Technology in the VUCA world

Firstly what is ‘VUCA’?

Its and acronym for Volatile, Uncertain, Complex and Ambiguous — a term born in the US military in the mid ’90s and used today in management and leadership vocabulary to describe the modern business world.

The VUCA world is impacted and amplified by ‘Moor’s law’: the observation that the number of transistors in a dense integrated circuit doubles approximately every two years (Moore 1965).

In this age, technology innovation moves much faster than it has before due to innovations beyond microprocessor power, such as touch screen technology, cloud computing, broadband, social media and the proliferation of personal computers in society. Subsequently, there is significant, and immediate, access to much more information.

The speed of connectivity also allows the instant communication of ideas, both positive and negative, often heightened in response to an event, and often video clips of leaders/influencers providing their opinion or message. Previously this information would be portrayed by balanced written media pieces or two-sided news reports.

This concentration of communication allows individuals, businesses and groups to convey propagandist theories and information, positive or negative, true or false, to drive an agenda. Businesses can be much more agile in there messaging to customers in line with external factors through channels such as Twitter and Facebook.

For example, the week before the Brexit vote was due the Financial Times made all its Brexit related content free to view and started to use the slogan ‘A Star is Torn’ to connect with the vast number of potentially new customers searching for information. In the weeks after the Brexit vote EasyJet released a new campaign ‘Why Not’ with a push specifically on its mainland European destinations even though it was forecasting a 5% decrease in H2 2016 revenues as it knew there would be a potential surge in people looking to visit those countries for holidays the following summer before any changes are made to the travel rights of UK citizens.

The ability to fact check has led to more honesty and integrity from leaders, both business and political, as they are challenged more than they have been in the past, however, this is in the eye of the beholder and many may take the word of a trusted leader at face value.

In businesses, employees, particularly millennials, are more demanding of their leaders and managers due to the information available and volatility of factors outside of their control and thus they look to leaders for safety, stability and a vision to align themselves to. If they feel that they are not receiving this they can become more impatient in achieving promotions as well as their desire for receiving feedback as they can monitor, in real time, the ebb and flow of the organisations innovation and vision, and if they feel that the company down the road are portraying a ‘better’ culture they will quickly jump ship and move to the competition.

The same can be said for consumers in the VUCA world. Examples of companies being severely affected by consumer discontent are Tesco in 2014 and Volkswagen in 2015, their share prices both dropping around sixty (60) percent in a matter of weeks, in 2017 neither have recovered fully. Both companies went through ‘scandals’ that were played out in the modern 24-hour media, however, neither scandal material effected its customers. These two examples, as with ‘fact checking’ of politicians, show that business leaders must focus heavily on running ethical businesses in a VUCA world.

Leaders in businesses are also facing challenges from working practice changes that are entering businesses through inertia due to technology led cultural shifts, several key changes listed below:

• More remote working effects quality of communication and feedback. Many businesses promote homeworking as they can save on infrastructure cost, this results in less engaged staff and teams.

• Needing to be open to new ways of working and not stuck in their ways. Senior businesses leaders must embrace technology and new ways of working, such as Agile and DevOps.

• Employees and customers can ‘rise up’ against dishonest leadership in real time, businesses must engage with both employees and customers when making strategy changes.

• Future is less predictable, can’t base strategy decisions on past successes or trends, businesses such as Kodak, Blockbuster and Nokia have suffered from this.

• Decisions need to be made much faster often without being able to halt the process in question. Today’s technology projects are often said to be like “changing the tires on a car while driving”.

• Projects, especially in IT, have moved to a more volatile Agile delivery method rather than waterfall/gaant chart led delivery.