Every organization, large or small, is now operating in an environment which is influenced to a greater extent than has historically been the case by:

• The range of ‘ecosystem players’ and relationships to be managed.

• People’s changing expectations, aspirations, and societal values.

• Political imperatives, regulatory and environmental change.

• Paradoxes (e.g. ‘globalization and fragmentation/localization’).

• Disruptive innovation reflected in new products, or current products delivered by new methods and/or to a new market segment.

 

ICT has enabled all these influencers to interconnect and interplay more easily and more rapidly; driving turbulence and an exponential rate of change.  This ‘hypercompetitive’ operating environment may be described by the mnemonic VUCA which may be described as:

• Volatility - a situation is unstable and may change very rapidly.

• Uncertainty - how a situation develops is not predictable; both the set of variables relating to the problem, and information about the variables may be imperfect, incomplete or unknown.

• Complexity - the situation is dynamic with a large number of non-linear interacting elements producing disproportionately large consequences.

• Ambiguity - Multiple interpretations exist for information relating to a situation,  causal relationships may be unclear

 

VUCA is both an outcome of the turbulent external environment, and a driver of it.  VUCA creates the ‘fog’ that obfuscates, and hinders decision making and planning; you need an approach to strategy development, execution and evolution that exploits VUCA to your advantage and which minimises the effect of ‘fog’.

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The term VUCA was first used in the US Army War College in 1987; it has since become popularised in business leadership media.

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