VUCA is the acronym for Volatility, Uncertainty, Complexity and Ambiguity. It describes the business environment which most organizations are facing in our hyper-connected world. One of the more frustrating aspects of VUCA is that traditional business models don’t work and in fact, may lead to debilitating effects. Over the coming months, we’ll be writing about emergent aspects of VUCA and outlining possible solutions.
Our first thought is on How to Approach VUCA
There is a tendency in the business literature for authors to try and break VUCA down into its four individual components and to develop a solution for each element. In these models, your approach varies depending on whether you are facing Complexity or Volatility for example. However, in our experience, this is not what is happening. All four conditions tend to occur at the same time, and if one is prevailing today, by tomorrow, another will emerge. So you need to think holistically, VUCA is one ecosystem, not separate entities.
We need to abandon one of our most cherished tenants of management, namely that for every issue there is an optimal solution. This means that if you dig deep enough, understand the problem in detail, you can formulate the best answer.
However, in our experience, under VUCA conditions, the situation is far too dynamic and the elements are too interconnected that by the time you think you understand the root cause, the situation has evolved. Instead, our advice is to step back and understand the big picture, try to map the interactions that are occurring within 2 to 3 levels of the problem before formulating a plan.
Eric Berlow, the Ecologist, says it well in his TED talk : “Simplicity often lies on the other side of Complexity”. This paradox summarizes one of the most important lessons from VUCA. Focus on the simple, practical solutions and use Pareto’s principle (solving to top 20% of your issues will resolve 80% of your problems) to guide you. We’ll spend more time in future blogs discussing simplification, suffice it to say here: Think Simple
Look to the borders
Given the scale and scope of the problems facing business leaders, the question is where do you start? In our experience, the solutions lie at the borders between the things you control, your organization’s ecosystem, and other ecosystems, such as your customers, your suppliers, your competitors, etc… Within your ecosystem, you will make continuous, incremental improvements. However, it is at the borders of your ecosystem where innovation will emerge. To thrive in VUCA environments, you need to innovate, so focus on the borders.
Doug Dean is the COO of Human Capital Group Asia