A word that has been going around for some years, and is now coming around with increasing momentum especially in the business world is the acronym VUCA – Volatility, Uncertainty, Complexity, Ambiguity. VUCA was actually coined by the American military in their staff college in the late 1990s. But it really came into perspective after 9/11 and increasingly, has come into the business world as they have found that the same four components keep pushing the buttons in this place as well. Volatility, Uncertainty, Complexity, Ambiguity.
Thomas Friedman wrote a book quite a few years back, which was quite a game-changer. It was called "The World Is Flat" and some of you may have read it. What he was talking about at that time was that the world is changing and changing at a remarkable speed. He says, "The speed of change is overwhelming. Basically, there's a flattening process that is happening across the world at a warped pace and unless you're ready for it, it's going to take you by surprise and knock you askance. You're going to get taken out of the equation."
As I looked at VUCA and at what Friedman was saying, I wondered how that would relate to us. What do we need to be aware of? Unilever, in 2010, one of the largest consumer goods companies, pledged to double the size of their business in the next 10 years. The reason was this, as Keith Weed, interviewed by Avi Dan on Forbes said, "We look at the world through a lens which we call VUCA which stands for Volatile, Unstable, Complex and Ambiguous. So you can say – It's a very tough world." Sometimes, that's our knee-jerk response to things that are happening around us. Or, he says, "You can say it's a world that's changing fast and we can help consumers navigate through it. Two and a half billion more people will be added to the planet between now and 2050 of which 2 billion will be added in developing countries. The digital revolution, the shift in consumer spending, all this suggests that companies have to re-invent the way they do business."
At Unilever, they've taken up the challenge. In fact, it has been reflected in a change in their leadership development models as well. But I liked what Weed said. "Either you can look at it and say, 'Wow! It's a very tough world,' and then, it can pass you by. Or you can jump on that bus and say, 'It's a fast changing world, but we can help consumers navigate through it'." remember, that what's happening with your companies as you are in direct connection with consumers, the consumers are also facing. They are also facing this volatility, this uncertainty, this complexity and this ambiguity. It is up to business models to help consumers navigate through it. As Weed says, "By 2050, two and a half billion more people will be added. It's up to companies who connect with consumers to be able to say, 'We're not going to sit out on this one; we're going to see how we can navigate through it and how we can bring some kind of clarity to it.'"
So, what is VUCA?
· Volatility is a time when prices fluctuate, say after a natural disaster, or even after elections that have just happened in India. There's been such a state of flux, not too much investment, everyone cagey before and then suddenly, everybody has a renewed sense of hope and so there's a better investment happening, money coming in, etc. All of this has to do with the volatility of the situation.
· Uncertainty: Every time you develop a strategy, there's the uncertainty that the opposition is going to have another strategy that will muddle what you are doing. In that situation, the only thing that you can do is to collect more information, interpret it, share it. But the uncertainty remains.
· Complexity: this has to do with doing business in many countries with unique regulatory environments, tariffs and cultural values.
I was just reading in today's paper about Amway's CEO who has been jailed. Their main person Samir Behl, regional president for Europe, India and South Africa has come in and has been negotiating for the release of Bill Pinckley who has been jailed for various reasons. Amway is one of the top 5 direct selling companies in the world. Yet, they are finding out that it is a complex market here in India – complex rules.
· Ambiguity: You decide to move into immature emerging markets, launch products outside your core competency and everything is ambiguous. The causal relationships are unclear.
Today I read that Aziz Premji of Premji Invest is going to go out and invest in markets outside India, almost 2500 crores. That's into an ambiguous market. There is uncertainty in emerging markets but that's the world that we live in. in this kind of world, it's not the time to step back but a time to step forward and move forward saying, "What do I do in this particular situation? How do I act in this situation?"
