Leading in a VUCA World


Are you ready to lead your organization in a VUCA world? This was the topic of discussion at the latest Ivey School of Business QuantumShift program I recently attended with a number of other entrepreneurs. And the honest answer for me was, no.

VUCA is fairly new military term that stands for Volatile, Uncertain, Complex and Ambiguous. It was first used to describe the new type of wars that were being fought around the world. The main premise is that you can’t predict what’s going to happen, therefore you need to adopt new strategies, techniques and structures to deal with these new realities. The same is true for the business climate today.

New trends, as well as the rate of change, are affecting the world in ways that are impossible to predict. Megatrends that shape the future include resource scarcity (water, fossil fuels, and food), the aging population, rapid growth of the digital age, globalization and the fight for countries to provide stable economies, and finally the consumption growth of developing markets. These are massive topics in and of themselves and they don’t typically make their way onto the agenda of smaller organizations, but they will create “turbulence” for your organization one day and as a leader, there is no excuse for not being prepared.

Preparation is about:

1. Knowing how and when to change your business model
2. Creating the right attitude for change within the organization
3. Building the organization in a way that can react and respond to
complexity quickly

Dr. Andreas Schotter used the “5 Key Adaptive Advantages” from the Boston Consulting Group article that outlines the strategies of the most adaptive companies today including 3M, Apple, Google, and others. The idea is to learn from these organizations and to infuse some of these advantages into your own culture and strategic processes regardless of your size or resources:

• Signal Advantage
The ability to read and act on change signals in the world. What are customer/consumer trends that could affect your products or services? What are the signals of change in your industry that you should monitor? A leader should devote three days each quarter to long-term strategy and keep a file or process for tracking and monitoring these trends. Investing in market research on a regular basis is also a critical step to ensure you see changes in behaviour before it hits sales.

• Experimentation Advantage
The ability to experiment rapidly and economically to learn new and better ways of coping with change. How do you currently test new ideas and techniques? Can you create a committee or task team that is experimenting with new innovation outside the regular revenue stream and hierarchy?

• Organizational Advantage
The ability to organize in ways that promote adaptation, including enhancing knowledge flow, diversity, risk taking, collaboration and flexibility. Is your organizational structure flexible enough to adapt to change quickly? Are you a learning organization? How do you capture and disseminate learning?

• Systems Advantage
The ability to harness the diversity and adaptive potential of multi-company ecosystems. Is there a new model of delivering value to customers using technology or strategic partners vs. bringing talent in-house? Can you create joint ventures to deliver new value? What about work with competitors? How are you ready to use analytics and big data?

• Eco-social Advantage
The ability to continuously adapt the business model to changes in the ecological, social, and economic spheres over the short- and long-term. Can you change processes or suppliers to reduce reliance on specific materials? For example, Coke created the PlantBottle which is created using up 30% plant materials in their PET plastic. Can you meet the needs of an ageing population or develop new products that can be used in developing markets and purchased with a cell phone?

Implementing these advantages within your organization will take time, resources and risk. In my experience, waiting to act has never produced the right results—in order to survive in a VUCA world, you will need the initiative to move forward and embrace change.

Good luck!