Where does the term “VUCA” come from?
VUCA - a term of the American military?
First described in 1985 by economists and university professors Warren Bennis and Burt Nanus in their book "Leaders. The Strategies For Taking Charge," the challenges posed to management and leadership by various external factors and what the consequences are for corporate leadership. In the early 1990s, VUCA was the US Army War College's response to the collapse of the USSR. With the demise of the "Eastern Bloc" as "the one enemy," the challenge was to find and implement new ways of seeing and responding under conditions of volatility, uncertainty, complexity, and ambiguity.
VUCA is an acronym
The acronym VUCA is composed 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 show up as "sharp jaggies" in the progress chart. The higher the volatility, the stronger and more "jagged" the swings.
In this model, uncertainty describes the unpredictability of events. The more "surprises" the context provides, the more uncertain it is.
Complexity is influenced by the number of influencing factors and their interdependence or interaction. The more interdependencies a system contains, the more complex it is. The term "complex" must be distinguished from the term "complicated" - even if both are often used incorrectly and equivalently. A complicated system can be simplified without destroying the internal structure of the system. Example: an unclear mathematical break is simplified by shortening. A complex system, on the other hand, is destroyed if you try to simplify it - e.g. by disassembling it.
Ambiguity describes the ambiguity of a situation or information. Even if a lot of information is available (in the sense of being secure and predictable), the evaluation of the same can still be ambiguous. "And what does it mean now?" is a typical question in such situations, even when actually "all facts are on the table". Communication situations often contain a high degree of ambiguity. To make matters worse, the people involved are often not even aware of it.
VUCA describes the changed conditions
In this VUCA world, especially in the age of digitalisation, executives have to act differently - officers as well as managers. For companies, too, the environment has changed radically and conventional management methods are reaching their limits. Companies can and must adapt to this new world. VUCA therefore aims to make the undetectable detectable. 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 prognostic value because framework conditions change very quickly, coalitions of interests become more and more complex and motives are constantly changing.
It depends on your own values!
That still leaves the ambivalence decision. Simple trial and error, for example, helps here. The yardstick between waiting and acting is central. If everything is already constantly changing ("panta rhei"), when do I set off? Experience shows that there is no absolutely right time here. Rather, it is helpful to be very conscious of the tension between change on the one hand and identity on the other. Personal values provide the orientation. They are the compass in times of search, confusion, striving for a decision, longing for an authentic solution. Therefore, one's own values are also the pilots in the turbulent digital VUCA times. Today, more than ever, this is something we should be concerned with.
What to do when everything becomes completely "VUCA"?
The military is taking the path of technology - and thus relying on the strategies of the old days. More reconnaissance, more surveillance, more drones, more robots, more ... The problem is that this is only available at a high (not only) financial price. In some cases, companies can try to explore large databases using big data / data mining approaches. However: the data sets often only concern the customer side (not the competitors, employees, suppliers or other stakeholders); not all customers come in "thousands" (which are needed for data mining); not every company has the financial resources to dig this kind of digging in the data pile. So - what to do?
VUCA becomes a topic of leadership and organizational development
Managers and entrepreneurs have to make more or less far-reaching decisions every day. But how can I make decisions in a VUCA world? "Rational decision making" is still considered the gold standard of decision making. And it's true: the merits and success of this approach are undisputed. Hooray for the ratio. But it is regrettable that some decision-makers still believe that decisions can actually be made purely rationally. The findings of brain research, on the other hand, rather show that the ratio is often only a "justification provider" of the previously "gut-worn" decision. In this sense, the "reason-seeking" ratio is only a servant of an intuitively - and partly unconsciously - made decision. Admittedly, this too is an undifferentiated and exaggerated view. Experience shows, however, that in decision-making situations the most appropriate solution emerges when both reason and intuition are given their place and are given equal importance. Ultimately, it is always a question of the two parameters: How much information do I have about a situation and how much can I estimate the effects of my actions? Basically, I can counteract this by providing sufficient fluctuation buffers to volatile conditions, a solid amount of information to deal with uncertain situations, and a combination of information and resources to counter complex developments.