Dr. Jonathan Woodson, US Assistant Secretary of Defense, was discussing 'Strategic Leadership in a VUCA World' at the Harvard School of Public Health. This video is on YouTube. He says, "How do you manage in the VUCA world?" Then he asks another question, "How do you eat an elephant? One bite at a time. How do you look at a massive program? You break it up into smaller components. Lay out the series of facts and variables. Then approach each one with incremental solutions. That's the way that you need to handle it. One word that I have taken out of my equation – I never allow senior leaders to talk about it – that's the word FRUSTRATED. Never be frustrated with a situation that is around you. What it communicates to people around is that you don't have an answer, that you are stumped. That is not a condition you want to pass on."
"The second thing that you can do is to be able to communicate clearly in this kind of a setting."
I loved an article that was in today's Economic Times entitled, "What's Your Communication Quotient?" The author Prabir Jha says, "You've got to have a good communication quotient. The way you communicate often impacts brand perception of your organization, especially in this new VUCA world. It's a shrinking world but it's a world that we have to embrace because that's the world that we live in."
I was reminded of Indra Nooyi when she was asked what are the important things that she has learnt in her lessons. She responded, "One of the keys is to be able to communicate, and communicate clearly." How true! You've got to be able to communicate clearly in a situation like this.
What would you communicate? Kirk Lawrence, who is Program Director at University of North Carolina Business School, has come out with another acronym VUCA but which has a different nuance to it. It stands for Vision, Understanding, Clarity and Agility. He says:
· Volatility can be countered with vision. It's even more vital in turbulent times.
· Understanding can counter uncertainty. It's the ability to stop, to look and to listen.
· Complexity can be countered by Clarity – a deliberate process to try and make sense of the chaos.
· Ambiguity can be countered with Agility – the ability to communicate across organizations, to move quickly, to apply situations – to be agile in these situations.
So, a couple of ways how to work your way through a VUCA world. It made me think about the world. I remember looking at our Scriptures and being reminded that God doesn't stir us up into confusion. He brings us into harmony. In the midst of all this confusion, in the midst of seeming chaos, in the midst of this volatile, uncertain, complex, ambiguous world, God brings stability. In fact, He says that the peace that he gives is a peace that passes all understanding. So while 2+2 might add up to 4 in this world and cause 4 different variables, in God's world, it is a no-brainer. It's a non-starter. He starts with a peace that passes our understanding. We don't understand it, but He gives it to us. I like that! In a VUCA world, where it's volatile, uncertain, complex and ambiguous, God brings wisdom and peace and stability. That's my prayer for all of you.
Can I pray with you? Almighty God. Bless each one on this call. Give to them your wisdom. Give to them your clarity, Your purpose. Give them the peace that passes all their understanding and help them to walk confidently through this world, through all their situations of uncertainty and volatility and bring them to places of harmony and stability and great wisdom. In Jesus' name we pray. Amen.
• Nathan Bennett and G. James Lemoine, "What VUCA really means for you." hbr.org/2014/01/what-vuca-really-means-for-you/ar/1
• Kirk Lawrence, Program Director, UNC Kenan-Flagler Business school, "Developing Leaders in a VUCA Environment." http://www.growbold.com/2013/developing-leaders-in-a-vuca-environment_UNC.2013.pdf
• Thomas Friedman, "The World is Flat."
• Dr. Jonathan Woodson, "Strategic Leadership in a VUCA world." https://www.youtube.com/watch?v=72AzCY45fKU
• Keith Weed, Chief Marketing & Communication Officer, Unilever, in and interview with Avi Dan of Forbes. http://www.growbold.com/2013/developing-leaders-in-a-vuca-environment_UNC.2013.pdf
• Aziz Premji, Premji Invest
• Samir Behl, Regional President, Europe, India & South Africa, in India to see how to get their India CEO, Bill Pinckley out of jail.
• Prabir Jha, "What's your communication quotient?" http://economictimes.indiatimes.com/opinion/guest-writer/leadership-is-not-a-solo-sport-whats-your-communication-quotient/articleshow/35975712.cms
• Biblical references: 1 Corinthians 14:33 and Philippians 4:7
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