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Responding to environmental problems has always been a no-win proposition for managers, report Noah Walley and Bradley Whitehead in “It’s Not Easy Being Green” (May–June 1994). Help the environment and hurt your business, or irreparably harm your business while protecting the earth. Recently, however, a new common wisdom has emerged that promises the ultimate reconciliation of environmental and economic concerns. In this new world, both business and the environment can win. Being green is no longer a cost of doing business; it is a catalyst for innovation, new market opportunity, and wealth creation. A version of this article appeared in the July–August 1994 issue of Harvard Business Review.
Business is all about risk taking and managing uncertainties and turbulence.– Gautam Adani, Indian businessman. The business world has changed dramatically over the past few decades, and we now live in a connected society where change can be fast-paced, constant and unpredictable. Rapid advances in technology created an environment where the internet, smartphones, and social media are ubiquitous, and global events such as the 2008 financial crisis, the COVID pandemic, and, most recently, conflict in Ukraine, have increased the sense of turbulence, danger and unpredictability. A state of flux has replaced the sense of certainty, stability and familiarity that people were used to. This type of environment can be described using the "VUCA" acronym, which stands for "Volatile," "Uncertain," "Complex," and "Ambiguous." Click here to access a transcript of this video. In this article, we'll explore what VUCA means in more detail, and we'll look at how you can prepare for and deal with each of its elements, so that you can manage successfully in an unpredictable business world. What Is VUCA?The United States Army War College was one of the first organizations to use the VUCA acronym, following the 9/11 terrorist attacks in 2001. Military planners were worried about the radically different and unfamiliar international security environment that had emerged, so they used VUCA to describe it. VUCA stands for:
Bob Johansen, of the Institute for the Future, adapted VUCA for the business world in his 2009 book, Leaders Make the Future. He used it to reflect the turbulent and unpredictable forces of change that could affect organizations, and he argued that you need new skills, approaches and behaviors to manage in the face of the four VUCA threats. VUCA represents a set of challenges that individuals, teams, managers, and organizations in affected industries all have to face. Individually, these challenges can be significant, but they can be formidable when they're combined.
Despite its challenges, VUCA may not pose the same threat to all industries. For example, certain business areas may be more stable, protected or regulated. And, when you or your organization are proactive and set the agenda for change, you are less likely to experience the full extent of its threats. Why Is VUCA Important?Many people predict that volatility, uncertainty, complexity, and ambiguity are going to become more and more prevalent in the business world. To manage teams in the VUCA age, you should be aware of the changes that this kind of environment can cause. A VUCA environment can:
If your industry or organization is affected by this environment, you have to reconsider the way you and your business operate. How to Manage in a VUCA WorldAlthough VUCA might seem inescapable in certain industries, you can manage yourself, your team and your organization to mitigate its effects. You can even use it to your advantage. The key to managing in this environment is to break VUCA down into its component parts, and to identify volatile, uncertain, complex, or ambiguous situations. Each type of situation has its own causes and resolutions, so you should aim to deal with one at a time. In his book, Johansen proposes a framework that you can use to respond to VUCA threats, called VUCA Prime. He suggests that you should do the following: Counter Volatility With Vision
Meet Uncertainty With Understanding
React to Complexity With ClarityFight Ambiguity With Agility
Some people might be tempted to use VUCA as an excuse for a lack of action, planning or direction in their work. As a manager, it's important to be aware of sloppy work and to take appropriate action to resolve the problem. Benefits of Managing in a VUCA WorldIn an industry or organization that's affected by VUCA, you have a choice. Either you allow VUCA to "manage," overload and overwhelm you, or you accept and manage it, so that you and your team can mitigate its effects. When you decide to accept VUCA, you choose to make yourself and your people less vulnerable, and you empower everyone to deal with uncontrollable, unpredictable forces. Read our Privacy Policy |