We live in a “VUCA world.” It is a phrase that has taken on new meaning since the pandemic.
VUCA stands for volatility, uncertainty, complexity, and ambiguity. Volatility is the dynamic rate of change; uncertainty is a lack of predictability and information; complexity describes interdependent systems that do not exhibit clear cause and effect; and ambiguity acknowledges the difficulty of accurately assessing reality in a complex and volatile landscape. VUCA is dynamic and situational—sometimes things can be fairly clear but then suddenly shift due to outliers, adjacencies, and disruptions. Arguably, leaders today face an extended period of rising VUCA.
- Volatility is the dynamic rate of change. As the pace of our world increases, what we need to do to be effective in it is constantly changing.
- Uncertainty is the lack of predictability and information. It is the “fog of war” we face. While it would be nice to have clarity on what to do, we rarely know what our customers want and what our competitors are doing and how they will respond.
- Complexity describes interdependent systems that do not have apparent cause and effect. Your company, your clients, and even your competitors comprise a system that interacts with each other, but for which many of the relationships can’t be seen or well understood.
- Ambiguity acknowledges the challenge we have in understanding and assessing reality. It is hard to know what is going on and what we need to do to improve it.
These ideas are not new, but they have become more and more apparent. Old ways of managing no longer work well. They appear rigid, unresponsive, and fragile. The DA Mindset and guided continuous improvement offer approaches to this continuous, dynamic change we face.
The term “VUCA” was first used in 1987, drawing on the leadership theories Warren Bennis and Burt Nanus. It an effective way of introducing the ideas of uncertainty and complexity to executives because it describes it in terms they can relate to.