What is VUCA?
VUCA stands for volatility, uncertainty, complexity and ambiguity.
Let’s take a closer look and include some examples.
Volatility
Volatility is the quality of being subject to frequent, rapid and significant change.
In a volatile market, for example, the economy can rise or fall considerably in a short period of time, and the direction of a trend may reverse suddenly.
So what can managers do to relieve the tension in a volatile market?
- Become adaptive in decision-making
- Have clarity of vision, short and medium-term
- Communicate clearly to reduce confusion
- Determine your intent and resolve
Uncertainty
Uncertainty is a component of that situation, in which events and outcomes are unpredictable.
Businesses hate uncertainty, and when it’s the driving force behind the decisions you have to make, you need to find other ways to create certainty for your business.
What can managers do in an uncertain market?
- Flexibility to cope with doubt
- Build commitment and consensus of approach
- Develop new perspectives
- Create risk-management ideologies
Complexity
Complexity involves a multiplicity of issues and factors, some of which may be intricately interconnected.
Anything that increases complexity in an already-complex situation can cause confusion and fear among team members in your business.
The problems escalate when there is a complex environment business is working in.
What can managers do when complexity is the pattern that businesses face?
- Understand the links between cause and effect
- Simplify processes and procedures
- Recognise nothing is permanent
- Encourage development and generation of ideas
Ambiguity
Ambiguity is manifested in a lack of clarity and the difficulty of understanding exactly what the situation is.
When there’s more than one possible answer to a business problem, it needs quality leadership to drive the company forward, through conscious decision-making and objective setting.
What is expected of a manager during an ambiguous time?
- Communicate directly and with clarity
- Seek out and uncover alternative viewpoints
- Listen to divergent ideas and concepts
- Learn lessons that can apply in various circumstances
VUCA Examples
Volatile – The rise and fall of Blockbuster
Change is the only constant. What was the flavour of the month last year is this year’s rotten tomato!
Blockbuster is a prime example of this on two fronts. Once it ruled. Then came along Netflix.
Not only did Blockbuster have the opportunity of acquiring Netflix and turned it down but they also did not change their business model.
Who would have thought that within the short space of 5 years a household name like Blockbuster would go out of business.
You never know what is around the corner.
Uncertain – TUI didn’t see it coming!
There was TUI providing holiday makers with great holidays one day and then BANG, the Coronavirus pandemic took over and uncertainty took over.
Their share price dropped like a stone. Flights and holidays were cancelled and they failed to deal with the situation very well delaying requests for refunds.
No one could have predicted the impact of an unknown virus from China.
Complex – Rankings was “easier”
Back in the early 2000’s getting a high ranking in the search engines required some decent links pointing to your website and optimised keywords on your web pages.
Today there are hundreds of ranking factors ranging from on-page and off-page factors, speed and user intent. And all of this is gone via Google’s complex algorithms and formula.
Ambiguous – Be clear Boris!
During the Coronavirus pandemic UK Prime Minister Boris Johnson was under fire for his ambiguous messages around lockdown and social distancing.
His original message of STAY HOME – PROTECT THE NHS – SAVE LIVES was very clear.
When he moved to his STAY ALERT – CONTROL THE VIRUS – SAVE LIVES he came under fire because it lacked clarity and was vague.
Controlling a VUCA environment
By working to overcome the inevitable consequences of a VUCA environment, we bring into our control that which may have appeared uncontrollable.
It may be difficult under the circumstances we face, but by approaching it with confidence and assurance, you prove to your team that you and your company can make a real difference.
The first step in taming the VUCA world is to identify which of its component parts you are dealing with. Each has its own cause and effect and conversely each situation has its own solutions as well.
A useful resource on VUCA was written by Bob Johansen in 2009. His book, Leaders Make The Future includes the specific skills, behaviours and approaches that we need to live and control a VUCA environment.
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