VUCA: Volatility, Uncertainty, Complexity, and Ambiguity

I was listening to someone give a presentation on economic trends recently, and he mentioned that it is a VUCA world and the forecasts he was presenting should be understood in that context. I never heard of VUCA and assume that many others may not be familiar with the term. It stands for Volatility, Uncertainty, Complexity, and Ambiguity. The presenter then went on to give examples of VUCA such as Europe, oil, Iran, and political issues in numerous countries.

Whether you have heard of this term or not, the question is the same. Is it possible to tell with reasonable certainty what the economic environment will be like a year from now? Can anyone know where Housing Starts will be headed? It seems many folks are convinced you cannot know. Those of you who have seen an ITR presentation anytime in the last few months know that 2011 tracked as we had forecast despite all the VUCA.

You can know what the future holds by knowing where to look and by understanding what the indicators are saying. Brian and I explain it by using a seafaring analogy. Sea captains under sail could tell when the weather was changing without the use of modern instruments because they knew how to really look at their surroundings. They could tell when to take in sail and to unfurl sail to the wind, and they did so with great confidence.

We know where to look, and we are pleased to share some ideas along those lines now and during our presentations. Here is a list of seven items to track:

Money Supply
U.S. Leading Indicator
Purchasing Managers Index
Retail Sales
Employment
Nondefense Capital Goods New Orders
U.S. Industrial Production

Our team performs the analysis and makes the results available through our publications, presentations, and sometimes, our Twitter feed. We do this so you will have the confidence to act in your company's best interest. People in a VUCA world must find it impossible to make a decision with any confidence. You and I can make decisions with a 94.7% confidence rating. We can prepare for what will be happening in the global economy.

The old proverb is still true. We may not be able to change the wind, but we can adjust the sails.