What is VUCA? VUCA stands for volatile, uncertain, complex and ambiguous. As a concept (and acronym), it can be traced back to military strategy work in the 1990s although, to be fair, life (the big, existential version) has essentially always been volatile, uncertain, complex and fundamentally ambiguous so it’s kind of been around even longer than that.
If you’re feeling a little off the mark, you’re likely in very good company. In the competition for “most unpredictable,” the last few years have arguably been the top contenders. Even the most tenured financial analysts can’t seem to agree on where we’re heading or what the outcome will be.
What seems certain is that we will have to deal with volatility, uncertainty, a great degree of complexity and a healthy dose of ambiguity. In short, we’re in VUCA territory, and VUCA territory can be truly scary. But, for the brave of heart (or sometimes the foolish), big opportunities can coexist with big danger.
I think a case can be made that volatility is the product of uncertainty which is the product of complexity and ambiguity.
After all, what does it mean for a situation to be volatile? Typically, it means we don’t understand the various drivers impacting the situation.
How uncertainty leads to volatility
Uncertain of the outcome, we can’t anticipate how or when events will change. When we don’t understand the drivers or their intensity, we can’t predict outcomes. Needless to say, it’s difficult to plan your business in such a state, where you are uncertain where things are going and how fast they’re moving.
Uncertainty arises through extreme complexity and a sense of ambiguity inherent in the information available to us. We gather data, work to make informed decisions and track our progress. But even the most careful data mining and analysis are subject to some degree of imprecision. No course of action is undertaken with complete certainty. When the data we use to make decisions is increasingly complex and unclear in terms of specified outcomes, it becomes that much harder to understand just how we are to proceed.
Complexity is connected to ambiguity
Complexity and ambiguity are linked. The more complex a situation, the more ambiguous. All too often the more data you gather, the harder it is to determine the right next step. This is commonly referred to as analysis paralysis and can often delay or even derail decisions.
Consider the onslaught of data related to COVID-19. The amount of focused research on this public health issue has never been greater but creating clear and simple guidelines that applied to the entirety of the population proved to be essentially impossible. The number of factors impacting both the exposure and the experience of having the virus created a rather spacious room for uncertainty and ambiguity to make themselves comfortable.
Of course, as data continues to increase, advice is becoming more specific around comorbidity factors, age, gender and even ethnicity.
Clarity will likely continue to grow, as research is ongoing, but in the absence of perfect information, ambiguity and uncertainty will always have a home.
This is not to suggest that collecting data is, in and of itself, the problem. But analyzing or drawing conclusions about data is always an act of selection and prioritization. We select and prioritize some data at the exclusion of other data, to construct a narrative that supports our goals.
When the data is tremendously complex, or we are unable to find our way through the data to create a sensible interpretation, then uncertainty enters — it becomes unclear how to map a path forward.
Unfortunately, the onslaught of data shows no sign of slowing, so creating strategies for handling information and gaining clarity for decision making will be increasingly essential for leaders to develop if they are going to combat uncertainty.
A VUCA strategy
To that end — developing a strategy toward VUCA — how do we go about it? Sure, some degree of VUCA is inherent, but how do we best mitigate the more far-reaching consequences that VUCA interjects into our business and its operation? How do we address this volatility? Or create improved certainty around our path forward? How do we combat increasing complexity? And generate clarity amid the wash of information at our disposal?
First, to start at the end of the chain, ambiguity thrives when we lack clarity around information. Information can be hard to make sense of when we are trying to digest too much of it or taking too big a swallow. Complex information, like complex processes, can be simplified by breaking it apart into simpler, more digestible pieces. This is an essential skill to develop and if it’s not your personal forte, it may be an opportunity to pull in key team members or senior leadership to help parse through data to make sense of the picture.
Building on this theme, collaboration is one of the keys to battling VUCA. The outmoded notion of the solitary leader whose unique genius doesn’t require any help or support is as out of date as pay phones and Blockbuster. Leading doesn’t mean going it alone, but rather having both the vision and the drive to treat collaboration as a smart resource.
And good collaboration also supports clarity among all team members in relation to the path forward. Talking through complex problems helps to break down that complexity and identify best next steps and helps avoid ambiguity by forcing communication and building a consensus approach.
Take another step and consider your own communication. Ask yourself, are your being clear and unambiguous when you present information to your team? What responsibility are you taking to ensure that you’re not introducing ambiguity into the equation?
The GROW model
The GROW model is a well-known approach designed to help create clarity of message and generate action-oriented and tangible outcomes. GROW is an acronym for goal, reality, options and way forward. Simply put, when applied to solving problems or setting goals, GROW ensures that you:
- Are clear on the goals you are seeking to achieve.
- Account for the current reality of the situation.
- Explore and consider your available options.
- Translate those options into meaningful actions for execution and a way forward.
In short, it helps to keep you honest as you pursue your goals, ensuring that you attend to your current situation and generate clear and decisive steps toward an outcome.
Taking steps to break apart complex situations and simplify next steps and carefully considering our messaging to ensure it is unambiguous and action oriented helps to combat uncertainty.
As a further safety measure, default to overcommunicating as opposed to under communicating. Ensure team members are apprised of goals and that action steps to accomplish those goals are well understood. Uncertainty lives in the silence between communication. When we assume our team members understand what we meant, or even what they are intended to do, we open the door for problems to enter.
Clear and decisive action derived from an honest assessment of the current situation and supported by strong communication is the best way to combat volatility. Volatility (like all-day, back-to-back meetings) will forever be a part of our business environment, but mitigating its impact is more in our control than we sometimes would like to admit.
By being willing to break down complex problems into manageable parts, by being clear and concise in our communication, by collaborating and benefiting from a broader perspective and by employing strategies like the GROW model to achieve clarity and rigor around our goals and our problem-solving efforts, we diminish the impact of volatility and increase the likelihood that outside, environmental determinants don’t dictate the outcomes to our business.
Now is a good time to take stock of how things are going. Is your business performing as you intended? Are your initiatives on track? Have you been able to convert strategies into accomplishments? How would you measure your development, and the development of your organization? Do you need help?
How Wipfli can help
Wipfli’s leadership development programs help leaders at every level cultivate a leadership mindset that empowers others to thrive. We can help you handle any VUCA-related challenges ahead.
Learn more about how we help clients with people, process and strategy on our organizational performance consulting web page or check out these additional educational resources:
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