VUCA: Training Managers to Deal with Uncertainty

"VUCA", an American Military Concept that Is Taking Hold in Business in Response to Uncertainty.

Is VUCA yet another acronym in the jargon of managers who are always fond of anglicisms? Beyond the fashion effect that these four letters generate, the "VUCA world " highlights the difficulty of making decisions in a complex and uncertain environment. VUCA is four terms: Volatility, Uncertainty, Complexity, and Ambiguity. In total, 4 types of issues that each require answers.

VUCA, an American Military Concept

VUCA is originally an acronym coined by the US military. In a VUCA world, the military has developed a "Light Footprint" approach. The objective of such an approach is to ensure national security while avoiding exposing its military contingents, nationals, and civilian populations to conflict on the ground. Intervention must be as rapid as it is targeted to avoid the risks of getting bogged down and collateral damage. The adversaries are multiple and their faces are few or sometimes even unknown, even virtual. Armed forces must therefore deploy new attack techniques that can no longer rely solely on traditional military stratagems but must be rapidly developed to respond to a specific situation.

VUCA, a Concept Applied in Business

Hans-Ulrich Engel, BASF's chief financial officer, uses the term to broadly refer to uncertainty in the managerial domain. "The best expression is that we live in a Vuca world. At present we have good visibility up to sixty days, a maximum of ninety. But that is it." Does this mean that the strategy of companies does not go beyond customer-supplier payment terms? In such a context, we understand the urgency of managers to find answers more. Why retain VUCA?

Many reasons can be given: first of all, companies are facing increasingly unstable environments. Economic markets, regulations, and technological developments make it difficult to gain visibility. Vuca allows us to characterize a situation and to propose possibilities. Failing to be a solution, allows the possibility of mapping uncertain situations and adding strategic axes to them.

VUCA or uncertainty in four words

Here is a map proposed by Nathan Benett, a professor at the Robinson College of Georgia State University in the United States, and G. James Lemoine, a doctoral student at the Scheller College of Business at the Georgia Institute of Technology to distinguish each of these situations.

This map allows us to locate each of the elements according to the degree of knowledge of the situation and information available and that of the ability to predict the results of the decisions that have been made.

VUCA Creates New Managerial Profiles

New decision-makers must be able to develop strategies in a very short time in response to unknown competitors in emerging markets. Uncertainty is reinforced by greater access to information, which is difficult to analyze, and by the evolution of new technologies, which make it difficult for companies to position themselves in the markets. Every strategic decision is therefore subject to the vagaries of the economic, legal, social, regulatory, political, and natural environment.

In this context, strategies are changeable in the short term, making operational planning difficult. The "VUCA world" requires anticipating the consequences of the solutions and actions carried out, analyzing diverse and divergent variables that hide new market opportunities. It's time for those who will be able to propose a "vision", capable of sensing buried trends and exploring unknown lands of the business world. And these new profiles of managers could well change the game because they will challenge the management patterns of current companies.

Confronted with the Volatility, the new leaders will propose a clearly expressed direction that will have to be understood by all the actors of the company. This ability to communicate with the entire business community is a challenge.

The uncertainty will lead them to be more of a listener, which means changes in management styles. Leaders will have to be able to ask, listen and watch while surrounding themselves with collaborators with innovative ideas, capable of modifying their proposals according to fluctuations both internal and external to the company.

As the complexity forces the group to restructure itself to find collaborative solutions according to the skills, experiences, and projections of each person, knowing that nothing is taken for granted and permanence is no longer in the direction to be taken, but more in the mutualized work.

This need is reinforced at all levels since leaders will have to show adaptability, both in the reorientations that will be necessary but also in their ability to attach to new groups and new networks. In this little game, networks are an asset to understand external partners characterized by their ambiguity.

VUCA, a Door To New "Business Models"?

It would seem so, as it is the ability to adapt and react that allows the company to come out on top. Some groups such as Zara or Netflix have even integrated it into their global strategic approach. Thus, Zara proposes a new collection of clothes every week in response to consumer volatility and uncertain consumer trends. As for Netflix, it uses its customer data to produce the scripts for the series (tell that House of cards) it offers for rent.

Business models will therefore have to integrate a greater degree of uncertainty and responsiveness. 3 main axes should be recurrent: technology, organizational agility, and collaborative model.

It is therefore on these new axes of competencies that the future managers of tomorrow will have to make their learning and their weapons. Training courses will then have to diversify their approach or even modify it in-depth (but in a Vuca mode, nothing is taken for granted, even in the field of training) to meet new markets.

Illustration

Lightspring, Shutterstock.com

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References

Bouée, Charles-Edouard. "Entreprise : comment faire de l'instabilité une force." La Tribune. Last modified January 21, 2014. http://www.latribune.fr/opinions/tribunes/20140121trib000810980/entreprise-comment-faire-de-l-instabilite-une-force.html.

Bennett, Nathan, and G. James Lemoine. "What VUCA Means for You." Harvard Business Review. Last modified January, 2014. http://hbr.org/2014/01/what-vuca-really-means-for-you/ar/1.

Also read:

Vaufrey, Christine. "New ADF Quality Criteria in an Uncertain World." Thot Cursus. 20 November 2012. http://cursus.edu/dossiers-articles/articles/19082/les-nouveaux-criteres-qualite-fad-dans/#.U5bMulh_ueZ.