Adapting to a predictably unpredictable future
As the legendary Chinese curse goes, we’re living in interesting times.
Right now, many businesses across the UK are struggling with a monsoon of uncertainty: what raw materials or finished goods will arrive this week; what new challenges or rules will affect their people, operations, travel plans, and financial forecasts next month; what orders might be cancelled and what customers might fold over the coming quarter.
This is an uncomfortable time for many. We are accustomed to predictability, whether opening a new factory or store, or simply visiting relatives down under, we rely on our assumed ability to make plans and see them through.
But there’s an acronym appearing ever more frequently in business discourse. The acronym is VUCA, the letters of which stand for Volatile, Uncertain, Complex, and Ambiguous.
VUCA is used to describe situations that are fast-changing, unpredictable, far from simple, and where “objective truth” is at best an enigma. And it is increasingly, and accurately, being used to describe the business environment of 2020 and 2021.
The big question is: Does VUCA describe the future for business, and maybe even life, post 2021? Is our current experience a blip, or the shape of things to come? And if this is the future, what are the implications – how do we plan; how do we manage; how do we thrive?
Clearly a combination of factors created this current VUCA spike, but we were already on an upward trend, and even when things settle, that trend will continue. In a few years, what was once a peak will most likely have become the norm.
But we shouldn’t be daunted by that. There are big opportunities here for all of us. We just need to shift our thinking, exactly as we did with “change”.
Over the last few decades, we’ve become increasingly used to change. The constant stream of “new”, the accelerating impact of innovation and technology and its pervasion into our lives. And at work, we have become accustomed to regularly reappraising what we do and whether, in the light of what’s now possible, we could do it better, or faster, or if we still need to do it at all.
Change is a two-sided coin, it brings as many opportunities as it does challenges, and its currency has become an essential fuel in business development. Uncertainty is no different.
Businesses can thrive in VUCA environments. Professional investors are just one example. They don’t make plans for their trades for the next quarter then methodically execute them. They live with and model multiple futures, hedge against the biggest risks, create options, and even trade in them.
Traders understand the difference between plans and outcomes.
Your plan for this year may have been to go to Rio, Sydney, Cairo, or Mumbai, but the outcome you wanted was a great holiday, probably studded with bunch of fun and interesting experiences. It may be that your plans had to change, but I hope you still got the outcomes you wanted. And that first option will still be there for next year.
So, imagine being asked, not where you plan to go on holiday next year, but what options you’re holding. Imagine the industry shifts that would be required to enable you to do that, flexibly, confidently and cost effectively.
Imagine the opportunity for any business who could manage all the uncertainty on behalf of their customers, to ensure they get their desired outcomes, irrespective of whether they end up going with plan B, C or D.
And imagine how that metaphor could extend to your customers, and the uncertainties they face. Isn’t that an interesting opportunity…?