On the Origins of VUCA and How it Affects Decision Making
/It’s not just you; it’s not just me. The acronym VUCA is more popular than ever.
According to Google Trends, interest in the term is at an all-time high, following a distinct trend upward in the past several years.
Like many ideas, however, VUCA as a framework for understanding turbulence in one’s environment wasn’t an overnight sensation. The acronym—which stands for volatility, uncertainty, complexity, and ambiguity—began decades ago with attempts to help develop strategic leaders at the U.S. Army War College.
One of the earliest references to VUCA that I’ve found is in a 1992 article in the Journal of Management Development by Herbert Barber titled, “Developing strategic leadership: The US Army War College experience.” In the article, he describes how the U.S. Army War College and The Army Research Institute for the Behavioral and Social Sciences sponsored a conference in February 1991 that brought together both scholars and practitioners to discuss leadership at the top of complex organizations. One of the aspects of strategic leadership upon which participants at the conference focused was the environment, or the context in which strategic leaders must operate. Even in 1991, the environment described by conference participants was one fraught with turbulence, from geopolitical uncertainty to technological advancement.
Crediting even earlier work in 1986 by leadership scholars Warren Bennis and Burton Nanus, Barber describes how the U.S. Army War College decided to use the VUCA acronym as a way to help their students (typically senior military officers) characterize the turbulence they would face as they took on increasingly strategic leadership positions. The recent popularity of the acronym stems in large part from increased application within civilian sectors, as leaders outside the military have found it useful in helping them make sense of their challenges and opportunities.
So what do the four components of VUCA mean? Here’s a brief summary of the explanations that I typically use.
Volatility is about the increasing pace of change. Although we can find examples from throughout history of people being astonished by the pace of change, two relatively recent factors are driving unprecedented change: (1) technological advancement and (2) globalization. Those factors, combined with the speed of innovation and increased competition, make for a world filled with many examples of exponential—not linear—change.
Uncertainty is about the unpredictability of the future. Predicting what the “next big thing” will be has always been difficult, but given the increasingly fast pace of change it’s getting even harder. Furthermore, people use new technologies in novel and interesting ways—ways that could never have been predicted even by their original creators (Twitter is a good example).
Complexity is about the interconnected nature of organizations, industries, markets, and geographies. Readers of the sociologist Charles Perrow may think of the concepts “interactive complexity” and “tight coupling” that he uses to describe how unpredictable and fast chain reactions can occur, particularly when risky technologies are involved.
Ambiguity is about what the famed military theorist Carl von Clausewitz called “the fog of war.” It’s about those confusing situations in which multiple plausible interpretations exist about what’s going on or what it means. It’s about those times when a group of smart people are all looking at the same data yet coming to different conclusions about what it means—and here’s the key—they all sound right.
Aside from overwhelming leaders with what the future holds, though, how is the VUCA construct helpful?
I’ve found it to be helpful in my conversations with executives in a few ways.
First, it provides a language and a framework for having a meaningful conversation about what an organization faces, both internally and externally. What are our knowns? What are our unknowns? And might there be unknown unknowns? Having those conversations is a critical step in the sensemaking process for leadership teams. And as my good friend and consulting partner Mike Richardson says, “conversation flow leads to cash flow!”
Second, it helps leaders understand the mindset and behavioral shift that they need to enact when entering the “land of VUCA.” Namely, VUCA problems are ones in which best practices—and even good practices—likely don’t apply. When encountering VUCA, one cannot reliably depend upon the past as a guide for the future.
As such, an understanding of VUCA can assist with understanding a specific domain of decision-making. And to help make sense of how to make decisions within a VUCA environment, the Cynefin framework is useful.
For those who aren’t familiar, the Cynefin framework originated around the turn of the century at IBM, specifically led by Dave Snowden. Since then, it’s become a useful way for leaders to help make sense of what types of problems they face and how to deal with them.
A complete description of the Cynefin framework is beyond the scope of this article, however, as depicted below, it categorizes four types of problems: simple, complicated, complex, and chaos. These all exist outside of disorder—those instances in which no clarity exists about which domain applies.
A sketch, by Edwin Stoop of Sketching Maniacs, of the Cynefin framework
Simple problems are solved using best practices, and complicated problems are solved using good practices (or a limited range of good options).
Complex problems are those in the land of VUCA. These are problems that aren’t solved by doing what worked well in the past (best practices), and there really don’t seem to be any good answers. Instead, experimentation is critical. This is the domain of probing, trying something, and then sensing and responding accordingly.
Chaos describes true crisis situations. These situations call for direct action in an immediate attempt to stop the bleeding (or the organizational equivalent), figure out some next steps, and move the problem into another domain.
So the next time you’re facing VUCA—in your life or in your organization—resist the temptation to treat it like a best practice. Instead, make friends with experimentation, embrace smart (i.e., small, fast, cheap) failure, and continually learn. Such an orientation toward leadership and decision making also requires a deep commitment to building trust, agility, and resilience within your team, because without those elements, you’ll never be able to create, fail, or learn effectively together.
About Ben Baran
Ben Baran, Ph.D., is probably one of the few people in the world who is equally comfortable in a university classroom, a military uniform, or in a corporate boardroom advising top management teams. A co-founder and principal at the consulting firm Indigo Anchor, he's also an award-winning business professor and published scholar at Cleveland State University and a commander in the U.S. Navy Reserve. He regularly consults leaders and organizations across a wide range of sectors and industries. Visit: www.indigoanchor.com and www.benbaran.com.
References:
Barber, H. F. (1992). Developing strategic leadership: The US Army War College experience. Journal of Management Development, 11(6), 4–12. https://doi.org/10.1108/02621719210018208
Bennis, W. G., & Nanus, B. (1986). Leaders: The Strategies for Taking Charge. New York: Harper & Row.