The term VUCA stands for Volatility, Uncertainty, Complexity and Ambiguity and was first coined in the early 1990s. It was initially introduced by Herbert F. Barber as a concept for strategic business management, but it also reflects the problems currently facing business owners and managers.
Businesses are operating in extremely uncertain times; dealing with complex issues including cyber security, sanctions due to international conflicts, rapid changes to health policies (particularly after the Covid-19 pandemic) and disruption to global trade. VUCA 2.0 has been designed as a framework for businesses operating in today’s uncertain environment...
The ability to set a clear vision is vital. As part of the vision for the business, owners/managers must provide clarity around the firm’s mission, values and strategy so that everyone is pushing in the same direction, despite the chaos that may be unfolding in the world around them.
An in-depth understanding of the firm’s capabilities is required in order to determine an effective strategy which takes advantage of rapidly changing circumstances. A business should continuously engage with customers, employees and market participants in order to fully understand the changes that may be unfolding in the market.
In uncertain times, owners/managers need the courage to step up, face new challenges and make decisions. There is more risk in doing nothing and relying on “doing what we have always done in the past”. The most successful businesses will be those who embrace change and are bold enough to drive forward through tough times.
We have all learned to be more adaptable due to the Covid-19 pandemic. Strategic planning is all well and good, but those plans need to be flexible in order to adapt to changing external forces. Contingency plans need to be in place for when things change, and in the current environment, things can change fast.
The current volatility looks set to continue for some time. As such, businesses who stay focused on their vision and overall objectives, while being flexible enough to adapt as things change, will be the ones who succeed.