What is in this article?:
Volatility, uncertainty, complexity, ambiguity. Thanks to the U.S. Army, we have a handy acronym for the set of conditions and drivers facing virtually every business today.
While last year’s earthquake and subsequent tsunami in Japan brought special attention to the impact of natural disasters, VUCA reaches beyond Mother Nature. VUCA is a truly dynamic term encompassing technological disruption, transitory advantage, fractured markets, multifarious competitors, global economic conditions, unstable governments, political unrest, volatile financial markets, and fickle consumers. Each of these factors drives their own special brand of complexity and uncertainty. However, when such events occur simultaneously, their impact is complex and profound.
Against this backdrop of exponential change, it’s easy to become overwhelmed and highly risk adverse. This is especially true for control-oriented executives who believe that efficiency is the only path to high performance and that improvement requires control and predictability.
But the history of growth has been built on a yin/yang of two essential conditions. First: a capacity to nurture and develop new ideas against the gravitational pull of the status quo. And second: an unpredictable environment that forces and accelerates the need for new combinations.
A capability to continually make sense of a changing environment and seek out new and novel ways of creating value requires a growth mindset; a belief in the competitive advantage offered by agility and the rewiring of the hard and soft organizational capabilities – structures, processes, technology, skills, behaviors, etc. – to survive, adapt and thrive against a backdrop of change.
This growth mindset, the capability to change and adapt, is often at odds with the compulsion and pressure to continually tighten our grip and drive greater efficiency from our current systems, processes and ways of doing things. The paradox is, the further we drive the control mindset – as we eek out every last drop of efficiency from a given way of working – the more fragile we make it in the face of new, different or unexpected shocks and events.
Caltech research scientist John Doyle coined the phrase Robust-yet-Fragile to describe complex systems that are resilient in the face of known or anticipated conditions, but highly susceptible to unanticipated threats or shocks. By definition, a VUCA world delivers more capricious, more extreme, and more unexpected events and conditions.
Turning this to our advantage requires a recalibration of how we develop, deploy and deliver our strategies and business objectives, and the planning and execution processes that support them. Approaches that have previously delivered improving efficiency quickly reveal their inbuilt but implicit fragility, surfacing critical trade-offs between control and fragility on the one hand and growth and robustness on the other.
Today’s VUCA environment can actually add up to a competitive advantage for organizations that are suitably prepared. Following is a snapshot of the mindsets, models, examples and take-away questions for evolving your organization from one conditioned for control to an ecosystem that powers growth.