Over the recent decades, VUCA acronym has become quite a buzzword. You are bound to stumble on it on Internet. An integral part of our life today, VUCA refers to the circumstances in which we happen to be living in.
The acronym was used for the first time in 1987 to describe or discuss volatility, uncertainty, complexity and ambiguity of general conditions and situations, and drew on the leadership theories of Warren Bennis and Burt Nanus. Notably, Ralph M. Stogdill pointed out that there are nearly as many different definitions of leadership as there are people who have tried to define it. According to Bennis and Nanus, to understand leadership one must grasp such nuances as:
- leadership is about path-finding, while management is path-following.
- leadership is about doing the right thing, while management is doing things right.
This is what makes a manager different from a leader. Briefly, the job of a manager is to deliver other people’s plans and strategies, while a leader’s role is to first develop them.
Let’s go back to VUCA. What does the acronym stand for?
V = Volatility – the nature and dynamics of change, and the nature and speed of change force and change catalysts. Change is an integral part of everything that we do.
U = Uncertainty – the lack of predictability, the prospects for surprise, and the sense of awareness and understanding of issues and events. Uncertainty is also the most objective characteristic of an environment. Uncertain environments are those that don’t allow any prediction, also not on a statistical basis. The more uncertain the world is, the harder it is to predict.
C = Complexity – the multiplex of forces, the confounding of issues, no cause-and-effect chain and confusion that surrounds organization. Complexity refers to the number of factors that surround us; the more factors, the more complex an environment is and the harder it becomes to analyze it and draw rational conclusions.
A = Ambiguity – the haziness of reality, the potential for misreads, and the mixed meanings of conditions; cause-and-effect confusion. Looking at the other headwords, it seems natural to conclude that the more ambiguous the world is, the harder it is to interpret.
What made leaders in the Industrial Age successful simply will not work in the VUCA age with its raging unpredictability. That said, each organisation can adapt to VUCA. Here is what they need to do:
- speed up interactions – in the VUCA age, speed matters more than perfection
- democratize information – information security is important, but hassle-free internal communication inside the organisation and ability to make decisions are getting even more vital
- Push decisions down to the edge of the organization, where information is the freshest and most salient: the cash register, the production line, the call centre, and sales reps. (after Dr. Sunnie Giles)
In the VUCA world, life is more and more often governed by chaos and chance. The world is getting disorganized, thus disrupting our paradigm of order, sense of meaning and stabilisation. In the view of a growing complexity of things, ability to make sense of what is happening around us becomes critical. It is by no means easy. And it gets even harder when we realize, or perhaps even experience it first-hand, that as human beings we are imperfect in our perfection.
The biggest challenge is to embrace VUCA, including understanding and reconciling oneself with the “reality of change”. It means adapting to new conditions and seeking innovative solutions, avoiding routine and never giving up. Each organisation has to learn how to grow from failure. Make volatility work to your advantage.
„Some things benefit from shocks; they thrive and grow when exposed to volatility, randomness, disorder, and stressors and love adventure, risk, and uncertainty” Nassim Taleb
We are at the threshold of the Age of Change. When it arrives, we will need people. The era of robotics and process automation will create a need for a person who is a good team player, critical and outside-of-the-box thinker and an inspirational and creative human being.
Business Psychologist, Mentor, Founder of INSPIRE