Is Your World a VUCA World?

Posted on November 5, 2017 by Phil Elworth


I was recently introduced to an acronym that describes what owning a business may mean for many in this period of history.  The acronym is VUCA.  It stands for Volatile, Uncertain, Complex and Ambiguous.  Think it may fit?

The term VUCA was originally coined by the U.S. Army War College in the early 1990’s to describe what the world would be like after the Soviet Union’s collapse.  Looks to me like it was spot on, but how does this apply to business?

Let’s start by defining the terms:

Volatile:  A situation that is liable to change rapidly and unpredictably, especially for the worse.  So, what do you see coming in your industry?  With your key customers?  Technology?  Do you see smooth sailing or change coming?

Uncertain:  Something that is unknown or unable to be relied on.  How secure is your revenue source?  Will your key employees stay?  What is coming that will rock your industry? Or do you know exactly what is going to happen?

Complex:  Something that is composed of many interconnected parts or compounds that is complicated or involved.  So much in business today is interconnected.  Rarely does a business have “control” over all parts of its operation things like hurricanes, strikes, regulation or the changing needs of your customers all creates a complicated matrix that is your business.  Ask any business owner from Houston what this means to them?

Ambiguous:  Open to having several possible meanings or interpretations and often of a doubtful or uncertain nature.  How often have you left a meeting only to hear later that the other party had a totally opposite interpretation of what went on?  Has this ever happened with a customer order, or a supply specification?  Is your business really clear cut or is it open for interpretation?

Does this describe your business or your customers?  Leading in a VUCA world will take different competencies that are tailored to this world. Competencies that you may not have given much thought to in the past.  In order to grow your business and ultimately transition your business you need to develop these competencies not only for yourself but also the key employees around you because as the leader you need to point the way forward.  The clearer you can be about the direction you are going, the clearer will be the common purpose which brings everyone into alignment.

In the area of volatility you will need to be resilient and adaptable since you cannot control the change.   You will need high levels of business insight in order to make the high-quality decisions necessary to stay on track.  Do you have the key team or advisors around you to help make this happen?

If something is uncertain then you need to be a nimble learner to quickly adapt to a changing landscape.  As a leader, you need to be decisive.  You need to obtain all the facts you can then make your decision confidently to move forward.  Uncertainly means that you will win some and lose some but your key employees need to follow a decisive leader.  It is said that any battle plan does not survive the first hour of combat which is why you need to be aware of the changing landscape and be willing to change direction as needed.

Complexity is a part of daily life but as a business owner the complexity of the business rests on your shoulders; but you should not be doing this alone.  You need a team around you.   Do you have a leadership team in place for your company?  Do you have an advisory board to help you navigate changing waters?  Are you creating an environment that drives engagement, where all employees are motivated to do their best for the organization?  Do you have the financial acumen around your table to monitor how you are doing and plan the way forward?  Complexity will always be with us but it is important for you not carry it alone.

Ambiguous shows us that the way forward is often unclear.  What if we get this big order, what if we don’t?  Having someone around your leadership table with a strategic mindset helps you to look into the future, see the possibilities and translate them into clear strategies.  Do you have a clear Vision and Purpose for your organization?  Are all your crew members rowing the same direction or as I have written in a separate article are they all trying to go different directions.  Clarity of purpose in an ambiguous environment will go a long way to you as the owner achieving the goals you have for the organization.

The beauty of the competencies noted above is that they can all be developed, learned or added to your leadership table.  The same as a battle plan does not survive the first hour of combat, neither does a business plan if you are running it alone.  Is your world a VUCA world?  Would you like help figuring it out?  Help is always available for those who ask.

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