5 Tactics to Adapt Your Business to a VUCA World

To survive and thrive in a Volatile, Uncertain, Complex, and Ambiguous world, businesses must change how they work. Purpose, Transparency, and Agillity are key.

Joyce Kettering
July 21, 2021

5 Tactics to Adapt Your Business to a VUCA World

Joyce Kettering
July 20, 2021

Not so long ago, "five year plans" were a thing. A popular thing.

Long-term planning, fixed objectives, vertical structures, and hierarchies, you know the drill. Maybe you worked under those structures. But something changed... significantly.

Call it an exhilarating jump in technology or globalization, but things definitely sped up and became not so easy to predict.

That's where the VUCA acronym comes in.

Very trendy, very real, VUCA is short for Volatile, Uncertain, Complex, and Ambiguous, usually applied to the context we live in.

VUCA stands for Volatility, Uncertainty, Complexity, and Ambiguity

These four characteristics of our VUCA world are not one and the same, but they tend to come hand in hand in different degrees.

The more complex and volatile an industry is, for example, the harder to predict and, therefore, more uncertain it will be. What varies mainly is how much you know about the situation and how accurately you can predict the possible outcomes.

Here's a chart from the Harvard Business Review by Nathan Bennett and G. James Lemoine that illustrates it perfectly:

Characteristics and examples that explain what each piece of VUCA is and how organizations can face it.n

The concept of a VUCA world was introduced by the military but has been widely adopted by organizations and for-profit corporations as a starting point for strategic leadership.

Wait... VUCA is a starting point for strategic leadership?

Yes. Yes, it is.

To carry out a successful business strategy in a VUCA environment, leaders must embrace what they don't know, and accept that things may quickly change. This has become a huge part of strategic planning.

To deal with the volatility, uncertainty, complexity, and ambiguity of the business world, the strategy and implementation of any work plan need to be flexible enough to adapt and maneuver.

This is where Agile work comes in.

Working Agile (or Inverted VUCA)

We now know what VUCA is but still have no clue as to how to deal with it.

Uncertainty is a part of life, but it's not that great in a work environment. This is why in a VUCA environment – where tasks vary, people rotate, and the market is competitive and therefore draws our constant attention as to how it changes and where it's headed – an Agile Work Methodology is key.

There's something we could call inverted VUCA, or simply the other side of VUCA, that lists the type of values that can help business leaders navigate uncertainty:

  • Vision (or strategic foresight and good leadership),
  • Understanding (thanks to data analysis, brainstorming, empathy maps, market research),
  • Clarity (the ability to simplify and communicate with others to solve complex problems), and
  • Agility (the ability to adapt and respond to change quickly)

To build these values into an organization, collaboration, trust, and transparency are key. And these don't come on their own.

McKinsey (2020) stated in an article written at the height of the covid 19 pandemic that many companies adopted agile practices to cope with changing business priorities. They concluded that companies with agile practices embedded in their operating models managed the impact of the crisis better than their peers.

Why?

If, as McKinsey states, an organization is made up not only of teams but of a network of teams within a people-centered culture guided by a powerful common purpose to co-create value, then teams need to be empowered.

If a team is empowered, it is able to make its own decisions, fail quickly with lower risk, and learn fast.

These teams:

  • trust each other,
  • have common objectives (like OKRs),
  • complete openness as to ongoing projects, and
  • a higher common goal (a purpose)
  • whilst working with smaller, clearly defined roles and focus
  • to stay on track and keep variables under control.

All of this put together makes a company much better prepared to face VUCA situations.

Short-term goals, self-organized data-driven collaborative teams with small achievable deliverables, and the capacity to make their own decisions allow us to move at a faster pace.

Remember the five year plans we mentioned at the beginning? Say a definite goodbye to them.

Time to say goodbye to five year plans

Goodbye to Long-Term Goals?

Yes and no.  

Big, time-consuming, yearly, or longer scenario planning cycles seem outdated and unrealistic, not to mention a waste of time. This does not mean that we should not set objectives. Actually, OKR's are a great and more flexible way to do that.

And each team needs its own KPIs to measure itself and its performance. So we don't really scratch out longer-term plans, but we do set way more checkpoints on the way as a thermometer and a tool to adapt more quickly to change.

So, What Does Agile Look Like in Practice?

Agile was originally created for software development teams in order to innovate faster while keeping up with customer needs.

Today, Agile methodologies have expanded their reach to break down organizational silos and boost cross-functional collaboration.

What does it change day-to-day?

Clear tasks, communication, and weekly or bi-weekly objectives.

Usually, teams will meet daily to briefly state what they'll be working on; at the beginning of what is typically called a sprint, there will be a planning session, and at the end of this cycle, a retrospective to analyze the work done, learn from mistakes and plan forward.

Clear, visualized workflow.

For this, a Kanban or Task Board could be useful to optimize the flow of work. A typical Kanban board will use sticky notes and have at least three columns where the far left is the backlog, the middle is in progress, and the far right is the done column.

A Kanban board view in Holaspirit

It easily communicates the work status of projects and support tickets. There's plenty of online tools like Trello or Asana for this but if you want to link your projects to your org chart and link operations with governance and decision-making processes, Holaspirit is the tool you need.

Constant iteration and testing.

What is typically known as Beta Culture, where aspiring to perfection is the worst possible enemy, and, instead, iterating, testing, and steadily approaching a better final product is much more productive.

Constant feedback.

Both external and internal. In retrospectives, via surveys, usability tests, user activity data, you name it. But listening to what is really going on keeps us down to earth.

Five Action Steps to Increase VUCA Preparedness

In order to survive and thrive in a VUCA world, an organization requires:

  1. a clear vision of why it exists and where it wants to go,
  2. strategic thinking and leadership to get it there, with every team member pulling in the same direction,
  3. analytics and routines to measure progress along the way,
  4. a corporate culture that breaks down silos to deal with complexity and ambiguity,
  5. agility to respond quickly to change.

To achieve that, organizations must be deliberate. We recommend you:

  1. clearly define the organization's purpose and make sure every team member understands it
  2. host workshops to co-create engaging objectives at organizational and team level
  3. host short weekly tactical meetings to discuss ongoing projects and review key metrics
  4. share a visual org chart and document roles so everyone can see who does what
  5. adopt an inclusive decision-making process that allows you to understand more points of view but still make fast decisions, in meetings or asynchronously

The Holaspirit web app helps you do all of that.

If you'd like someone from our team to show you how and help you setup your organization, book a 30-minute demo now.

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WRITTEN BY

Joyce Kettering

Head of Growth & Content

@ Holaspirit

Former internal auditor for Fortune 500 companies and music producer for no one in particular, Joyce is an entrepreneur who enjoys learning new things and creating helpful content.