An Enterprise performance is an outcome of a correct assessment of business variables and Leadership behaviors for positive results. VUCA stands for Volatility, Uncertainty, Complexity & Ambiguity. VUCA is now the new norm and thus at the outset let us first discuss the business meaning of each of these nouns. It will be a big mistake to theorize the four as a singular phenomenon; they are four interdependent phenomena.
Business Volatility: It is the liability of the variables to change rapidly and unpredictably especially for the worse. This is characterized by instability and of unknown duration.
Business Uncertainty: A situation where the current state of knowledge of variables is such that the order or nature of variables is unknown, consequences are unpredictable and credible probabilities cannot be assigned. Change and innovation are possible, but the outcome is not a ‘given.”
Business Complexity: A state of having many parts to variables and being difficult to understand or find an answer to. Here the variables carry numerous interconnections. Continual study of each is thus of utmost importance.
Business Ambiguity: A quality of being open to more than one interpretation or inexactness. The causal relationships are unclear. There is a lot more than meets the eye.
So the characteristic of the “VUCA World” will be that of accelerated unpredictability with increasingly fast-paced obsolescence and a perpetual struggle for remaining relevant in business while eco-system will be in a state of constant turbulence. The cause and effect correlation shall become increasingly non-establishable.
VUCA does not mean that all eternal competencies will evaporate. VUCA will remain controllable through some eternal wisdom for sure with a lot more relevance. “Knowledge will be Power.” The process of Creation, Sustenance, and Destruction will operate concurrently and at a fast pace. Cash will be “king” as cash burnouts will result more frequently.
The hypothesis thus is that traditional decision making in the realm of VUCA shall mostly be flawed or will result in partial positive outcomes at the most. The pertinent question then arises how should Leaders then steer organizations to success? Wisdom lies in understanding the new norms and then modifying behaviors to succeed in this new state of reality. As an Entrepreneur and a Leadership Coach, I have the good fortune of assessing this 360-degree perspective 24/7 through technology-enabled dashboards.
VUCA presents an excellent opportunity for the process of perpetual change and innovation. Organizations therefore now need to reinvent themselves or perish consistently. Let us thus discuss VUCA in the light of Business Success creation.
Dealing with Volatility: The Eco-system that we build or we operate in will experience the stress of rapid obsolescence. This is concerning people, processes, products & services, partnerships amongst other variables like technology, markets, social behaviors, compliances, etc. This will require a consistent study of variables through Analytics to measure relevance in shorter intervals of time spans. It will also need a highly adaptive and agile business model. Organizations will have to Innovate to be ready to deal with exigencies continually. All options will have to be prepared and deployable. Innovation through Analytics is key.
Dealing with Uncertainty: The Eternal Truth of “What We Study Will Grow” was never so evident than now. A group of analysts who with a job design to only study business variables will be essential in Enterprises. Business Intelligence frameworks will now need to be robust and part and parcel of an organization’s functioning. The past is no longer a predictor of the future anymore. Analysts will be an essential category and will rule the roost. Invest in information to create success.
Dealing with Complexity: Fail early fail cheap is the new Mantra. Design Thinking is the unique competence of Innovation that would need to be deployed. Early idea prototypes that will require hypothesis testing before scale-up will be essential. “Thinking Big” will be suicidal. It will be all about implementing small ideas and scale-up prototypes gradually. That is the Design Thinking Principle. Go for the low hanging fruits in the time of VUCA. Big ideas will not see the light of the day and failures will create financial disasters and rapid cash burns. Focus and reward fast & easy implementable ideas. Specialists and Innovators would need to co-create. Unicorn companies will be built on the Principles of Design Thinking.
Dealing with Ambiguity: Use social media extensively to test ideas and variables through polls. The Internet will play a key role in providing profound insights into the character of business variables. IoT will provide the data while LinkedIn, Facebook, Twitter, etc. will give you fast analytics and unstructured data. Social media & IoT is the new study ground of behaviors of the variable. Bring the unstructured web data into a structure through analytic tools and build short-term causal relationships to predict business outcomes.
Thus Analytics, Design Thinking, Techno-Savvy Socially Intelligent professionals will succeed in the world of VUCA. Organizations will have to redesign their competency frameworks and modify Leadership behaviors to do well in the times of VUCA. If you are continually vulnerable to business noise; get moving fast to become VUCA-Ready.
The key question of the day is; are you ready for the new reality of VUCA?