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Business has always been competitive and many of the largest, most successful businesses have developed and refined practices that have historically served them very well but now seem to be falling short. So why do many of the traditional, tried and true practices and techniques used for over a century just not working today? While there is no one answer or simple explanation, one way to think of this new business climate is through the lens of “VUCA”.
What is VUCA?
VUCA was first coined by the US Army in the late 1990’s to illustrate the world in the post-cold war environment. It has more recently been adopted by consultants and many businesses to describe our turbulent and ever-changing business environment.
VUCA refers to:
Volatility – Fast change without clear, predictable trend or pattern. The economic, cultural, technological, and social backdrop that most businesses exist in these days changes almost daily. This is the antithesis of stability and many businesses are finding that tried and true business practices are crumbling from the sheer velocity and degree of these changes!
Uncertainty – Frequently disruptive changes, often with unpredictable and unknown outcomes. The degree of variability and lack of stability contribute to the general sense of uncertainty that haunts many boardrooms today.
Complexity – Multi-faceted effects, interdependent causes. The business and technology ecosystem that most businesses must compete in has grown exponentially more complex over the past decades. New and disruptive business models, innovative technologies, and social trends, have made the business competitive environment much more challenging.
Ambiguity – Little clarity about what is “real” or “true”. Making strategic and tactical business decisions is now much more difficult and ambiguous because of the velocity of change (variability), and inherent uncertainty that this rapid change brings.
So, what?
Business in the “VUCA” world is often a blend of new, exciting and challenging opportunities mixed with a turbulent competitive climate that is characterized by increased customer expectations, rapid technology change and increased complexity across the entire value chain. The effects of VUCA are not slowing down, they are accelerating. Business leaders must understand how these forces impact their business and desired outcomes. They must view the world with the lens of VUCA and as an opportunity, not a threat. They must embrace it as VUCA as the context within which their strategic initiatives are framed. One thing is certain, VUCA is here to stay and for your business to thrive, you must learn how to adapt and leverage this reality.
-Dave
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