VUCA is basically an acronym which characterizes the nature of difficult conditions and situations.
Originating in the 1990’s in the military world of the American military, it originally described the conditions the world faced after the cold war.
Brexit, the Coronavirus pandemic and the global economy are all VUCA conditions that we all are finding ourselves facing today.
What is VUCA?
The acronym VUCA refers to volatility, uncertainty, complexity, and ambiguity.
Let us take a closer look and include some examples.
Volatility is broadly the quality of being subject to frequent, rapid, and significant change.
In a volatile market, for instance, the economy can rise or fall considerably in a short period of time, and the direction of a trend may reverse suddenly.
So, what is that managers can do to relieve the tension in a volatile market?
- They can become adaptive in decision-making
- They can have clarity of vision, short and medium-term
- They can communicate clearly to reduce confusion
- They can determine the organization/business intent and resolve
Uncertainty is broadly a component of that situation in which events and outcomes are unpredictable.
As a matter of fact, businesses hate uncertainty; but, when it is the driving force behind the decisions one has to make, they need to find other ways to create certainty for their business.
What is that managers can do in an uncertain market?
- They can bank on flexibility to cope with doubt
- They can build commitment and consensus of approach
- They can develop new perspectives
- They can create risk-management ideologies
Complexity basically involves a multiplicity of issues and factors, some of which may be intricately interconnected.
In reality, anything that increases complexity in an already-complex situation can cause confusion and fear among team members in a business.
Again, the problems escalate when there is a complex environment business is working in.
What is that managers can do when complexity is the pattern that businesses face?
- They can understand the links between cause and effect
- They can simplify processes and procedures
- They can recognize nothing is permanent
- They can encourage the development and generation of ideas
Ambiguity generally is exhibited by a lack of clarity and the difficulty of understanding exactly what the situation is.
In a situation when there is more then 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 that is expected of a manager during an ambiguous time?
- They can communicate directly and with clarity
- They can seek out and uncover alternative viewpoints
- They can listen to divergent ideas and concepts
- They can learn lessons that can apply in various circumstances
Volatile – The rise and fall of Blockbuster
(VUCA volatile example)
Change is the only constant. What was the flavor of the month last year may become this year’s rotten tomato!
Blockbuster is the best example of this on two fronts – once it ruled, and 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 at all.
So it was that no one would have thought that within the short space of 5 years, a household name like Blockbuster would go out of business.
Hence, you never know what is around the corner for you in situations of volatility!
Uncertain – TUI didn’t see it coming!
(VUCA uncertain example)
As a VUCA uncertain example, we can cite the case of TUI that was providing holidaymakers with great holidays one day, and then BANG … the Coronavirus pandemic took over and, with it, an uncertainty took over.
The share price of TUI dropped like a stone. Their flights and holidays were canceled and they failed to deal with the situation very well delaying requests for refunds.
No one could have predicted this impact of an unknown virus from China on their business!
Complex – Rankings was “easier”
To talk of a VUCA complex example – back in the early 2000’s, getting a high ranking in the search engines required some decent links pointing to one’s website and optimized keywords on their web pages.
But today, there are hundreds of ranking factors ranging from on-page and off-page factors, speed, and user intent. And all of this is governed via Google’s complex algorithms and formula.
Ambiguous – Be clear Boris!
(VUCA example ambiguous)
As one may know, 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 absolutely clear.
However, 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
In conclusion, it can be said that by working to overcome the inevitable consequences of a VUCA environment, we bring into our control that which may have appeared uncontrollable.
It may perhaps be difficult under the circumstances we face, but by approaching it with confidence and assurance, one can prove to their team that they and their company can make a real difference.
In actuality, the first step in mastering the VUCA world is to identify which of its component parts you are dealing with. Each and every one has its own cause and effect and conversely, each situation has its own solutions as well.
Here, it may be mentioned that a useful resource on VUCA was written by Bob Johansen in 2009. His book, ‘Leaders Make The Future’ elucidates the specific skills, behaviors, and approaches that we all need to live and control a VUCA environment.
Johansen basically said that we all need to:
- Counter Volatility with Vision
- Meet Uncertainty with Understanding
- React to Complexity with Clarity
- Fight Ambiguity with Agility
In view of the VUCA environment fast becoming the new normal worldwide, top management colleges around the globe have started focusing on the subject and have re-oriented their programmes and syllabuses to counter this emergent new situation and appropriately train their students to come out as winners. In India too, top B-schools like Asian Business School (ABS), Noida have not only streamlined their main course content to cater to the demands of the VUCA world but have also bolstered their students’ capabilities by enhancing their skills and learning. Asian Business School, for instance, in addition to its regular flagship ABS PGDM programme, offers 7 additional diplomas/certifications in International Business from Oxford Business College, Oxford-London (U.K.), in Digital Marketing from NIIT, in Data Analytics & Business Intelligence from NIIT, in Media & Entertainment from Asian Academy of Film & TV, in Entrepreneurship from EDIC, in Business Gaming from AIMA BizLab and in Corporate Communication that enhances the value of the degree and makes its students thoroughly competent to handle with flair the management of business in this VUCA world.