V — Volatility U — Uncertainty C — Complexity A — Ambiguity
In a rapidly evolving business environment, VUCA is a catch-all term: These include the speed at which technology advances and its effects on operations, business models, data privacy, dynamism, disruption, and fierce competition.
This against a backdrop of high-velocity markets and a whole host of additional factors, including the environment, corporate social responsibility, and even public health. Sounds familiar?
✔ Rule #1 — Simplify Organizational Structure and Processes The traditional foundation of organizational structure and processes has always been risk management focused (putting in place so much control to ensure that nothing goes wrong) What happens is when the business grows, the layers increase and the processes become too complex disrupting the speed of process execution. This simply does not work for the VUCA world.
What you NEED are the following: ➡ Speed over risk management ➡ Simplicity over perfection ➡ Empowerment over control ➡ A flatter, cross functional structure. ➡ Simplify your internal processes making employees your primary focus.
✔ Rule #2 — Continuous Learning Technology has allowed access to learning and wider knowledge however a significant portion of that knowledge is not “codified” and resides in people’s minds. Knowledge is an important source of competitive advantage. True story!
Organizations NEED to invest heavily in codifying and leveraging their proprietary knowledge. Building a knowledge sharing culture is key.
✔ Rule #3 — Build Entrepreneurial Leaders Through Positive Work Culture Companies will NEED more leaders and LESS managers. The unlearning and relearning process begins here. No room for dinosaurs.
Building an entrepreneurial cultures means the following: Developing a higher tolerance for chaos and acceptance of failure. Establish and evangelize a learning culture which includes honesty, humility and transparency. Build resilience — you WILL experience setbacks so change management becomes critical.
John Chambers (Former Executive Chairman of Cisco) said: “At least 40% of all businesses will die in the next 10 years if they don’t figure out how to change their entire company to accommodate new technologies.”
Organizations are NOT ready for a disruptive (VUCA) world. Traditionally run organizations are NOT ready for the VUCA world but you might be surprised to learn that modern companies are not either. WHY?
The Innovator’s Dilemma — A term coined by Harvard professor and businessman Clayton Christensen, this refers to the idea that successful, well-established companies sometimes fall behind their less-established competitors in the face of disruptive innovation.
Fear of failure especially in the shadow of a spectacular legacy.
Market entry is quick, but sustainability is difficult.
Leaders who lack the experience to deal with the demands of a modern workforce.
Weak foundational processes specifically HR and Finance. See layoffs.
Many companies have yet to achieve a durable culture based on a realistic value system.
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