VUCA Effect

With Volatility, Uncertainty, Complexity & Ambiguity (VUCA) being a way of life, it is important for managers to bring tectonic shifts in the way they set goals and engage millennial workforce keeping this dimension in mind.

 

VUCA Cycle

 Fig 1. VUCA Cycle

(Source: Wiki)

V

Volatility. The nature and dynamics of change, and the nature and speed of change forces and change catalysts.

U

Uncertainty. The lack of predictability, the prospects for surprise, and the sense of awareness and understanding of issues and events.

C

Complexity. The multiplex of forces, the confounding of issues and the chaos and confusion that surround an organization.

A

Ambiguity. The haziness of reality, the potential for misreads, and the mixed meanings of conditions; cause-and-effect confusion.

 

Sample Mind Map

The VUCA Dimension

Earlier business goals were largely predictable from traditional business planning approaches like CAGR (Compounded annual growth of the industry), GDP, market trends, consumption patterns to name a few. Typically the trade cycles threw a clear pattern of peaks and troughs and strategists built the business plans based on these indicators.

The VUCA effect was hardly considered in the past as apart from stock markets and oil prices which represented volatility, the rest were fairly predictable from a risk mitigation standpoint.

Kevin Kelly, in his book “Rules of the New Economy” drives home that the new economy is about communication, deep and wide. Leaders and employees often have to pretend that they have understood the ethos of the organization they work for and often have a superficial understanding on how goals & targets, priorities are set.

It’s not uncommon for team members to nod their heads in agreement when new goals are set in meetings, then go back to their division or department and carry on exactly the way they have comprehended.

It is important to be mindful at the level of feeling, thought and behavior to enable ALL to drive the frequent changes that VUCA brings on

To be more VUCA friendly from an organization development point of view, Kevin Kelly mentions in his book that it’s all about shaping an organization’s capacity to:

  • Anticipate the Issues that Shape Conditions
  • Understand the Consequences of Issues and Actions
  • Appreciate the Interdependence of Variables
  • Prepare for Alternative Realities and Challenges
  • Interpret and Address Relevant Opportunities

3 Responses

  1. Ajay says:

    Good Site

  2. Tushar sinare says:

    Very nice

  3. Suhayl Abidi says:

    To manage in an uncertain business environment, I am pleased to bring to your attention the first Indian book on managing business in the VUCA environment which is published this month by Jaico Publishing House. The book “The VUCA Company” is authored by myself, an industry veteran and Prof. Manoj Joshi, Prof. of Strategy at Amity University, Lucknow and foreword by Ms. Shikha Sharma, MD & CEO, Axis Bank and endorsed by over 40 international academic literati.

    For the first time in India, a book brings original case studies on 12 Indian corporate failures since economic liberalization in the 90s, backed by several years of extensive research.The VUCA Company provides insight into behavioural and systemic aspects of failures and under-performance and how individuals and organizations can avoid, minimize and recover from failures.

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