Schlagwort-Archive: Violatility

The dough – the ideal metaphor for VUCA

In the real world, we differentiate between solid, liquid, and gaseous substances. Our common sense suggests clear distinctions. However, many substances show behavior that is difficult to predict: for example, dough, which, depending on many influences, runs through your fingers unpredictably. All you can do is to react to its condition. Nowadays, the business world has to deal with conditions that behave similarly to these non-Newtonian fluids. These imponderables are summarized under the term VUCA.

Depending on the available data about the current circumstances and the future predictability, four VUCA areas can be identified, which apply to all temporal scopes and have their planning horizon.

  • Volatility
    Volatile, i.e., changeable and unstable, hints behaves in a way that is continuously changing. This makes it useless for the calculation of possible futures. Decisions can only be made based on unexpected, short-term variables. There is no other choice than to observe and invent solutions.
    Dealing skillfully with the volatility of decision factors requires a long-term framework and the availability of means and leeway.
  • Uncertainty
    Disclosures is uncertain if it is incomplete or cannot be verified. This makes the current situation unclear. Decisions are made without the decisive hints or at least based on vague criteria. The data must be substantiated and justified to improve the decision-making process.
    Uncertain situations can be handled using a short-term framework of definitions and by opening up new sources and perspectives.
  • Complexity
    Complex facts are unmanageable and unreliable because a flood of data is provided in parallel. The forecast is, therefore, fuzzy. Decisions suffer from competing, essential factors that must be considered. The structuring and categorization of hints contribute to improvement.
    A medium-term framework consisting of coherent models and the adaptation of the internal performance to external heterogeneity promotes better processing of complexity.
  • Ambiguity
    Ambiguous information is the basis for misunderstandings since it may be interpreted differently and is unprovable. Decisions are made on the basis of uncertain, vague conditions. The ambiguity is reduced by limited and defined messages.
    The determination of an ad hoc framework enables experiments beyond daily routines and rules. Many experiments lead to better results.

Bottom line: The assumption that we usually have sufficient hints should be a matter of the past with the flood of data. Full transparency does not exist. Reasons based on facts should be viewed critically from the beginning since decisions are based on randomly perceived facts. It may be irritating, but we should be aware that we cannot know and consider all parts and relationships. The resulting vagueness of the situation description ranges from ambiguity to uncertainty and complexity to volatility. This means that decisions ALWAYS take place based on uncertain or missing data – at the latest perceptible when a wrong decision is justified with the experts’ incorrect advice. According to the recipe book, experienced bakers do not just process their dough but mostly adapt to the dough’s respective nature. The different VUCA dimensions also offer starting points for responding to current circumstances and the behavior of the people involved. This makes the dough an ideal metaphor for VUCA.