What are the characteristics of the VUCA world, including the current sanitary crisis ?
VUCA is an acronym – first used in 1987, drawing on the leadership theories of Warren Bennis and Burt Nanus – to describe or to reflect on the volatility, uncertainty, complexity and ambiguity of general conditions and situations.
Here are some artefacts of the VUCA world in the business world :
We entered the 4th industrial revolution
Driven by digital transformation, IoT, AI, Big Data and cyber-physical systems
Inducing rapid disruption of traditional business models & emergence of completely new business models and opportunities
The same applies to management models (i.e. agile, flat hierarchies, self-organising teams..etc)
Product and innovation life cycles get shorter
At the same time customers have higher expectations for personalized solutions
Consequences: shorter half-time of human skills in general & higher importance of soft-skills
Also, shorter innovation & product cycles
Our “adaptability quotient” (AQ) will soon become the primary predictor of success
And shortage for talents and challenge to retain and engage talents, millennials etc all looking for a higher purpose in their work and life.
At the same time, longer term contextual shifts accelerate as well:
Political outcomes are becoming more unpredictable and disruptive
International institutions are becoming less stable
Social inequality continues to rise within and between nations (populism, migratory movements, racism)
Ecological risks & threats rise exponentially
Shifting generational values are reshaping the nature of consumption
Social backlash to business is occurring more frequently and on a larger scale
Technology is changing the skills that are required of workers as well the nature of work itself
Black swans (like the 2008 financial crisis) and green swans (like the current pandemic) happen in much shorter cycles
Without pretending to be exhaustive, these non-competitive issues are becoming both less predictable and more relevant to long-run company performance, demanding correspondingly more attention.
The learning is that the VUCA world is real, and pushes us undeniably into more agile, flexible and adaptive governance models to be able to deal with exponential transformation that surrounds us everywhere, in business and beyond.
This also means that market conditions for firms are undergoing lasting changes, further emphasized by the sanitary crisis (“Low Touch Economy”) with new customer behaviours and compliance rules, and that companies that really want to generate value in the future while being productive and more resilient need to completely adapt their way of doing to these new realities:
more innovation capacities
more servant leadership
pivoting their business models
more collaboration across boundaries
practicing scalable and agile learning
to name just a few...etc
On top of that and more specifically, the effects of the sanitary crisis will also differ from industry to industry:
hospitality, tourism & travel
transport & mobility
retail & consumer products
health & life sciences
It is therefore imperative to develop the skills and knowledge necessary to navigate in these transformative times and become more 'future literate'.
And here is an excerpt of the Wikipedia definition of ‘VUCA’:
VUCA is an acronym – first used in 1987, drawing on the leadership theories of Warren Bennis and Burt Nanus – to describe or to reflect on the volatility, uncertainty, complexity and ambiguity of general conditions and situations. The U.S. Army War College introduced the concept of VUCA to describe the more volatile, uncertain, complex and ambiguous multilateral world perceived as resulting from the end of the Cold War. More frequent use and discussion of the term “VUCA” began from 2002 and derives from this acronym from military education.
It has subsequently taken root in emerging ideas in strategic leadership that apply in a wide range of organizations, from for-profit corporations to education. …….
V = Volatility: the nature and dynamics of change, and the nature and speed of change forces and change catalysts.
U = Uncertainty: the lack of predictability, the prospects for surprise, and the sense of awareness and understanding of issues and events.
C = Complexity: the multiplex of forces, the confounding of issues, no cause-and-effect chain and confusion that surrounds organization.
A = Ambiguity: the haziness of reality, the potential for misreads, and the mixed meanings of conditions; cause-and-effect confusion.
These elements present the context in which organizations view their current and future state. They present boundaries for planning and policy management. They come together in ways that either confound decisions or sharpen the capacity to look ahead, plan ahead and move ahead. VUCA sets the stage for managing and leading.
The particular meaning and relevance of VUCA often relates to how people view the conditions under which they make decisions, plan forward, manage opportunities, foster change and solve problems. In general, the premises of VUCA tend to shape an organization's capacity to:
Anticipate the Issues that Shape
Understand the Consequences of Issues and Actions
Appreciate the Interdependence of Variables
Prepare for Alternative Realities and Challenges
Interpret and Address Relevant Opportunities
For most contemporary organizations – business, the military, education, government and others – VUCA is a practical code for awareness and readiness. Beyond the simple acronym is a body of knowledge that deals with learning models for VUCA preparedness, anticipation, evolution and intervention.