The new VUCAD world: How to Respond to its Challenges

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by - Alan Caugant, CEO SUPERHUMAIN™

VUCAD is a chaotic, fast-paced business environment that has become a new reality. This reality is transforming not only the way companies do business, but also the model of leadership behaviour.

 

What is VUCAD?

The acronym VUCA (volatility,uncertainty,complexity, ambiguity, diversity) characterizes the changeable and complex environment of the modern world, where there is no guaranteed stability. The term was coined in the 1990s by the US military, and today it is used in the business environment to refer to the conditions in which companies operate.

 

Volatility is characterized by unstable situations and unpredictable changes - in nature, speed, volume, dynamics. The duration of this state of affairs is unclear. Many businesses are now operating in volatile markets with rapidly changing circumstances.

 

Uncertainty means a lack of information to predict the consequences and plan the necessary actions. What was once considered incontrovertible is no longer valid, and leaders can no longer base their decisions on past experience. For example, the expected means a lack of information to predict the consequences and plan the necessary actions. What was once considered incontrovertible is no longer valid, and leaders can no longer base their decisions on past experience. For example, the expected market entry of a new competitor's product calls into question the future of the business and market.

 

Complexity implies situations where there are many interconnected elements and a huge amount of information. Such a large number of factors significantly complicate the decision-making and planning process. For example, entering international markets involves following numerous rules and regulations.

 

The ambiguity is determined by the lack of a clear understanding of the rules of the game. Sometimes this is due to situational novelty and doubts that can arise when trying to make decisions in a new context. The shift from print newspapers to digital media is an example of a new business model and an ambiguous situation where customer behaviour in a new environment is not fully understood.

 

The diversityincludes all aspects of an individual contributing to building an organization: cognitive diversity, gender balance, plus cross-cultural and intergenerational diversity defining each individual as unique person.

 

Instability, uncertainty, complexity, ambiguity and diversity have come to define the digital economy as an extremely destructive environment and a potential threat to growth-oriented companies.

Therefore, finding "leverage" for a breakthrough is a key component of the strategies of successful companies. And more often than not, this "lever" has the nature of the latest technology. 

 

The rate of change in many industries is now much faster than it was ten or twenty years ago. With digital technology and changing customer needs, this increased volatility is real for many companies.

 

Before the pandemic, many may not have paid attention or seen examples of threats to the economic balance. The chaos that reigns as a result of rapid, unforeseen changes will build up for years to come.

 

Living in chaos means being flexible and willing to change your mind, drop past beliefs, and then drop them over and over again. Thus, movement and change become part of the DNA of any of us - the guarantor of antifragility.

 

However, the sense of uncertainty is as old as the world. The current situation is hardly more complicated than during the plague or World War.

 

How we perceive the world as more uncertain and ambiguous depends largely on our ability to cope with its volatility and complexity.

 

How to live in uncertainty

Entrepreneurs and specialists can only treat the changes in the world as a normal existence: movement = life.

“When life gives you lemons, make a lemonade” may sound like advice from the captain, but new conditions mean new opportunities. They are definitely worth using, especially if the previous features are no longer available.

 

It is important to remember that everynew day = new meThis means that you should not postpone development until "next year" or "Monday." Getting started is always difficult, so it’s worth making it a habit to develop and make mistakes. So you don't have to experience a cold start every time.

 

In a post-coronavirus world, the ability to work remotely helps companies survive: it means that it is worth mastering a profession that allows you to do this, or digital tools in the current profession or business.

 

Projects speak better than words. Today, it is worth collecting a portfolio not only from work projects, but also from pet projects or hobbies, if professional skills are used in them.

Don't quit your job to learn. By asking yourself a drive, it is easier to join a new activity when it ends. A new job is always stressful, even if it is associated with the joy of applying successfully acquired knowledge.

 

When determining the learning path, it is better to choose skills that will be applicable in different scenarios of the future - universal, metaskills. They will be useful both in a crisis situation, when it is important not to cling to a straw, but to move on your own, and in a quiet time - what is valuable is what you can and can apply, and not just know.

