Dealing with VUCA in Business

I heard someone use the term VUCA when talking about management and leadership. What does VUCA mean? How can it apply to helping run a successful business?

Thoughts of the Day: Let’s start with defining VUCA, where it comes from and then get around to how it relates to management and charting a path for success in business.

VUCA is an acronym: Volatile, Uncertain, Complex, Ambiguous. It comes from the U.S. military, the Army War College.

The term is relevant to the business world, as well. In today’s world, conditions change quickly, in unpredictable ways, with a myriad of impacts that are not at all clear as to how they will play out. In other words, VUCA.

Learning to deal well with VUCA can result in a paradox: be prepared by learning to live with not being prepared. In a stable, constant world, it is possible to prepare through static examples: if “a” happens, we do “b”; if “c” happens, we do “d”. When the world becomes volatile, the game goes to those who can think their way through ambiguity without getting lost in the complexity of information or hung up on the uncertainty of options coming at them.

Winners are more likely to be those who can craft a flexible strategy, and constantly adjust tactics. And who recognize that sometimes it pays to be lucky. In which case the survivors must quickly get moving, set their eye on the horizon, and take steps to figure out a new game plan.

What does that mean for management? It means educating your workforce. It’s about teaching people how to take action, which is more than memorizing what to do next. And for many business owners, stuck in the command and control of, “do it because I told you to”, that means significant, personal behavior changes.

Owners must learn to step back and allow their employees to practice dealing with uncertainty. Instead of giving people answers, ask them what they would do, and encourage them to take chances. By experimenting with options, and learning to make corrections, individuals build skill and confidence. Over time they learn that they can handle more complex situations without relying on someone else to tell them what to do.

Owners must let go of control and instead look for ways to involve employees in situations that are ambiguous. Teach employees that it is okay not to have all the answers. Help employees to hone their judgment skills, while teaching them to take action even when they’re not clear about how things will come out.

Find the leaders in your group of employees. Encourage them to test their skills at building confidence in the people who work with them. Develop a matrix environment, where no one relies on just one person to lead or take action. Build team decision-making and action-taking skills, such that a group can function effectively even when there are multiple opinions for how to proceed.

Expose your company to VUCA. Help your people to trust what they learn from experience while also growing their ability to embrace change and try new things. Encourage risk taking – within limits – and help people develop critical thinking skills.

Be sure to embed ethics in everything you teach and do. Stress can tend to bring out the worst in all of us. Teach your people about the importance of integrity. Help every one who works for you to build a strong, positive character to sustain themselves in difficult times.

Keep in mind that unstable conditions often result in breakthrough opportunities. Instead of putting your head down trying to solve today’s problems, look up and anticipate what the world will need tomorrow. Involve employees, customers and suppliers in brainstorming sessions about the future. Teach everyone around you to see the world as full of opportunity.

Looking for a good book? If You Will Lead: Enduring Wisdom for 21-st Century Leaders, by Doug Moran.

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