Our world is increasingly interconnected and dynamic, fueling fast-paced changes. And if you’re not shifting some aspect of your business today, you’ll probably be shifting something tomorrow. According to a Deloitte survey, 81% of respondents believe that today’s environment requires leaders to navigate more complexity and ambiguity.
This corporate atmosphere is almost a textbook definition of the often-repeated acronym “VUCA,” which stands for volatile, uncertain, complex and ambiguous. Here’s why: The markets are moving quickly, making it hard to know what the future holds. At the same time, a variety of economic, social, and political considerations are colliding to increase the complexity of forming relationships with stakeholders, from employees to consumers. As such, it’s tough to figure out how to proceed, especially when critical data isn’t always available.
As business leaders, we can’t stop the current VUCA environment from affecting us. However, by employing both business strategy and leadership, we can develop thoughtful processes and protocols to mitigate the overarching effects of VUCA. Armed with a new approach that fits today’s unique business situation, we might even be able to advance our brands by viewing the VUCA model as a foundation for opportunities.
Successfully Navigating a VUCA Business Environment
Understanding today’s VUCA environment and utilizing it successfully offers a chance to improve operations and experiences in the workplace. That’s why my company has implemented a few VUCA business strategy practices to ensure we can react and adapt to the swirling VUCA business environment.
One of our most rewarding changes has been at the governance structure level. Instead of relying on positions and titles, our employees arrange their duties based on roles. Not only does this foster an autonomous work environment, but it also allows for role overlap and additional resource fluidity. Consequently, if an employee leaves, their position doesn’t have to be filled. Instead, we can just plug in role gaps.
From a business leadership structure standpoint, a roles-based organization takes away the need for managers. It also enables companies to easily modify their organizational structures. Every four weeks, for example, we search for areas of tension throughout the organization. If spots of tension are found, we review and adapt our team members’ roles to alleviate the burden or uncertainty. This keeps our organization evolving incrementally, which is a major asset in a VUCA world.
How to Develop a Sustainable Business in a VUCA Environment
If you’re finding it hard to thrive or stay ahead of the competition because of the current VUCA environment, you might want to make shifts, too. Even if you don’t embrace a roles-based setup as our company has, you can follow other techniques to become more adaptable and resilient:
1. Identify fail criteria.
One practice that we’ve found valuable is something we call TAFL. This stands for think big, act small, fail fast, and learn rapidly. But it can’t work unless we define the fail criteria for each project or task.
Identifying fail criteria isn’t a common practice in most organizations. Often, companies look for success criteria. Yet, waiting for success can mean squandering precious time and resources. When you know the signs of failure, you have a better idea of when to stop an initiative.
2. Treat business plans as living documents.
Do you look at plans and objectives as something to work toward? Revise your mindset to see them as temporary roadmaps that give you here-and-now direction and alignment.
Every 90 days, review all the plans you have in place. Ask yourself if they still make sense to follow. Do you need to change your KPIs, for instance? Seeing your plans as tools rather than set-in-stone criteria reduces your chances of getting too locked in.
3. Lead for the complex, not the complicated.
Are you leveraging practices from the complexity space or the complicated space? There’s a difference. In a VUCA world, you need to operate in highly complex environments, not just complicated ones that respond to traditional corporate structures and planning systems.
The bottom line is that classic leadership ideas work well for complicated environments. The problem is that they aren’t responsive enough for complex, VUCA-heavy ones. So, make sure you have complex system tools that allow you to be co-creative, iterative, and experimental. Focus less on leading through rules and aim for principles-backed empowerment and autonomy among your team.
4. Measure progress diligently.
The only way to know if you’re moving in the right direction is to measure your progress relentlessly. Again, this is why our fluid organization structure is routinely revisited and, if needed, revised. You can’t be afraid to listen to what your analytics and team are telling you.
It can be uncomfortable for employees and executives to get used to a silo-less culture. Showing everyone why rapid changes are needed based on accurate information helps them feel more invested. For instance, you might find that communication channels aren’t clear between your remote and in-office workers. Revising your internal practices right away to prioritize frictionless communications will lessen the likelihood of problems and improve your ability to soar despite VUCA’s challenges.
How does VUCA impact the world of business? A better question might be, “How doesn’t VUCA impact the world of business?” But don’t give in to the notion that there’s nothing you can do to overcome VUCA’s obstacles. By making small changes, you can lead successfully no matter how volatile, uncertain, complex and ambiguous the world becomes. At the same time, you can fully enjoy the many opportunities available in a VUCA environment.