In a VUCA World, All Businesses are Startups
Business face unprecedented and increasing levels of volatility, uncertainty, complexity and ambiguity. We even have a term for it. VUCA means that the fundamental assumptions underlying any business model and strategic plan: cost structures, global competition, customer expectation, information availability, supply chains, and a plethora of other factors, are changing too rapidly and unpredictably for traditional management processes.
Changes are too rapid for established businesses, which are optimized for execution and stability, to adapt effectively. The signals are too ambiguous and interaction between factors too complex to allow much predictability and therefore long-term planning. Management focused on preserving and growing proven revenue streams miss out on disruptive trends till it is too late.
Traditional Management Science has been stretched and is breaking in the VUCA world. We need a new framework. Fortunately, a potent proven framework already exists.
Startup models were always designed for a high-risk-and-uncertainty environment. Established businesses need to think and act more like startups. They have to continuously experiment and discover new ways to create value, validate and adapt their model, recognize and adapt to changes more rapidly — all while continuing to execute and scale the business.
The best definition of a startup I have seen is: “a startup is an organization formed to search for a repeatable and scalable business model”. A startup iterates and pivots as often as necessary and as long as it can survive to hit upon a repeatable business model, at which point it becomes an established business, executing a proven business model; then turns around and disrupts itself all over again.
In a VUCA world, all businesses need to learn, adapt and act like startups to survive and thrive.
