VUCA is an acronym and highly relevant framework consisting of a combination of factors derived from the business theories of Warren Bennis and Burt Nanus. The “V” stands for volatility, and with the effects of the pandemic, employers and decision-makers need to invest more conscious efforts towards facing an unforeseeable future – now more than ever.
Dawn of The New Normal
COVID-19 resulted in a wild swing of change throughout the markets, societies, and industries. Business leaders need to anticipate and fulfill the fluctuating demands from employees and consumers alike. These trends and changes may fade in the long-term as the economy stabilizes. Still, decision leaders should make full use of the unique opportunity to navigate the volatility and gain a competitive advantage while other companies grasp at straws.
Volatility begets rapid change, and companies should equip and prepare to respond according to sudden demands and norms.
Understand the Dynamics of Volatile Social Behaviour
In VUCA, volatility relates to the social categorisation practices influenced by social and environmental cues. In that aspect, volatility is contextual (i.e., how companies perceive the priorities in quality remote communications differently before, during, and after the pandemic). There is a constant need for organisational leaders to detect and adhere to changing market norms and implement reactive practices to maintain an optimal workplace environment.
Expect the Unexpected
Volatility occurs in full effect with the pandemic or any large-scale crisis. As such, organisational leaders need to prepare to face unexpected challenges, under unstable or novel situations, for an uncertain duration. The sheer idea of facing the unknown may seem overwhelming and risky, but with the right contingency planning and vigilance, companies can turn an unexpected event in their favor.
The first step for organisational leaders involves assuming a focused mindset and a clear set of objectives/directives. It is impossible to prepare for every possible situation and ramifications, but as McKinsey & Company points out, companies should prepare for extraordinary risks. According to the market survey specialist, businesses need to look out for high-consequence and low-likelihood risks at all times.
Leaders can map out such risks with a plot graph (tabulated with the scope and certainty of impact) that calculates “predictable surprises.”While it is impractical to prepare for a crisis at the magnitude of the COVID pandemic, companies can prepare for volatile consequences that arise, such as communication disruption.
With the accurate calculation of prioritised assets and resources, companies can cope better against volatility and emerge faster than hunkered down competitors. The “extraordinary risks” method seems optimistic for various companies that adopted full-potential COVID-exit strategies that involve agile portfolio and performance management.
Prepare for Volatility, Always
Market experts share that business leaders can maneuver volatile trends (beyond the COVID-19 situation) with three additional steps in their business strategy. Firstly, tabulate the full potential of the business (performance and portfolios). Companies can account for business potential by incorporating market revenue and total competitor sales data from trusted sources.
Secondly, leaders should stay well-informed of the implications and interdependencies of timing with each business movement. Some crucial factors include addressing consumer priorities and assessing new business models and efficiencies generated in response to the crisis. Finally, with previous steps in place, businesses can structure an effective response program through strategic sequencing to maximise value creation.
While a VUCA business environment is inevitable, business leaders can better control their performance and organisational health with the appropriate measures and a clear vision – by always keeping volatility on a tight leash.
A VUCA world presents huge challenges for both leaders and employees, forcing us to be prepared to deal with constant evolution and change. StrengthsAsia has helped many individuals and corporate clients continue to survive and thrive by enabling breakthrough experiences for leaders, teams and organisations. If you wish to learn more about the Strengths Leadership Program, please reach out to us here.