Welcome to the VUCA world
VUCA is an acronym that stands for Volatile, Uncertain, Complex and Ambiguous (VUCA), a combination of qualities that, taken together, characterize the nature of some difficult conditions and situations. The term is also sometimes said to stand for the adjectives: volatile, uncertain, complex and ambiguous.
The term VUCA originated with the United States Army War College to describe conditions resulting from the Cold War. The VUCA concept has since been adopted throughout businesses and organizations in many industries and sectors to guide leadership and strategy planning.
An awareness of the forces represented in the VUCA model and strategies to mitigate the harm they might cause are integral to crisis management and disaster recovery planning.
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. The more volatile the world is, the more and faster things change.
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. The more uncertain the world is, the harder it is to predict.
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. The more complex the world is, the harder it is to analyze.
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. More generally it refers to fuzziness and vagueness in ideas and terminology. The more ambiguous the world is, the harder it is to interpret.