It is inevitable that in our fast-paced, global, interlinking economy, we face constant challenges in the way that we do business. We face changes in conditions, attitudes and influences and a shift in pressure and expectations clients put upon us, whilst at the same time trying to manage and balance the needs of our shareholders and employees.
But how do we best rise to these modern challenges? Well, by adapting and responding to working in a modern environment. A modern “VUCA” environment. VUCA you ask? Yes, VUCA.
A term first popularised by the US military in the 1990s, VUCA has steadily made its way into our modern business vocabulary over the last decade. It stands for:
V – Volatility
U – Uncertainty
C – Complexity
A – Ambiguity
For the next three months I will explain the definitions of VUCA.
Its usage applies principally to ideas of strategic leadership and how understanding the VUCA environment can have a positive impact on the business decisions we make. From decision making and forward planning to risk management and problem solving, no matter the size or nature of a business, we are all working in a VUCA environment.
Let’s delve a little deeper and look at what we mean by V, U, C and A.
This Month: Complexity
When we talk about complexity we mean both the number of factors involved and the way those factors interlink.
Brexit is an excellent example. The volatility and uncertainty it provides is compounded by its complexity. In a way it’s a bit like a great big Brexit family tree (with all the falling out included). At the top we start with Brexit – it impacts on exchange rates, imports and exports and freedom of movement to name a few. And each of these factors in turn has numerous sub-categories – interest rates, inflation, unemployment etc – which can then be further broken up into multiple-facets and so on and so forth. It’s when you get down to the great-great grandchildren on our family tree that we can really see the day-to-day impact on ourselves and our businesses with more clarity.
Everything within our volatile and uncertain environment stems from the complexity of the world we live in – both the real, concrete, “Mother Earth” stuff and the virtual intangible world of the global capital markets.