 

VUCADPrimemeeting the challenges of the VUCAD world

To effectively interact with the VUCAD environment, it is important to develop appropriate skills. The managerial competencies that distinguish VUCAD leaders are described by Bob Johansen in Leaders Shaping the Future: Ten New Qualities for an Uncertain World The author - a scientist fromInstitute for the Future says that the leaders of the new generation are distinguished by            ision (vision), Understanding (understanding) larity (clarity) gility (speed) D ivergent thinking (cognitive flexibility, creativity)- the VUCAD Prime model.Prime.

 

Vision counteracts volatility

In hectic times, shaping the company's vision for the future is more important than in normal times. This will help withstand turbulence, crisis, or withstand competition. It is also important that employees also understand where and why the company is going.

 

Understanding counteracts uncertainty

To identify new opportunities, the leader needs to go beyond the boundaries of his competence. It is important to be flexible and communicate with employees of different levels. And here soft skills play an important role, in particular communication skills and empathy.

 

Clarity counteracts complexity

In the VUCAD environment, chaos ensues quickly and violently. It is necessary to quickly determine which strategic directions to focus on in order to get out of the crisis situation as soon as possible.

 

Agility counteracts ambiguity

Speed refers to the ability to communicate effectively, make and execute decisions quickly.

Hiring flexible leaders is not enough for a company to live in the VUCAD world. It is important that they create a VUCAD culture that is focused on innovation, adaptive behavior and thoughtful risk-taking.

 

Divergent thinkingcounteracts diversity

An important aspect of innovative problem solving is ideation. Ideation renders diverse ideas to emerge, a combination of which can be used to solve a given problem. It allows your team to explore multiple solutions, and more importantly to realize that usually there is no “one correct answer” to a given problem by leveraging their diversity: the activities allow them to change their point of view, avoid unnecessary assumptions to find multiple, imaginative, intuitive, as well as common-sense solutions.

 

As you can see, developed soft skills play an important role in the VUCAD world. The importance of soft skills has been proven by many studies. For example, 92% of LinkedIn respondents equated the importance of soft skills with hard skills ..

 

The role of curiosity in the development of soft skills for the VUCAD environment

The word "curiosity" comes from the Latin "cura" - "care, attention". It means inquisitive thinking and manifests itself in the form of studying and learning something new. Curiosity is a driving force not only in human development, but also in science, language and industry.

Curiosity helps to accelerate exploration, be open to new experiences, creative problem solving, build resilience to uncertainty, and collaborate and learn. All this makes it possible to develop the basic soft skills - empathy, situational and interpersonal adaptability, cross-cultural sensitivity, logical thinking.

 

Let's look at specific examples of why a business benefits from cultivating curiosity among its teams.

 

Generation of ideas

Curiosity helps employees become more engaged, generate new ideas, and share them with others,according to a survey by business school INSEAD and SurveyMonkey . SurveyMonkey73% of those surveyed who are interested at work admitted that they "exchange ideas more" and "generate new ideas for their organizations."

 

Growth mindset

Curiosity is characteristic of a growth mindset, such as transforming failure into learning opportunities and choosing activities that improve current skills and develop new ones.

Companies that adhere to a growth mindset and create an environment conducive to failures will benefit.

 

Companies with a healthy learning culture are 92% more likely to develop new products and processes, are 52% more productive, and 17% more profitable than those without a culture of learning.  

 

This means that professionals from different disciplines who develop a growth mindset are better able to adapt to the VUCAD environment. In particular, to the consolidation of the industry, technological, regulatory and geopolitical shocks, as well as to shifting consumer preferences.

 

Curiosity has become the new gold rush. When looking for employees, companies are waiting for employees who are open to new knowledge, and in different areas - from a sales manager to a data analyst.

 

There is a shortage of employees with creativity, communication skills and adaptability.

 

But not everything is simple even in those companies where there are such employees. According to a survey by INSEAD and SurveyMonkey, 83% of senior executives believe that curiosity is encouraged “very strong” or “good” in their company, while only 52% of employees agreed.

 

About half (49%) of top executive leaders say that curiosity is rewarded with pay increases, but 81% of employees said that inquisitiveness does not significantly affect their income.

This is a big problem for business: if employees do not see the value in curiosity, then they are less likely to use new information in their work.