“Change is the only constant”. Heraclitus was said to be the first to have uttered this. This is still valid: Digital revolution. Industry 4.0. Rapid changes in the marketplace. Competition coming from unexpected areas. The speed of change is faster and the changes broader than ever; affecting more people on the planet at the same time. Changes – whether predictable or not– are inevitable.
Some strategic leaders navigating under these tough circumstances call it a VUCA environment; a business world characterized by Volatility, Uncertainty, Complexity and Ambiguity.
When the world became a VUCA world
The VUCA as an acronym and concept was introduced by US militaries to describe the world at the end of the cold war.
The business world adopted the term in the 90’s, as relevant to leadership development. By then, the business environment was described as VUCA and was considered a “new normal”.
After the financial crisis 2008-2009 – a truly chaotic era – consultants started encouraging leaders to develop new capabilities and build new critical skills to be able to cope with this VUCA world: such as flexibility, agility and rapidity in decision-making.
The V in VUCA represents Volatility. This instability is driven by turbulent factors such as digitalization, connectivity, global competition. Change is fast and frequent.
The U signifies Uncertainty. Today, changes are hard to predict. It is hard to rely on past experiences when facing new challenges.
The C stands for complexity. Nowadays, reasons and causes for change and events are harder to understand. Problems are getting increasingly complex; many factors are involved.
The A equals the ambiguity in VUCA. There is a lack of clarity around the circumstances of an event. Things have become hazier. People get confused about cause and effect: “the who, what, why, where and how behind causes”.
How it influences leaders
This Volatile, Uncertain, Complex and Ambiguous environment business leaders operate in today, makes it hard to forecast, plan, steer, make decisions, operate. To look ahead, plan ahead and move ahead, leaders need to be faster, more agile, more flexible, more open, see the big picture and be able to connect the dots.
The Antidote: Meeting VUCA with VUCA
One way of meeting the VUCA challenge (as expressed by Bob Johansen, Leaders Make the Future: Ten New Leadership Skills for an Uncertain World) is using the “VUCA prime”, meeting VUCA with VUCA:
Overcoming Volatility with a clear Vision
Johansen suggests that leaders deal with volatility by creating a strong vision. A vision that they clearly communicate – and always stick to – when facing constant challenges and while striving to make good business decisions.
Disabling Uncertainty with Understanding
Understanding, according to Johansen, is crucial when facing uncertainty. He recommends leaders to go way beyond their own areas of expertise. Also; they should prove that they are good at collaborating across borders and levels, work to break down silos and strongly communicate at all levels.
Spiking complexity with clarity
To cope with complexity – still be able to make decisions in a difficult world – seeing the big picture and connecting the dots is key. To handle this complexity, Johansen underlines the constant search for clarity; a deliberate process of trying to make sense of information.
Beating Ambiguity with Agility
When dealing with ambiguity Johansen stresses the importance of being agile, rapid, flexible and curious. Quickly respond to information, make decisions fast, apply solutions rapidly. This also includes communicating swiftly across the organization.
Volatility – > Vision
Uncertainty – > Understanding
Complexity – > Clarity
Ambiguity – > Agility
Skills and capabilities to build
To navigate more easily in a VUCA business world; leaders could practice:
• Agility on the job
• Complex thinking
…and engage in:
• Creating a vision – and sticking to it
• Managing change
• Working collaboratively
• Seeing the big picture and connecting the dots
• Communicating across levels, functions, borders
• Quick and regular learning
Challenges for leaders are many. But, accepting that they’re operating in a VUCA world already helps going forward.
Whitepaper: Developing Leaders in a VUCA Environment.
Bob Johansen, Leaders Make the Future: Ten New Leadership Skills for an Uncertain World) is using the “VUCA prime”, meeting VUCA with VUCA: