Dealing with a made-up word from the last century holds contemporary solutions for the age of digitalization.
"VUCA or what?"
For some, VUCA is another buzzword, for others it remains an abstract term, and there are still people who have never heard VUCA.
What is too abstract and unknown is not dealt with at first. Why should they - when there are already enough things around me that are volatile, uncertain, complex and ambiguous. Which brings some to a new approach in dealing with the phenomena of VUCA -volatility, uncertainty, complexity and ambiguity:
To consciously perceive them, relate them to one's own context, reflect or anticipate their current and future effects, and derive solutions from them.
Where does the term VUCA come from?
VUCA is an acronym. For the first time in 1985, the two economists and university professors Warren Bennis and Burt Nanus described in their book "Leaders - The Strategies for Taking Charge" the challenges posed by various external factors for management and leadership and what consequences these have for corporate management. The acronym VUCA was found for the four phenomena Volatility, Uncertainty, Complexity and Ambiguity that have a decisive effect and need to be taken into account.
Why is the origin of VUCA often associated with the US military?
In the mid-1990s, after the collapse of the socialist system, suddenly there was no longer the ONE ENEMY. In the jargon of the U.S. military, VUCA describes the conditions of modern warfare - key words: asymmetric warfare, suicide bombers, jungle or street fighting. The conditions can no longer be compared to the clear front lines of past battles, where two large armies met. Which means that strategy must be adapted to the changing environment.
Why the U.S. military has used VUCA categorization is expressed in the following quote:
"Military is never reactive. It's always responsive!"
by Mike Schindler (Award-winning author, US Navy Veteran, One of the US nation's foremost experts on veteran issues and individual/team leadership).
It's about preparation, anticipation, exploration, evaluation, adaptation and responsiveness.
What is VUCA all about?
The acronym VUCA is made up of the four terms volatility, uncertainty, complexity and ambiguity:
- Volatility describes the intensity of fluctuation over time. It is easy to understand using the example of share prices: share prices that fluctuate strongly within a short period of time are shown as "sharp spikes" in the progress chart. The higher the volatility, the stronger and more "jagged" the swings
- Uncertainty describes the unpredictability of events. The more "surprises" the context holds, the more uncertain it is.
- Complexity is influenced by the number of influencing factors and their mutual dependence or interaction. The more interdependencies a system contains, the more complex it is. The term "complex" has to be differentiated from the term "complicated" - even if both are often wrongly used equivalently. A complicated system can be simplified without destroying the internal structure of the system. Example: a complicated mathematical fraction is simplified by shortening it. A complex system, on the other hand, will be destroyed if one tries to simplify it - e.g. by decomposing it.
- Ambiguity describes the ambiguity of a situation or information. Even if a lot of information is available (i.e. certain and predictable), the evaluation of it can still be ambiguous. "And what does that mean now?", is a typical question in such situations, even if actually "all facts are on the table". Communication situations often involve a high degree of ambiguity. To make matters worse, however, the people involved are often not even aware of this.
VUCA Positive Prime according to Bob Johansen from 2007 describes exactly these requirements in dealing with the effects of volatility, uncertainty, complexity and ambiguity. It requires vision, understanding, clarity and adaptability or agility.
It is precisely this understanding that is at stake today and will be more important than ever in the future. What is needed is VUCA management and VUCA leadership and an awareness of the solutions that lie within them. The analysis of the individual affectedness by the VUCA phenomena must and can be answered in terms of approaches, solutions and concrete measures.
Thus, VUCA also becomes a methodology!
VUCA is out, BANI is in? Who knows RUPT and TUNA?
With all the diversity of words of art, my assessment in advance:
It needs any translation and creation that gives orientation and lets organizations and leadership do more of the appropriate! It would be wrong and unwise to send the terms and the ideas behind them into a competition with each other. Rather, it is value-adding to think the respective statements and positions together and to understand them as further support for a world that is moving forward and at no point means "exception to a rule" anymore. That would be very naive and more wishful thinking than realism.
VUCA describes the changing framework conditions
In this VUCA world, especially in the age of digitalization, leaders need to act differently - officers as well as managers. Because the environment has also changed radically for companies and conventional leadership methods are reaching their limits.
Companies can and must adapt to this new world.
VUCA therefore aims to make the intangible tangible. And stands for the description of the changed framework conditions under which decisions have to be made today. It is an environment in which information no longer has any predictive significance, because framework conditions change very quickly, coalitions of interests are becoming more and more complex, and motivations are constantly changing.
Everything is completely "VUCA" - so what to do?
VUCA environments require companies and organizations to adopt a new type of leadership and decision-making that differs from traditional logic and planning methods. Allowing for illogic and the ability to react quickly to unexpected developments ensure future viability.
Companies and organizations that want to succeed in VUCA environments must therefore rethink existing beliefs and entrenched patterns if they want to be flexible and adaptable and thus not even hinder themselves for dealing effectively with VUCA impacts. They should be able to recognize unforeseen developments, prepare to act quickly and also quite pragmatically instead of relying on rigid plans and processes.
VUCA becomes a topic of leadership and organizational development
In team sports, it is unthinkable that a game between two teams will be exactly the same twice in a row. Maybe the game ends with the same result, but the course of the game and the individual actions will be different each time. Too many factors such as opponents, referees, luck, weather, spectators, form on the day, standings, tactical alignment, etc. influence the game. And here we are directly in the world of managers and decision makers. Stefan Kermas, Olympic field hockey champion and former coach of the national field hockey team
Decide to decide!
Managers and entrepreneurs have to make more or less far-reaching decisions every day. But how can I decide in a VUCA world? Even more so when speed and a certain degree of pragmatism are required? "Rational decision making" is still considered the gold standard of decision making. And it's true: the merits and successes of this approach are undisputed.
Hooray for ratio. It is regrettable, however, that some decision-makers still believe that good decisions are actually made purely rationally. Findings from brain research, on the other hand, show that ratio is often only a "justification provider" for the decision previously made "by the gut". In this sense, the "reason-seeking" ratio is only a servant of an intuitive - and partly unconscious - decision. Therefore, it is also about one's own, inner permission to consciously allow needs and emotions and to acknowledge them as an essential part of VUCA capable decisions. Especially since it is much more about a both/and than seeing the either/or mode as the measure of all things.
Admittedly, this is also an undifferentiated and exaggerated view.
However, experience shows that in decision-making situations the most appropriate solution emerges when both ratio and intuition are given their place and are accorded equal importance. Ultimately, this always involves the two parameters:
- How much information do I have about a situation?
- How much can I estimate the effects of my actions?
Basically, I can counter this by providing volatile conditions with sufficient fluctuation buffers, uncertain situations with a solid amount of information, and complex developments with a combination of information and resources.
I am firmly convinced that people can do a great deal if they are allowed to and if they are given trust. If their needs are given space and the freedom to take responsibility, to make their own decisions - and also to accept the consequences. These are essential success factors for maintaining orientation and navigating mindfully in a VUCA world under the sign of digitalization.
The basis for my very personal attitude and statement:
"Fortunately, it is only VUCA!" VUKA Facilitator®