically changed context for leaders—a VUCAST world marked by volatility, uncertainty, complexity, ambiguity, system-scale change, and ubiquitous transparency—that calls for a new approach to leadership. Believing that acronyms can only be countered by acronyms, I frame that fresh view as ARTful leadership based on adaptive capacity, resilience, and trust.

Adaptive capacity

Adaptive capacity is the ability to embrace and thrive amidst change, to be nimble and proactive through periods of rapidly shifting context. The constants are mission focus, values, and continuous quality improvement rather than titles, functions, and even physical space. All of the latter should be malleable in service of the former.

In traditional organizations, formal structure is prized. There is great value in learning the ins-and-outs of the hierarchy. You steadily hone your understanding of the risks and rewards in the status quo. You can prosper by attending to alliances and political intrigue rather than focusing on customers. Change is threatening because it devalues your knowledge base. Shifts in structure can leave you out in the cold. I know because I’ve been there. I have been through multiple reorganizations as the company where I worked lurched from one static model to another in pursuit of the perfect structure. Sometimes I did well, and at others, I wound up collecting unemployment. Each of these change initiatives was a top-down endeavor, where the few congratulated themselves on their insight and wisdom. Too often, they returned again in a year or two to do it all over again.

ARTful leaders accept change as the chance to learn and improve. They understand that we simply can’t design organizations at the level of complexity at which they operate. When that dichotomy is ignored, too much imposed structure impedes function.  

ARTful organizations are what MIT’s Peter Senge, Harvard Business School’s David Garvin, and others have called “learning organizations.” When learning is a core value and central purpose, there is an understanding that the present is never the final destination. The quest is to improve by removing distortion from feedback loops that connect the company to the market, executives to the front lines, and headquarters to the field.

You can promote learning through frequent after-action reviews centered on four questions:

  • What was supposed to happen?
  • What actually happened?
  • What do we want to be sure to do again next time?
  • What do we want to change for next time?

Routinizing assessments as exercises in constructive criticism orients people toward continuous quality improvement. Ensuring that they are depersonalized and rank agnostic—everyone on an even playing field and free to speak—puts the emphasis first on the system rather than the individual. This, in turn, promotes driving for root causes and solutions because everyone benefits from improvements.

The patient quality movement in health care provides powerful lessons. I spoke to the chief quality officer at a major academic medical center. She explained to me that when faced with an adverse event such as a preventable patient death, they always looked first at the system. Responsibility for getting the system right fell to the organization and an individual would not be held responsible for a bad outcome if he or she followed the system. Such an approach takes away the defensiveness that can come after a possible mistake. It becomes easier to move beyond designations of “hero or zero” to a cadre of sleuths working side-by-side to improve performance.

Leaders foster and inspire adaptive capacity by continually asking questions that probe the system to discover what is likely to happen next: “What am I missing?” “Do we think—or do we know?” “What do you see?”


Many people think of resilience as the ability to bounce back. Instead, I define resilience as the ability to bounce forward. Time only moves in one direction; there is no returning to what used to be. Resilience is seen at the first moment you feel hope in the face of adversity. It’s about cultivating the feeling that “we can do it!”

Resilience is so important because the VUCAST world is full of turbulence. There are frequent bumps, shocks, and jolts. If you can’t take a hit and get back up, you won’t last long. Resilience is about perseverance. And, given the centrality of innovation in the knowledge economy, it requires a deep understanding of failure because discovery requires a lot of experimentation—and stumbles. As Einstein said, “Failure is success in progress.”

Among the most instructive perspectives on failure that I’ve found comes from John Danner and Mark Coopersmith in their book, The Other F Word. In their words, “you’ve already paid for it, so use it” to better understand what you know and what you don’t. You gain a lot when you treat failure as a learning moment. This doesn’t suggest you have a high tolerance for incompetence or negligence, but rather that you respect that no one is perfect and you need risk takers in order to be adaptive.

