A buzzword that we keep encountering in the field of agile work is VUCA. Let’s take a look at what that actually is:
„VUCA“ is an acronym that refers to „volatility,“ „uncertainty,“ „complexity,“ and „ambiguity.“ These are used to describe supposed characteristics of the modern world.
But what does that actually mean?
Volatility – Volatility refers to the speed of change in an industry, market or the world in general. It is associated with fluctuations in demand, turbulence and short time to markets and it is well-documented in the literature on industry dynamism.
Uncertainty – Uncertainty refers to the extent to which we can confidently predict the future. Part of uncertainty is perceived and associated with people’s inability to understand what is going on. Uncertainty, though, is also a more objective characteristic of an environment. Truly uncertain environments are those that don’t allow any prediction, also not on a statistical basis.
Complexity – Complexity refers to the number of factors that we need to take into account, their variety and the relationships between them. The more factors, the greater their variety and the more they are interconnected, the more complex an environment is. Under high complexity, it is impossible to fully analyze the environment and come to rational conclusions.
Ambiguity – Ambiguity refers to a lack of clarity about how to interpret something. A situation is ambiguous, for example, when information is incomplete, contradicting or too inaccurate to draw clear conclusions. It refers to fuzziness and vagueness in ideas and terminology.
VUCA became the standard description of the modern environment in which the U.S. Army operates in the 1990s. Later, the term was adopted by businesses and academia. The latter often see the phenomena alluded to by the acronym in the context of digitalization and are looking for strategies and concepts to assert themselves in the changed environment.
And how to deal with it?
According to some executives and management consultancies, the answer to VUCA is, well, VUCA. This time, the letters stand for „vision,“ „understanding,“ „clarity“ and „agility.“ This contrasts the negative view with a positive one, with a certain simplification inherent in both.