VUCA is a concept that originated with students at the U.S. Army War College to describe the volatile, uncertain, complex, and ambiguous nature of the world after the Cold War ended in December 1991. Since then, the concept has gained new relevance to characterize the current environment within a growing digital economy and the leadership required to navigate it successfully. In this context, it’s used to describe the chaotic, turbulent and rapidly changing business environment that has become the ‘new normal’ for many organizations.
However, by focusing on each element of the VUCA acronym in isolation, and by better understanding its inherent nature, organizations can begin to distil a better way of working in response to change. Typically, VUCA delineates the dynamic nature of market forces in which organizations, in any sector or industry operate today. This dynamic nature (or its challenges) is characterized by:
- Volatility- refers to the nature, speed, volume, magnitude and dynamics of change in an industry, market or organization. The more volatile the environment is, the more and faster conditions change.
- Uncertainty- refers to the extent to which organizations can confidently foresee an inflection point that may adversely impact the business model in terms of strategy, structure, processes, people and rewards. The more uncertain the environment is, the harder it is to predict.
- Complexity - refers to the multiplicity, diversity and interconnectedness of factors that organizations need to take into account. The more complex the environment is, the harder it is to analyse.
- Ambiguity- refers to a lack of clarity and difficulty of understanding exactly what the situation is resulting in a haziness of reality. The more ambiguous the environment is, the harder it is to interpret.
Introducing VUCA Prime – The answer to VUCA
VUCA Prime is a behavioural leadership model, first introduced in 2007 by Robert Johansen (a distinguished fellow at the Institute for the Future), to counteract each of the four elements of VUCA with a specific positive response. They are:
Vision rises above Volatility — when conditions are changing unpredictably, leaders should keep focused on new strategy objectives and the desired target state. This should be a compelling picture of the future that aligns stakeholders around the purpose of the transformation, the scale of the ambition and the nature of the benefits.
Understanding reduces Uncertainty — when uncertainty is encountered, explore and experiment incrementally in order to increase understanding of external political, economic, social, technological, legislative and environmental (PESTLE) factors.
Clarity counters Complexity — when faced with the unknown and unpredictable conditions that can only be understood in hindsight or retrospect, learn to simplify where possible as clarity informs decisions and decisions enable successful strategy implementation.
Agility overcomes Ambiguity — when the future contains multiple alternatives, be ready to adapt the approach to match the desired outcome. Organizational agility is simply achieved by adopting the Heart of Agile practice of collaborate, deliver, reflect and improve against agreed metrics to produce better results together.
In an ever changing dynamic, organizational leaders must change their approach. Navigating in a VUCA environment through a growing digital economy should not be seen as a problem that can be resolved, but as an ongoing dichotomy that must be effectively managed. To survive and thrive, organizations need to take a broader perspective when making strategic investment decisions in a VUCA environment. Rather than simply react to change, organizations need to move towards a more proactive response to change.
Since the forces of VUCA and VUCA Prime exist in dynamic equilibrium, leaders must learn how to balance the energy of either side with its complement. The interplay of VUCA and VUCA Prime generates the productive energy state that can drive organizations to adapt, change and evolve to the conditions of their organizational environment by taking a multi-model approach to transformational change. Like Dave Dame says ‘change is scary but complacency is deadly.
- Galbraith, J, 2016, The Star Model, Galbraith Management Consultants Limited, Viewed 10 January 2022, https://www.jaygalbraith.com/services/star-model
- Giles, S, 2018, How VUCA Is Reshaping The Business Environment, And What It Means For Innovation, Forbes, Viewed 25 April 2022, https://www.forbes.com/sites/sunniegiles/2018/05/09/how-vuca-is-reshaping-the-business-environment-and-what-it-means-for-innovation/?sh=28f09705eb8d
- The Heart of Agile, 2022, Viewed 25 April 2022, https://heartofagile.com/
- The Strategic Agility Institute™, 2017, Ready to SHIFT Your VUCA to VUCA Prime?, Viewed 25 April 2022, http://www.strategicagilityinstitute.com/blog/2017/3/21/ready-to-shift-your-vuca-to-vuca-prime
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