VUCA isn’t corporate jargon. It isn’t another “circle back,” “touch base,” or “paradigm shift.” It has real meaning and originates from the result of rigorous research, analysis, and application in an era of high consequence - the world post-Cold War.
Volatile, uncertain, complex, and ambiguous, or VUCA for short, was an appropriate way to describe the world post-Cold War and provided a framework with which to analyze strategy and leadership in a rapidly changing world. Fast forward 30 years and VUCA is now used by many organizations to describe the dynamic nature of the business environment and in the case of VUCA leadership, the skills required for leading through VUCA.
The term VUCA stands for volatile, uncertain, complex, and ambiguous. Let's break that down:
Volatile - Volatility means the velocity, volume, and magnitude of change in an industry, market, or world. Some examples include government regulations, commodity pricing, supply chain, economic downturn, or a global pandemic. Big and small, changes like these are becoming more unpredictable and the speed at which they’re taking place is increasing. As such, leaders must be prepared to answer to the ongoing challenges that are outside of their control the moment they happen.
Uncertain - Uncertainty means a lack of predictability. For leaders, the ability to anticipate change is becoming harder as historical information and past experiences are losing relevance in predicting what is to come. This demands leaders to create agile plans and strategies to meet the needs of the uncertain business environment and allow them to take action quickly in response.
Complex - The dynamic, interdependent nature of organizations and the environment they operate within are making it hard for leaders to understand the repercussions of decisions as different layers are merged together and how things are related becomes unclear. Not to mention, complexity is amplified by technology, digital transformations, globalization of organizations and their workforce, organizational structures, and mergers and acquisitions. All of which can make sound decision-making feel nearly impossible.
Ambiguous - Ambiguity means that the direction one should take is not clear, as it is a new territory that is unfamiliar and outside their comfort zone. There are no best practices for what leaders and organizations are experiencing. For example, no leader had the experience to navigate a global pandemic and the resulting effects and changes that needed to take place.
VUCA leadership is the ability to shift and respond to changes in the business environment with corresponding actions that are focused, quick, and agile. Satya Nadella, the CEO of Microsoft sums up the importance of leadership right now giving what we continue to face:
“The role of leadership today is to bring clarity in uncertain times. The more uncertain things are, the more leadership is required. There is no job description for what you are facing, no rule book... Today’s leaders need to thrive in the face of this uncertainty.”
You will never be certain of the changes ahead, however, key leadership skills and behaviors will help you and your team adapt to the business environment and thrive in a VUCA world.
Clearly defining the organization's core value proposition and how you and your team fit into it through your daily contributions is critical in times of change. Setting and communicating a shared purpose and vision, in turn, helps your team understand the bigger picture. When everything is constantly changing, this shared purpose and vision is a pillar to keep coming back to.
Monitoring and tracking trends, competitors, and the business environment to identify patterns and variables that may impact your team and the organization can give you an early warning of possible impending change. When you incorporate this into your function, you can start to anticipate and prepare for change.
In times of uncertainty and change, an ideal leadership trait is the ability to be flexible and adaptable. VUCA leadership requires one not to be stuck in their ways and rigidly work against their annual plan. The very nature of VUCA leadership is an ability to flex, pivot, and be agile as new information is obtained, decisions are made, and opportunities arise.
In VUCA leadership, having a bias for action is critical. It’s the ability to make a decision when you have incomplete information, cannot fully realize the complexity and interconnectivity of the decision being made, and experience cannot be relied on as this decision has never happened before. Leaders must accept they are operating in an imperfect world and they must make the best choice for their project, team, and organization between action or inaction.
When leading through unprecedented times, innovative thinking and idea diversity, which requires input across all functions and levels in the organization, is needed to uncover new solutions. As there are no best practices when navigating through times of VUCA, facilitating collaboration among employees as a leader becomes all that more important as everyone is needed to find innovative solutions and quickly adjust to the changing reality.
No matter your function in the organization, having a customer-centric focus on how external forces will impact the customer experience at the forefront of decisions is essential in leading in a VUCA world. Alok Ohrie, President and Managing Director of Dell Technologies, articulates this perfectly,
“In today’s volatile environment and with challenges of digitalization, organizations can no longer hide behind their brands. There is a need for robust processes, common standards and clear ways of working across the companies. The end goal of all these is to consistently charm the customer.”
In a complex and changing situation, leaders need to focus on the customer and have an understanding of the consequences of their decisions on the customer. To win in a VUCA world requires finding solutions to mitigate any negative consequences on the customer experience.
In uncertain times like today, you may be left wondering, what can you do to develop your leadership skills to succeed in a VUCA world? The first would be to do a self-assessment of how ready you are to lead through uncertainty to identify gaps and determine what you need to learn and practice. From there, seek out a VUCA leadership development program such as management and leadership training or one-on-one coaching to accelerate the development of your leadership skills and abilities so you are ready to take on the next challenge when it arises.