“Hey, it’s pretty crazy out there!” is something we most often hear as we scurry down office corridors, making it just in time for our next important meeting of the day.
VUCA, an acronym for Volatility, Uncertainty, Complexity and Ambiguity is fast becoming a catchphrase in the corporate arena and an oft-discussed topic for today’s adaptive leaders during annual strategy meets. Economic turbulence and the rapid rate of change in our business environment are throwing many organizations and their leaders pretty much off-balance as they are unable to keep pace with the vagaries of a VUCA world.
VUCA encompasses four similar-sounding yet strikingly distinct challenges that deserve a special mention here:
The VUCA World
Volatility. The nature, speed, volume, magnitude and dynamics of change. The situation is unstable and maybe of an unpredictable duration. However it is not an unanticipated situation as knowledge about a similar challenge was already predicted. For instance, share price fluctuations for an organization following change in its leadership, or after an internal scam has been exposed.
Uncertainty. The lack of predictability of issues and events. Despite the lack of much information, the basic causes and likely effects of the event are known and the outcome generally results in substantial change. For instance, the sudden launch of a similar, yet superior, product offering by a close competitor.
Complexity. The confounding of issues and the chaos associated with this. Some information regarding the nature of complexity is available or can be predicted. However, the sheer volume and nature of the problem could prove to be overwhelming. For instance, the unique tax and regulatory environments, tariffs and cultural expectations associated with doing business in several countries.
Ambiguity. The haziness of stark reality! Herein, the causal relationships are unclear. The situation is unprecedented and one must brace himself to face the unknown. For instance, you decide to enter unchartered territory by exploring immature or emerging markets or launch products out of your core competency/ comfort zone.
So, the obvious question emerges: is it really possible to prepare for a VUCA world? Well, it certainly is. Applying critical thinking in order to better tackle apparently challenging situations and make well-thought-through decisions in a VUCA world is the answer you’re looking for.
Critical thinking can be very simply defined as ‘how to think’ instead of ‘what to think’. Here are a few critical thinking pointers that you could use to tackle the sheer dynamism of a VUCA world (Following the suggested sequence should help. However you are free to improvise!):
For volatile situations: Separating facts from opinions is the key. So is formulating thoughts objectively and precisely as well as ensuring clarity in communication.
For uncertain situations: Listening and comprehension is vital. Being open-minded about alternative points of view and dealing with contradiction are also necessary in such situations.
For complex situations: One needs to gather facts from various sources, do logical enquiry and reasoning and also weigh the alternatives. Weighing alternatives, making decisions under pressure and testing the solutions against relevant criteria are also vital.
For Ambiguous situations: Curiosity; eliciting and evaluating arguments; asking the right questions; adaptability and agility in thinking as well as seeing the consequences and likely implications are essential in such circumstances.
Quite simply, critical thinking is excellence in thought processes which precedes excellence in our actions.
Countering VUCA with VUCA Prime
We are transcending from a world of problems, which requires speed, comprehension and analysis to a world of dilemmas, which demands patience, common sense and a tryst with uncertainty. Hence, countering VUCA requires:
Vision: An intent that seeks to create a desirable and promising future.
Understanding: The ability to stop, look and listen.
Clarity: The ability to help make sense of chaos.
Agility: Organizations where ‘wirearchy’ (the organizing principle of interconnected knowledge, trust, and credibility, that is, the understanding that everything and everyone is connected for forwarding organizational objectives) is rewarded over hierarchy have this attribute.
We are in an era of rapid change and dynamic human development. A failure to meet the challenges will leave many companies behind and the human capital potential of their employees unfulfilled. Leaders of today must become more comfortable and agile with ambiguous and seemingly contradictory demands by focusing on managing paradoxes. They need to make fast decisions through influencing and networking by collaborating across silos, organizations and even industries. This mandates self-awareness, reflection and the need to quickly bounce back from failure. Above all, leaders must become resilient critical thinkers who embrace a mindset of change that is non-negotiable while successfully navigating the turbulence of a vehement VUCA world.