VUCA – Volatility, uncertainty, complexity and ambiguity

Recognising that change is the only constant, shows us the path to VUCA. VUCA is the acronym for volatility, uncertainty, complexity and ambiguity. VUCA stems from military vocabulary and has been emerging in ideas on strategic leadership. The 4 elements of VUCA offer a context in which organisations view their current and future state. On a strategic level who isn’t interested in preparing for a volatile, uncertain, complex and ambiguous future?

There is an easy overview of VUCA on HBR.

Volatility

Volatility basically means that things tend to vary often and widely. The word comes from the Latin word volare, which means “to fly”. In a world were things seem to change faster and faster, stability can’t be attained. During the financial crises and economic turmoil of the last years people kept asking: “When will things be stable again?”. Could be that unstable and turbulence are here to stay.

Uncertainty

In past decades we build our lives on certainties and security. There were things that we could always count on. Nowadays, the uncertainties and the level of uncertainty keeps growing. Think of the economy, technology, whether companies will survive, how markets will evolve. In all these fields things are happening that very few of us have imagined only a decade ago.

What happens in our world and business gets harder and harder to predict. Known cause and effect relations need reevaluation and seem to have turned more complex and with a larger number of factors. We have to dig deeper to solve these unknown cause and effect relations.

Complexity

To properly understand the world we live in and perform our business we have to move beyond lineair models. Although models are getting better, they are based on an overwhelming number of interconnected parts and variables. This to such an extend that even though computers running these model have become better and faster, results and predictions haven’t. Think of the search for better medicines: the money invested is growing incredibly faster than the results we’re getting. Check eroom’s law (Moore’s law reversed) “the cost of developing a new drug doubles every nine years”.

Ambiguity

Ambiguity basically means that you can interpret a thing or situation in more than one way. The explanation and/or interpretation depends on context. This demands us to look at the whole picture to understand what lays in front of us. There is an unclear cause and effect. We can’t come up with a straight answer. There is a strong need for interpretation in context.

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