More important to you as a leader, fear of failure stifles people’s willingness to offer ideas, demonstrate initiative, or take action. Instead, people want to stay “heads down”—a position in which no one contributes their best. Danner and Coopersmith call this fear “failure’s force multiplier” because it “distorts the likelihood of failure and exaggerates its consequences.” They offer an approach that includes rehearsing major potential failures in order to “develop stronger reflexes.” Your acceptance that failure is both natural and able to be overcome is central to your resilience as a leader.

Leading through VUCAST is easier when you create an environment of “psychological safety,” where interpersonal risk taking is protected and rewarded. It is a hallmark of top performing teams according to Harvard Business School’s Amy Edmondson. Particularly, she says, when “we’ve never been here before, we can’t know what will happen; we’ve got to have everybody’s brains and voices in the game.” Psychological safety is intertwined with the characteristics of a learning organization.


The third component of ARTful leadership is trust as the foundation of a values-based culture. The U is daunting in a VUCAST world; there is much uncertainty, and that can take a psychological toll. It causes distraction and doubt. People naturally want to hold onto something solid. Looking to you as a leader, they want to know that you say what you mean and you mean what you say. That you have their backs. And more important, that you attend to their best interests along with your own. They may not like your every decision, but they will be more accepting of them when you are consistently trustworthy.

The “T” of transparency in VUCAST also looms large. Even in traditional organizations, leaders are under constant inspection. Today, transparency is indeed ubiquitous and the impact of every remark and each choice can spread and be amplified at blazing speed. And they can persist forever. Living and leading as a trusted individual has never been more important—or required more discipline and commitment.

One approach to leadership rooted in trust is servant leadership. Robert Greenleaf, who originally articulated the idea, wrote:

A servant-leader focuses primarily on the growth and well-being of people and the communities to which they belong. While traditional leadership generally involves the accumulation and exercise of power by one at the “top of the pyramid,” servant leadership is different. The servant-leader shares power, puts the needs of others first and helps people develop and perform as highly as possible.

While not the only trust-based approach, numerous studies have linked servant leadership to higher levels of trust. In one recent study that examined employees in a Canadian technology and manufacturing firm, a correlation was found between servant leadership and task performance—getting the job done, working well with colleagues, and focusing on the larger mission. What more could a leader ask? What more does an organization need to compete and thrive? The researchers posit that a servant leader’s recognition of the value of each individual and investment in team members’ development helped meet the employees’ psychological need for competence, autonomy, and relatedness (belonging).

Servant leadership also aligns well with the flow required in an ARTful organization. Investing broadly in employee development, sharing power, and modeling a focus on mission above personal self-interest, servant leaders tap into great reserves of capacity and capability in the organization. Success depends less on the wisdom of the hierarchy than on the collective commitment of talented individuals to a shared purpose and to each other.

In unsettled times, employees, investors, customers, and other stakeholders all gravitate toward organizations that are true to their stated values. They yearn for companies they can count on—and they reward them. Work at the Center for Higher Ambition, Shared Value Initiative, and elsewhere has demonstrated the potential to create financial and social value simultaneously. Organizations that adopt a higher purpose along with the drive for profits—from BD to Cisco to Herman Miller, to Microsoft, Nestle, and many lesser-known firms—are finding an advantage in the competition for talent, for strategic alliances, and community support.

You, your team, and your organization will face constant and formidable challenges in the VUCAST world. The days of detailed multi-year strategic plans and linear execution are fading fast. Should you have a game plan? Absolutely. Should you expect that it will remain unchanged for long? Absolutely not. Your true north as a leader should be clarity: of the larger purpose and the task at hand, of the enduring values that will guide you, and of the measures of success. Clarity and consistency of these elements can be a powerful counter to the roiling forces of VUCAST. However, amidst constant change, clarity requires that you embrace focus as a verb, not a noun. It is not about crafting the perfect mission statement and hanging it on the wall. You must constantly be attuned for distortion and anomalies, honing and refining your understanding of where you are and where you need—and want—to be next.

The opportunities will also be vast for the leaders smart, facile, and ARTful enough to navigate the complexities and rapid shifts ahead.

Post topics: Business