Essentially describing the nature of difficult conditions and situations, VUCA is an acronym that originated in the 1990’s in the military world of the American military. It then basically described the conditions the world faced after the cold war. In the contemporary times, Brexit, the Coronavirus pandemic and the global economy are all examples of VUCA conditions that we all are finding ourselves facing today.
About VUCA
The acronym VUCA stands for volatility, uncertainty, complexity and ambiguity.
Now, let us take a closer look and see how managers can successfully deal with a VUCA environment.
Volatility
Volatility relates to the quality of being subject to frequent, rapid and significant change.
To quote an example, in a volatile market, the economy can rise or fall considerably in a short period of time, and the direction of a trend may reverse suddenly.
In order to relieve the tension in a volatile market, managers can:
· become adaptive in decision-making;
· have clarity of vision, short and medium-term;
· communicate clearly to reduce confusion;
· determine the organization/business intent and resolve.
Uncertainty
Uncertainty relates to a situation in which events and outcomes are unpredictable.
Normally, businesses hate uncertainty. However, when it becomes the driving force behind the decisions one has to make, they need to find other ways to create certainty for their business.
In order to counter an uncertain market, managers can:
· bank on flexibility to cope with doubt;
· build commitment and consensus of approach;
· develop new perspectives;
· can create risk-management ideologies.
Complexity
Complexity relates to a multiplicity of issues and factors, some of which may be intricately interconnected.
As is common knowledge, anything that increases complexity in an already-complex situation can cause confusion and fear among team members in a business. And, the problems escalate when there is a complex environment business is working in.
In order to simplify things when complexity is the pattern that businesses face, managers can:
· understand the links between cause and effect;
· simplify processes and procedures;
· recognize nothing is permanent;
· encourage development and generation of new ideas.
Ambiguity
Ambiguity relates to a condition marked by a lack of clarity and the difficulty of understanding exactly what the situation is.
In such a situation when there is more than one possible answer to a business problem, it actually needs quality leadership to drive the company forward, through conscious decision-making and objective setting.
In order to deal with an ambiguous time, managers can:
· 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.
Some VUCA Examples
Volatile – The rise and fall of Blockbuster
It is said that “change is the only constant” and “what was the flavor of the month last year may become this year’s rotten tomato!”
To quote an example, Blockbuster is the best instance of this on two fronts. Once upon a time, it ruled. And then, it was overtaken by Netflix.
What happened was that, 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.
Thus 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.
It only proves that you can never know what is around the corner for you in situations of volatility!
Uncertain – TUI didn’t see it coming!
To quote a VUCA uncertain example, we may refer to the case of TUI that was providing holiday makers with great holidays one day and then suddenly the Coronavirus pandemic took over and, with it, an uncertainty gripped the tourism sector.
The share price of TUI dropped drastically and their flights and holidays were cancelled and they also failed to deal with the situation very well delaying requests for refunds.
Who could have predicted this impact of an unknown virus from China on their business!
Complex – Rankings was “easier”
If we take a look at a VUCA complex example – we can say that 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.
Today, however, there are hundreds of ranking factors ranging from on-page and off-page factors, speed and user intent – all of which is governed via Google’s complex algorithms and formula!
Ambiguous – Be clear Boris!
Coming on to a VUCA example on ambiguous, we may remember that during the Coronavirus pandemic, UK Prime Minister Boris Johnson was under fire for his ambiguous messages around lockdown and social distancing.
Whereas his original message of “STAY HOME – PROTECT THE NHS – SAVE LIVES” was absolutely clear – when he moved to his “STAY ALERT – CONTROL THE VIRUS – SAVE LIVES”, he came under tremendous criticism since it lacked clarity and was completely vague.
Conclusion
To summarize, it may 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. At times, it may appear difficult under the circumstances that 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. The ground reality is that, the first step in mastering the VUCA world is to identify which of its component parts you are dealing with. Every one of them have their own cause and effect and conversely each situation has its own solutions as well.
It will not be out of place to make a mention here of a useful resource on VUCA that was written by Bob Johansen in 2009. His book, ‘Leaders Make The Future’ spells-out the specific skills, behaviors and approaches that we all need to live and control a VUCA environment.
Basically, Johansen said that we all need to:
· Counter Volatility with Vision
· Meet Uncertainty with Understanding
· React to Complexity with Clarity
· Fight Ambiguity with Agility
Given the fact that the VUCA environment is 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. If we talk of India, top B-schools like Asian Business School (ABS), Noida have not only modernized their main course content to suit to the demands of the VUCA world but have also reinforced their students’ capabilities by boosting their skills and learning. For example, Asian Business School 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 from CSD, that enhances the value of the degree and makes its students thoroughly competent to handle with great success the management of business in this fast unfolding VUCA world in this post-COVID era.
