Although the need for people to adapt is nothing new, the dynamic changes underway in firms and markets are both qualitatively (scope of change) and quantitatively (pace of change) different nowadays – and therefore demand new ways of working, thinking, innovating, and collaborating.
Four factors (VUCA) determine the leadership and resilience capabilities that all organisations need to succeed:
Volatility – the nature, speed, volume, magnitude, and dynamics of change: This type of challenge may be unstable or unexpected, but it’s not necessarily hard to understand because knowledge about it is typically available.
Uncertainty – the lack of predictability of issues and events: Often, this type of event’s basic cause and effect may be known – so change is possible, but not a given.
Complexity – the confounding of issues and the chaos that surrounds organisation: This situation has many interconnected variables – some information may be available or can be predicted, but the extent or nature of the situation overwhelm people.
Ambiguity – the haziness of reality and the mixed meanings of conditions: Causal relationships are totally unapparent, creating a situation of “unknown unknowns”.
Sources: Bennett, N. & Lemoine, G. J. (2014) What VUCA Really Means for You, HBR, Jan-Feb; Kisinger, P. (2014) Adaptive Leadership for the VUCA World: A Tale of Two Managers, Thought Leadership, Thunderbird School of Global Management.
Action Point
Reflect on your organisation’s approach to managing the “VUCA” factors – what human and technological capabilities have you built? Which VUCA factors present the biggest threats to your organisation’s business and innovation strategy?