The VUCA World Order
Use Volatility, Uncertainty, Complexity, Ambiguity to Your Advantage
FUTURE PROOF – BLOG BY FUTURES PLATFORM
Some years ago, Deloitte’s CEO Cathy Engelbert said that in 10 years we won’t recognize many of the companies leading the world. And we are all familiar with stories of smaller companies and new innovations changing the world in what seems like an instant. But can organizations prepare for these changes? What do organisations need to do to develop good strategies and prepare for the future in a rapidly changing and increasingly complex world?
In the 1990s, a new term to describe our world appeared. The US Army War College described the new world order as volatile (V), uncertain (U), complex (C), and ambiguous (A). Initially, this was used to describe the state of world affairs in a post-Soviet Union world. But VUCA quickly became a common language in the world of strategy making, especially in governments and organizations.
In this type of world, old ways of doing strategy are no longer sufficient. We need new strategy-making processes that, in part, begin with the assumption that the world is VUCA.
Here are 2 things such a strategy-making process would need.
CONTINUOUS PROBING FOR THE FUTURE AND TRENDS
In the world of VUCA, it is important to be constantly curious about what the future has in store. Most organizations already probe for new opportunities and threats on a periodic base. But doing it a couple of times a year, or using the information only a couple of times a year, is not enough anymore.
Today it’s important to engage in continuous, ongoing probing throughout the entire year. Only by doing so can trends and patterns emerge out of the constant change and complexity of the world. As Eric McNulty puts it in PwC’s strategy business, “persistent probing will help you discern if it’s off by 5% o4 95% before events swiftly reveal the answer to you”. The practice of foresight, therefore, is the first step toward crafting successful strategies.
GET OTHER PEOPLE INVOLVED IN FORESIGHT ACTIVITIES
Another important factor for creating good strategies in the world of VUCA is to get people in the organisation involved. And this can happen in many ways.
Foresight does not need to be a small-team effort or the effort of a single person. In an organisation, it can be done by larger teams or even the whole company in, say, some smaller companies. Provided that there are clear guidelines and processes in place, doing collaborative foresight will help you collect a broader range of information and perspectives.
After collecting the information, strategists and leaders should look to inspire debates and discussions around the findings. Every time future trends emerge or specific events occur, a new conversation can start around them.
As People Matters suggests, eliciting and evaluating arguments, asking the right questions, and being open-minded about alternative viewpoints—these are all important components of a capable leader in a VUCA world.
Of course, the decision-making process can remain with top management, but in many cases, other employees or members of the organisation can participate in the process of foresight. This can result not only in better strategy but also in innovation.
For example, imagine a small company making wood parts for a certain market, but foresight experts note that a specific market will soon become irrelevant. All company employees can come together and discuss both the trend and what should be done. An innovative solution of using the company’s expertise to serve a radically different market and one much more successful than the previous one can come from anyone.
But there’s another reason why getting people involved is important. As mentioned by McNulty, constant change brings uncertainty, and most people are uncomfortable with uncertainty, especially in the context of VUCA. People like to know that they will have a job tomorrow. And when they don’t know what is going to happen a few months or years down the line, problems can arise. Involving people in foresight and strategy work will boost people’s trust in the organisation and give them a platform to co-shape the future of their organisation and their role within it.
So, engage other people, start and moderate debates, and let them be part of the process. It will make your organisation smarter and your employees more productive.
STRATEGY WITH VUCA
In a VUCA world, the old “set goal – plan – execute” does not work anymore. Instead, we need a strategy that is flexible and adaptable to the ever-changing context, with a strong focus on a broader vision or mission. To achieve this, it is crucial to stay up-to-date on the latest future developments and be ready to adjust as needed. This requires ongoing monitoring and engagement with what's happening in the world, and involving members of your organisation in the process.
Do these, and you’ll build a more resilient and prepared organisation that is well-equipped to navigate the challenges of an uncertain future.
When analysing future trends, you don’t need to start from scratch. With tools like Futures Platform, you can access futurist analyses on hundreds of future trends and scenarios, create your own insights, and collaborate with your team all in the same place.
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