The World is Going to VUCA

Anyone remember VUCA?  It’s an acronym that stands for Volatility, Uncertainty, Complexity and Ambiguity.   

I’ve used VUCA as a strategic planning tool when trying to understand what was going on around me and so increase the chances of coming to an optimal course of action.   

As a concept, it was first described by the leadership guru Warren Bennis in 1985, but really came to prominence when it was adopted by the military community in the early 1990s to try to make sense of the new world order that was emerging from the collapse of the Soviet Union. 

On the surface it seems such a simple tool, but it is loaded with possibility and subtleties.   I remember struggling to get my head around it; it seems many others had the same difficulty because for a time, people just used the term VUCA as a collective to describe something complex or gnarly - like the world at the moment. 

However, once you look at it as a 2 x 2 matrix and define the 2 axes, the model suddenly makes a lot more sense.  And, in view of the incessant stream of world scale events that are happening just now, it may be time again to start including VUCA in your corporate strategic thinking and planning. 

So, here's my simplified version of it courtesy of a 2 x 2 matrix.

The horizontal axis represents how well you know what is actually happening - Status.    This axis is all about asking yourself: " do I fully understand the problem" - and is important before you try coming up with a solution. 

The vertical axis represents how well you understand the nature of the system and so can predict what is likely to happen next. This axis is all about asking yourself: "do I know enough about the context, the world or the system so that I can derive a solution that has a high chance of turning out as I'd want it to". 

Looking at each of the boxes in turn:

• Low-Low - Ambiguity.   Here, there is so much you just don't know - you may not even know what you don't know.    Either tread very carefully or hire in expertise.  An example of this could be launching a new product into a completely new and different market.
  
• High-High - Volatility.  Things around you are moving, but you can quickly ascertain what is going on; it's probably within your experience and you can quickly implement contingencies.  A key supplier may go offline – you can easily recognise that and find an alternative supplier.
  
• Complexity - Low status knowledge, but once you can work out what is going on, you'll know what to do.  Maybe several things, that individually you can take in your stride, are all happening together.  This has the potential to overwhelm, but with prioritisation can be resolved.   The Apollo 13 moment when 20 status lights suddenly started flashing all at once. 

• Uncertainty - You can quickly understand what is happening, but maybe beyond your expertise or experience to work out next steps

 VUCA does not give you the answer; it is a tool to help you plot a best course of action in a strange new world. 

 If you feel like your world is going to VUCA, call me. 

Bye for now 

Graham