Above the Fray: Leading well in chaos

There goes another monumental week in geopolitics and the dismantling of the social order. Many of the clients I work with and the senior executives I speak to are punched, drunk, trying to make sense for all, let alone come up with a workable strategy was to cope with it. And I’ve reflected on this, and it seems like we’re operating not just in complexity, but in chaos. So in today’s podcast, I thought I’d explore the characteristics of a chaotic system, see where we are in the unfolding of that chaos, so that we might try and find a way through and then I’d like to bring in the work of Neil Howe and try and make a bit of sense of what we’re experiencing in ways that have been particularly helpful to me. CHAOS tends to unfold from disruption through escalation to fragmentation and then disintegration, and these interconnected stages typically follow that pattern.

So I’ll explain each of them in turn, where we might be right now, and offer ways leaders might think about the leadership task at each stage, disruption begins with an unexpected event or disturbance that challenges established norms and routines and that creates uncertainty and anxiety, and we’re certainly seeing this play out geopolitically and domestically. In the geopolitical theatre, the issues that directly impact business relate to tariffs, trade wars, and the sheer energy it takes when you can no longer take for granted the taken for granted domestically, certainly in the UK, we’re looking at the intractability of no growth and the government’s ongoing attempts to get things moving again, even as others argue that continued growth isn’t an option, and the global order of the last 80 years has been upended. In the last seven weeks, a couple of people have said to me something to the effect of, when all of this is over, we’ll go back to dot, dot, dot. But I don’t think there’s any going back. Things will forever be changed. There may be a new normal that, in many ways, settles down, but I think that the genie is most definitely out of the bottle, and the ripples of this will be felt in ways that we can only imagine.

So from this disruption, next comes escalation, and this is where the confusion intensifies. As attempts to regain control or clarity falter, communication breaks down, and stress usually starts to increase. Here, emotions begin to run high, amplifying tension. And this is the point at which rhetoric increases and the path forward becomes less clear, not more clear. And one thing is for sure, the system that might have been stagnant is no longer stagnant. The escalation phase is characterised by intensing confusion, and it’s a critical phase between that initial disturbance and the deeper fragmentation or breakthrough. And you can recognise escalation by some clear signals we’re seeing that the uncertainty is amplified and people are starting to ask questions like what’s happening and who’s responsible? Decisions stall as uncertainty about the situations nature grows and it becomes hard to move one way or another for fear of what it might unintentionally unleash. Yet we need to keep moving forward, and so it’s typically a place of high anxiety. And communication here often breaks down because the information flows become erratic and they either flood people with conflicting messages or they leave. Critical gaps, and rumour and speculation fill these voids, and that worsens the communication. Rumour and speculation fill these voids, and that worsens the confusion. And all of this, of course, leads to increased emotional intensity, so the anger, frustration, anxiety and defensiveness become more visible. And as leaders, you’re likely to notice heightened emotional reactions in meetings and then informal interactions, and that is the kind of reactive behaviour that is characteristic of this stage.

Efforts to quickly regain control, often backfire, and they create further unintended consequences. People can become overly reactive, rushing into short term solutions that lack strategic foresight, and all of that represents a kind of narrowing of perspectives, where thinking becomes more rigid and defensive as stress grows, and that, of course, reduces openness and creativity. We can see people here revert to familiar but ineffective patterns rather than exploring new possibilities. Knowing you’re in escalation can help you respond consciously and create space for clearer thinking, slower reactions and re establishing effective communication. And I have gone into that in a bit of detail, because I think this is the stage we’re now in, and it lays the path for the stage to follow, which is fragmentation, and that’s where the uncertainty continues, and people may lose sight of common goals, retreat into silos or revert to self preservation. And it’s here that we can expect to see sudden and unexpected shocks, so typically triggered by events like an economic crisis, a political instability, technological disruptions, and organisations who have limited or no control over these events, this intensifies their vulnerability and anxiety. And so we’re starting to see in that kind of phase, rapidly changing conditions, that external chaos creates uncertainty by continually shifting the rules or conditions. Leaders struggle with insufficient or conflicting information as the conditions evolve faster than decision making processes can manage. So it’s here too that there are systemic and far reaching impacts as the effects start to ripple across multiple sectors, markets or geographies, magnifying complexity and then ambiguity. And it’s here that we can see then some of our stakeholders becoming reactive or volatile, and so the trust and credibility becomes harder to maintain.

All of this increases the demand for sense, making leaders and teams becoming overwhelmed trying to interpret conflicting signals in the environment, even as they need to do more of that. So this all doesn’t sound like a walk in the park, does it? But even more alarming is that it often moves into what’s called either disintegration or breakthrough. So at some point, there’s a critical tipping point, and chaos can either lead to collapse, which is the disintegration side of it, or to innovation and a positive adaptation, which is the breakthrough side and this stage determines whether we emerge stronger or more fragmented. And it’s here that I want to bring in an idea that has been supremely helpful to me of late. And it’s an idea of the fourth turning 1977 Neil Howe outlined a cyclical theory of history, suggesting that n unfolds through repeating 80 to 100 year cycles, what he describes as a long human life. And he calls that a sacculum. And he says that this sacculum, which is 80 to 100 years, is divided into four distinct phases, or turnings. The first turning is the kind of post crisis area that’s characterised by strong institutions and collective optimism. And then that gives way to the second turning, kind of 20 to 25 years later, which is a period of sort of spiritual upheaval and questioning of established norms. So if you think of the first turning in this circumlu, then the strong institutions and collective optimism are the time post the Second World War. Further, think of the spiritual upheaval of the second turning being the 1960s and Woodstock and the hippie movement. And then the third turning is called unravelling, and that’s marked by weakened institutions and heightened individualism. And so we start to see that these things begin to lay the foundations for what comes next in the fourth turning, which how describes as the crisis. And this is a time of significant upheaval, which often involves wars or revolutions, and it leads then to reconstruction of societal structures. And then, of course, that gives way to the first turning again.

And so Howe wrote the fourth turning in 1997 and returned to it with a book just last year called the fourth turning is here to explain that that’s the phase that we’re in now. When I read his thesis, I was and I guess I’d still slightly am quite sceptical that complex systems can have this level of predictability. But he does make a very compelling case for how this has unfolded over the last 500 years. And if we’re to believe, even if we don’t and just apply what we know to kind of how chaos unfolds, then it is clear to see that we are in that phase, or we’re coming to that phase of disintegration. We are coming into the fourth turning, and ironically, knowing this has had different impacts and different people. So to a colleague of mine, it was deeply and existentially unsettling. But for me, when I read this, there was a kind of it brought a bit of peacefulness to me.

It was like the expression that it’s the hope that kills you, and I guess it gave me permission not to be so hopeful about the kind of immediate future and about a return to something that we’ve had about a kind of easy optimism that the status quo might return by the summer, and paradoxically, that’s allowed me to become more optimistic that beyond the fourth turning, beyond the disintegration, that there might be a rebirth, and that if we can find a way to look not just at where we are, but what might be beyond it, if we’re thoughtful and diligent about the world that we want beyond it, then we may have the chance to create a better world, even as we go through the disruption that we are clearly going through. And that helps me and our work as leaders, then all of us is simply then to do the next right thing and the next right thing, and I guess to do it together, in relationship with each other and towards a purpose that’s meaningful. I guess if you can have that, then there is a way through.