VUCA is an acronym where V means for Volatility, U means Uncertainty, C means Complexity and A means Ambiguity. The term VUCA was introduced by the US Army during the fall of the USSR. It is now being commonly used by business leaders to describe the business environment.
V – Volatility
We are living in a socio – political – economic environment that is constantly changing. These changes are happening more faster, in a more dramatic way and occurring when least unexpected. Whether it is the impact of the Corona virus, Stock Exchange Sensex, or the Oil prices, or the US – Middle East relationships, or our government policies; it is resulting in impulsive fluctuations in the performance of our businesses.
U – Uncertain
Events impacting businesses have become unpredictable. Forecast models based on historical data are becoming less relevant in the world today. Probability of outcomes about investments and growth have become less predictable. Climate changes, rise of newer viral diseases, natural disasters have completely broken predictive seasonal patterns.
C – Complexity
While we are in a constant pursuit to make things look simple, the underlying ecosystem is becoming more and more complex. We are living in world that has more options, interdependent and overlapping. Consider the case of a single click that you make while buying a product online. The single click results in a plethora of transactions, decisions and physical movement of products and services right from Customer to businesses to associated businesses to Suppliers.
A – Ambiguity
As scenarios impacting business performance continues to evolve, it is becoming rare to have conclusive best practice based predictive models that have high probability of accuracy. What used to work earlier, may not be relevant now nor would it provide the same benchmarked results. Decisions are taken with whatever available information – Not everything is Black and White.
In this VUCA world, businesses require leaders that are aware of their business environment. Leaders who are constantly aware of the emergent trends and developments that are taking place across the globe and understand the implications of the same on the business, society and the environment. Leaders that are self – motivated, committed to their work, have the right attitude towards their colleagues and are able perform consistently in a variety of business scenarios. Leaders who are not only talented and equipped with knowledge but also those who have heightened levels of consciousness about their capabilities, their attitude, their body, their environment, and know the levers to channelize their energies towards achieving business goals.
