There are many responsibilities we ask our leaders to take on:  setting the vision, making decisions, managing stakeholder relationships, and igniting our own motivation.  Often underappreciated, however, is the role leaders can and should play in interpreting and understanding the world, particularly when faced with change.  Is that 3% increase in revenues good or bad?  Are we threatened or energized by our rival’s new product launch?  Should we feel concerned that digital is changing the landscape of our industry or confident that we’re out ahead of the challenge?

Accurately interpreting changes and challenges to our organizations is more important now than it’s ever been.  Since the 1990s, we have recognized that the world is increasingly “VUCA.”  VUCA is a military acronym which describes our current situation as volatile, uncertain, complex, and ambiguous.  It reminds us that not only is the world changing, it is changing quickly, unexpectedly, and along many dimensions.  This increasing rate of change demands that leaders interpret – and reinterpret – the company’s situation far more frequently than was previously the case.  Particularly in changing situations, effective leaders pair the ability to continuously create and deepen meaning with the ability to push towards right action.  As a result, we see both the situation and ourselves more clearly and are more likely to take appropriate, committed action towards our collective goals.

How is meaning created
There are four broad steps in the process of meaning-making within leadership.  We begin with the facts of the situation, layer on an interpretation of those facts, understand the implications for us individually and collectively, and then emerge to take action based on this deeper understanding.

Situation  When faced with change, we first ask:  “What’s happening?”  The answer may seem straight-forward:  margins expanded two points, we are about to start a cost-cutting exercise, or the headcount reduction will affect 5% of the workforce.  Of all aspects of meaning-making, the situation is most closely grounded in facts.  That said, the situation often only reflects a selection of relevant facts, rather than everything which is true in the organization.

Interpretation  Moving down the U to interpretation, we start to question “What does it mean?”  This generally begins with a broad assessment of the overall ‘goodness’ or ‘badness’ of the situation.  Should we be happy or upset about this change?  Great leaders give a more nuanced interpretation of the situation, including the valence of the emotion (e.g., ‘very good’, ‘somewhat bad’) and the details behind it.  While we often consider our interpretations to be objectively true in the world, leaders know that interpretation is malleable.  Revenues up 3% can be exceptional and beyond expectations, deeply disappointing and requiring serious action, or innumerable other options given the context and ambitions of an organization.  Effective leaders guide followers through this interpretation, helping them to understand the right way to think about the new information.

Implication  A clear view of the situation and interpretation brings us to the question of implications.  The fundamental question of implication is “Who are we?”  This piece of the U is often tied up in deep questions of identity.  Followers ask:  “If our performance is not good enough, what does that say about us?  And what does that say about me?”  This is where an individual’s stake in the situation enters the conversation as followers consider both “Who are we collectively?” and “Who am I in this situation?”  Frequent answers come in the form of “We’re the type of company that. . .” or “I’m the type of person who. . .”  These questions draw on the cornerstones of individual and corporate identity for their answers:  What do we value?  What are our beliefs?  And what are our fears?  Leaders know that elegantly taking the conversation to this level has the potential to connect listeners with the purpose, mission, vision, and values which fire right action and increase individual commitment to the collective.

Action  Finally, we emerge to ask “What’s next?”  Note that the action here can result in either a state of being (“here’s how we want to be in the midst of this”) or an act of doing (“here’s what I want you do to next”).  Either way, it’s a call to action for the followers.  A good leader will ensure that this action builds off everything that comes before – the situation, its interpretation, and its implications.  Beyond this, a great leader will also relate this particular set of actions to a continuous thread, articulating how the answer to ‘what’s next’ ties to ‘what we were doing before’ and ‘where we’re headed.’  The situation – and any change required in reaction to it – is seen in the broader narrative of the organization.

 

How this is different 
In a quickly changing world, we have become accustomed to move quickly between the situation and our resultant action.  When faced with a situation, our instinct is often to fix it or change it.  We skip from “What’s going on?” to “What’s next?,” focusing on movement at the expense of meaning.  Unfortunately, confining ourselves to the realm of movement is increasingly limiting.  Moving from the situation directly to action misses the opportunity – and necessity – to create resonance with stakeholders.  It ignores the emotional and existential questions that emerge within an organization, preferring to keep things at the level of ‘all business.’  While this may seem ‘cleaner’ in some ways, it demonstrates either an ignorance of or willful ignoring of truth.  Followers will – and indeed they must – find interpretations and implications for events, whether guided by leaders or found independently.  Leaders who are willing to go there with their followers, instead of leaving them to take this journey alone, build commitment and resonance in the organization.  By moving thoughtfully into the realm of meaning, they choose grounded action instead of immediate reaction.

How to apply this approach
As with all frameworks, there are some things this approach helps us see and some things it obscures.  It is not right to apply this framework in all situations; indeed, it is not always appropriate or necessary.  Instead, what is important is that leaders are ‘at choice’ with their approach.  Is the situation complex, uncertain, or particularly important?  Does it call for a connection to meaning?  Straight-forward or routine situations are not helped – and indeed may be hindered – by this level of processing.  But the more ambiguous the situation or the more sizable the impact, the more important it is to lead one’s colleagues through this process of adjusting their understanding of the world.  The goal is that we, as leaders, choose our communication style in each case.

Doing this well takes great capability in a leader.  It is hard and sometimes uncomfortable work.  First, it requires immense self-knowledge and maturity on the part of the leader to walk through the U process independently.  She must understand the breadth of interpretations and the depth of implications before communicating these to others.  As such, this work cannot be done by communications specialists or speechwriters; to be authentic and effective, the leader must walk the path herself.  Second, meaning-making requires a capacity to communicate this same journey to others and to hold the space for the organization to follow through the realms of meaning and out the other side.

When practiced iteratively in response to various situations, effective meaning-making co-creates the story of an organization in response to the challenges it faces along the way.  The leader weaves the story of not only what we’re doing and where we’re going, but also the story of who we are and why this work is important.  By reinterpreting and renegotiating our identity as protagonists in the organization’s story, the followers also see more clearly their role in the hero’s journey and their contribution to the success of the organization’s mission.

Meredith

Questions for reflection

• When do you take time to create meaning?  When are you inclined to move straight to action?
• Where are you uncertain about your own situation?  Where are you in need of deeper connection to meaning?
• Where might your followers or teammates benefit from clearer interpretation and understanding the personal implications of a situation?