Schlagwort-Archive: VUCA

The VUCA world

Isn’t globalization accomplished by now? The networks of business and technology have reached even remote regions. The next stage would be cosmolization – increasing the reach into space. Colonization of the Moon and Mars is foreseeable, though not on a large scale. At the same time, small events in Macondo, Colombia (e.g., the flap of a butterfly’s wings in South America) produce significant effects in the Great Plains (tornadoes in Tornado Alley). In other words, small changes in initial conditions lead to unpredictable, potentially huge consequences. Our ability to predict is limited because the world is made up of many components, relationships, states, causes, and continually changing impacts: new ones are added, and old ones come to an end. The mechanistic worldview has led us to believe that our sphere of life is a complicated clockwork that we can understand, subdue, and control based on smart analysis. In the meantime, we know that this conception does not fit the world. The “machinery” changes so rapidly that we can neither understand it nor consciously respond to it in the available time. We call this new dynamic complexity VUCA.

VUCA is an acronym for the essence of our unstable world – volatility, uncertainty, complexity, and ambiguity. Each term illuminates individual characteristics previously referred to as complicated, chaotic, or complex.

  • Volatility
    The perceived speed of change in our environment is accelerated further by advances in IT. The computing power, the speed that moves data from A to B, and the ubiquitous RFID transponders generate an unimaginably growing stream of data. Factual information gets updated faster than ever and is available everywhere through the World Wide Web (WWW). The data has already changed before it reaches the user, not to mention being processed. Consider the stock market, which conducts more than four transactions per millisecond – that’s more than 136 million trades a day. People cannot keep track of this flood nor have sufficient time to react in a reflected manner. The resulting short-lived meaning, the volatility, requires new approaches for dealing with this apparent availability of figures, data, and facts (FDF). We do get revealing patterns that help make decisions. However, divergent views are delivered simultaneously, leaving us Lost-in-Info.
    The mixture of systems thinking, info-literacy and intuition offer a way out. Local actors can proceed appropriately in realizing tasks with a clear description of the current situation, proper long-term foresight, known stakeholder requirements, desired outcomes, and sufficient available resources and freedom.
  • Uncertainty
    It is not just about the amount of data that floods biz but also the data being redundant and thus inconsistent. Despite the abundance, usually essential details are still missing. Some things are described, and others are omitted. It creates a deceptive gray area with many possibilities that are not always necessary. As a result, divergent opinions clash, which must be discussed, intensified by different interests. Many futures can be derived in times of transition, as with the introduction of new biz. In the end, decisions are made under uncertainty.
    Flexible principles and justifications are desirable to simplify the decision-making process. All stakeholders need to secede from uncertain or outdated logic and rethink how to manage the fuzzy tasks – moving away from predetermined approaches to thinking based on probabilities and overarching perspectives. The new paradigms must be instructed to all stakeholders in training sessions.
  • Complexity
    The unimaginable number of components, relationships, states, causes, and effects creates a dynamic complicatedness, which we call complexity. However, the individual parts do not remain stable as in the mechanistic world view, but they change their speed incessantly. The particular situation cannot be described conclusively in the available time. Let’s take the interactions between traffic parties – pedestrians, bicycles, cars, trucks, buses, streetcars, trains, and airplanes. All move through the close-knit traffic network according to their rules. By the time the current state is captured, all the parts have already changed their position unpredictably. Since complex issues can never be fully apparent and described, a tsunami of data floods our attention and causes endlessly missed predictions.
    Dealing with complexity requires elaborating and explaining simplistic, coherent models with the support of beliefs, biz models, and paths into the future. At the same time, the complexity of tasks requires appropriate, diverse skills. All participants contribute to expanding the company’s ways and means through active trial and error.
  • Ambiguity
    Most cultures are just a click away from us. Rival beliefs and various explanations hit each other unprepared. One’s mindset and context distort expressions. Ambiguous leads inevitably create misunderstandings. If, for example, a monochronic meets a polychronic attitude, it puts a strain on cooperation – when, on the one hand, the desire for punctuality and, on the other, an open approach to time stresses both parties. Decisions are made in heterogeneous groups based on assumptions that can be understood differently.
    Explicit clarifications are needed to bring the ambiguity to a point through clear expectations, agreements, and common terms. It includes describing the bigger picture, clarifying nomenclature, and sharing a common view of the circumstances at hand. A shared understanding emerges if daily routines and rules are available to all. Clarity is in the eye of the beholder and requires a proactive, open exchange of views across levels and silo boundaries.

Bottom line: The expanding VUCA world is burdened by our daily lives due to the seven-plusminus-two chunks we can process. The overwhelming complexity, which is continuously changing, ambiguous and unreliable, disappoints our hope for simple, available approaches. Despite massive IT support, we cannot compensate for missing abilities to process VUCA. On the contrary. The additional content should help but reinforce the VUCA world. The outlines and detailed evaluations lack time to take effect, as new differences in the smallest initial parameters occur at any time and lead to unforeseeable consequences. The mindset of those involved in a VUCA world needs McGregor’s theory Y. It is extended by systems thinking as well as designing, communication, and coordination skills with more room for intuition.

Last but not least, the VUCA world needs the skillful preparation of data more than ever. However, software no longer provides answers but only the basics for needs-oriented decisions. We need new ways of acting since there is no going back to a simple if-then. The world is today VUCA.

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.