AgileSHIFT® addresses the concept of VUCA, referring to volatility, uncertainty, complexity and ambiguity as a driver for change. The concept is used to describe the chaotic, turbulent and rapidly changing business environment that has become the “new normal” for organizations.
However, by focusing on each element of the VUCA acronym in isolation, and by better understanding its inherent nature, organizations can begin to distil a better way of working to efficaciously respond to change. Typically, VUCA delineates the dynamic nature of market forces in which organizations, in any sector or industry operate today. This dynamic nature (or its challenges) is characterized by:
- Volatility - refers to the nature, speed, volume, magnitude and dynamics of change in an industry, market or organization. The more volatile the environment is, the more and faster conditions change.
- Uncertainty - refers to the extent to which organizations can confidently foresee future events and issues that may adversely impact organizational performance. The more uncertain the environment is, the harder it is to predict.
- Complexity - refers to the multiplicity, diversity and interconnectedness of factors that organizations need to take into account. The more complex the environment is, the harder it is to analyse.
- Ambiguity - refers to a lack of clarity and difficulty of understanding exactly what the situation is resulting in a haziness of reality. The more ambiguous the environment is, the harder it is to interpret.
What is VUCA Prime?
VUCA Prime is a behavioural leadership model, first introduced in 2007 by Robert Johansen (a distinguished fellow at the Institute for the Future), to counteract each of the four elements of VUCA with a specific positive response. They are:
- Vision rises above Volatility — when conditions are changing unpredictably, leaders should keep focused on the desired target state and vision. The vision should be a compelling picture of the future that aligns stakeholders around the purpose of the transformation, the scale of the ambition and the nature of the benefits.
- Understanding reduces Uncertainty — when uncertainty is encountered, explore and experiment in order to increase understanding of external political, economic, social, technological, legislative and environmental (PESTLE) factors.
- Clarity counters Complexity — when faced with the unknown and unpredictable conditions that can only be understood in hindsight or retrospect, learn to simplify where possible as clarity informs decisions and decisions enable execution.
- Agility overcomes Ambiguity — when the future contains multiple alternatives, be ready to adapt the approach to match the desired outcome. Organizational agility is simply achieved by adopting the practice of collaborate, deliver, reflect and improve against agreed metrics.
In an ever changing dynamic, organizational leaders must change their approach. Navigating in a VUCA environment should not be seen as a problem that can be resolved, but as an ongoing dichotomy that must be effectively managed.
To survive and thrive, organizations need to take a broader perspective when making strategic investment decisions in a VUCA environment. Rather than simply react to change, organizations need to move towards a more proactive response to change.
Since the forces of VUCA and VUCA Prime exist in dynamic equilibrium, leaders must learn how to balance the energy of either side with its complement. The interplay of VUCA and VUCA Prime generates the productive energy state that can drive organizations to adapt, change and evolve to the conditions of their organizational environment by taking a multi-model approach to transformational change.