What is VUCA and how can businesses manage with VUCA environment?


“A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.                                                                                        Winston S. Churchill


The future is VUCA. Do you know what VUCA means? VUCA means volatility, uncertainty, complexity, and ambiguity. It is an acronym that’s now been around for three decades. These leadership theories were introduced by Warren Bennis and Burt Nanus to bring the concept that we have to accept and embrace change as a constant part of the business as well as life. This is an integral part of the working environment.

The future is volatile, it’s uncertain, it’s complex and it’s ambiguous. You might go through questions like are we turning these things into our competitive advantage? Are we even aware of what is impacting our businesses? Are we using this to increase our performance, profitability, and productivity? No doubt, you will meet uncertainty but with understanding the environment calmly you can deal with those overnight. Therefore, make sure to act in three steps- Analyze, strategize, and then respond to the situation. 

Our businesses and teams are ready for this change. We embrace idea culture and comfort every employee with an open door policy in case of any suggestion. We understand that ideas are not bound by experience. Anyone can lead the change with brilliance and correct evaluation of the situation.  

Are then we ready for the dynamics of the future? We live in an era where we lack predictability, we lack understanding of issues and events that are happening, we are even uncertain as to the pace of change that will happen.

The complexity of the future continues to increase. There are multiple forces, there are confounding issues, there’s no cause and effect change and there’s the confusion that surrounds many organizations. There is only one way we can fight with complexity which is finding solutions with patience and implementing them with a vision to bring clarity and agility in actions. 

What are we doing to minimize the risk of complexity in our organization? And the last one is ambiguity. Obscurity of reality, the potential for mysteries, and the mixed meanings of conditions from results and effect can cause confusion, we agree here right? All of these issues are current issues in business. In the state of confusion go for suggestions, there are so many ideas around the corner that can make any obstacle a piece of cake for you. Initiating a step ahead for suggestion not only encourage building a bond but also allows you to analyze the skills of the surrounding people.

Bill George, who’s a senior fellow at Harvard, believes that we need to have a leadership response. He believes that to address VUCA, we need VUCA 2.0. This new version of VUCA stands for vision, understanding, courage, and adaptability. Thus, from your business’s perspective, what is your vision? What is your understanding of the future issues? How courageous is your business? 

One of the clients that we are currently working with had a look at the uncertainty, complexity, and volatility of their market. As a result of doing market research, they have actually made a decision to discontinue in an international market. This was a business owner’s passion, pride, and joy. 

However, because of VUCA, a business decision we decided to discontinue this dream project. The end result is that they are now minimizing their risk and they are maximizing their potential for profit and sustainability here in Australia, and we see that the VUCA 2.0 goal or vision, understanding, courage, and adaptability have been met.

Focus a bit on spending Christmas together as a family. We think we know what’s going to happen, we think we know how it’s going to be, but by the time you get all friends and family there with a few drinks under their belt, sometimes, unfortunately, the Christmas party does sometimes become volatile, uncertain, complex and ambiguous. However, sometimes it needs a grandma to show VUCA 2.4, to show vision, understanding, courage, and adaptability, and ensure that everyone around is as happy as possible and look forward to Christmas next year.

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