What is the VUCA world?
Originally coined in the 1990s to describe the multilateral political climate after the Cold War, the acronym VUCA is used today to characterize the situation being experienced in the modern world of work. In an era of digitalization, it is undergoing a constant process of transformation, making it necessary to continuously adapt to new framework conditions and the prevailing circumstances.
VUCA stands for:
- Volatility: As a result of digitalization, relevant innovations are being produced in ever shorter succession, which requires companies to establish a persistent culture of change. Unexpected events happen more frequently, and it is difficult to identify the cause and effect. The external environment of customers and competitors is also less constant. A defined, consistent customer base no longer really exists, competitors only stay on the market for a short time or change their focus quickly, and there is constant pressure to innovate.
- Uncertainty: Due to fast-paced developments and the need for agile working, processes are so dynamic that it can no longer be predicted how they will turn out, making them impossible to plan as well. Consequently, the personal experience of a leader becomes irrelevant. Forecasts are proving to be incorrect more and more often. Investments, developments, and growth can no longer really be planned.
- Complexity: This refers to AI-controlled processes, data quantities that cannot be processed by the human brain, as well as multilateral markets and problems that depend on an incalculable number of various factors. The intricacy of phenomena makes it difficult to form or reconstruct correlations between things. Knowledge resources are also immediately available in an unmanageable quantity. All this makes it harder to detect and understand complications and problems; solutions require extensive knowledge of new technologies methods, workflows, and resources.
- Ambiguity: A cause now rarely leads to a clearly foreseeable effect that can be attributed to that one cause. A symptom can be caused by many factors at the same time, and situations can be interpreted and subsequently dealt with in different ways. “Best practices” no longer exist, and individually tailored solutions are a must. At the same time, managers need to be aware that their decisions can have many different consequences that could not have been predicted or even planned in such form at the time of the decision.
Causality is becoming more complex, meaning that managers are no longer able to reconstruct exactly what has happened. Many companies almost feel as though they are caught up in the permanent change process and are constantly trying to keep up with the continual developments of the digital transformation. The feeling of no longer really being in control leads to growing uncertainty.
What challenges do managers face in the VUCA world?
All employees, but particularly managers who are responsible for the actions of several employees, are confronted with the following difficult tasks in view of the challenges posed by this VUCA world:
- Leading the company through the VUCA situation with as little damage and as much success as possible
- Taking control of actions in order to actively steer the constant transformation in the right direction
- Helping shape the transformation themselves in order to set new benchmarks that other companies in turn have to aim for
Conventional leadership skills operating on the basis of standardized solution models, defined workflows, and long-term forecasts are not suitable for fulfilling the requirements and demands of digital leadership. Traditional line organizations cannot withstand the dynamic nature of digitalization. New, agile, and flexible solutions are called for that can be adapted to the individual circumstances and needs of every company.
Hard facts must therefore be replaced by a flexible framework that has to be newly interpreted by every digital leader and brought to life by his or her own practical actions. Only through flexible models is it possible to adapt your actions and business activities to new markets and thereby react to changed requirements. You must leave linear thinking and hierarchical management models behind and show that you want to continue to develop yourself on an ongoing basis. There are several much-discussed approaches in this context, and we want to take a look at two of them in more detail: VUCA and VOPA+.
Fight VUCA with VUCA?
Applying VUCA to overcome the challenges of the VUCA world may sound ridiculous at first. How would uncertainty counteract uncertainty, and can you fight fire with fire? The answer is simple: VUCA is an acronym for a completely different VUCA model here. It stands for a human-centered design approach:
- Vision: Uncertain circumstances in the present require a fixed point in the future as the destination. Even if a company applies design thinking and human-centered design as a strategic answer to the challenges of the VUCA world, it still needs a clearly formulated vision or mission to give a sense of purpose, provide motivation, and allow internal and external parties to identify with the company.
- Understanding: If causal relationships are complex, metastrategic ways of thinking and planning are required to make them comprehensible. Here, it helps to define the result and use it as a basis to plan and derive necessary steps in a backward direction. Mistakes, resistance, and dismissive behavior should be converted into productive energy. Agile strategies and frameworks are well-suited in this respect.
- Clarity: Complexity must be countered by clarity and simplicity. Here, it is advisable to clearly and understandably state what aspects should be focused on. This should make applied workflows and processes more transparent and easier to reconstruct from the cause to the effect. This approach creates trust and certainty.
- Agility: Managers must take a critical look at their role and any hierarchical understanding of their role within the company. Equally incorporating the skills and resources of employees allows for a more flexible response to various problems and increases the chance of obtaining the right input to solve a specific problem and increase innovative power. Agility means being able to adapt to changing conditions, to foster a culture in which mistakes are dealt with productively, and to strengthen resilience.
Such a positive VUCA strategy should therefore help find suitable answers to counteract the negative VUCA model. It should in no way be understood as a method, but merely serves as a framework that can be applied flexibly.
Is VOPA+ an appropriate approach in the VUCA world?
The VOPA+ model, also known as the VOPA+ principle or the VOPA+ approach, describes an agile and effective digital leadership approach. It was developed by German economist Dr. Willms Buhse in 2014.
The German words making up the acronym VOPA+ can be translated as follows:
- Networking: Channels, resources, and responsibilities are networked, and the knowledge of many is networked into collective intelligence in order to devise specific business solutions.
- Openness: All information and problems are shared transparently among everyone involved.
- Participation: Every employee has a clearly defined scope of tasks, responsibilities and competence and is involved in relevant decisions.
- Agility: Autonomous working is promoted, and mistakes are analyzed together in the team in an open-minded culture.
- Plus trust: Mutual trust is the foundation of the entire system.
VOPA+ ultimately requires a company’s culture to change so as to allow for greater participation and independence of employees while strictly defining areas of responsibility and goals. The key elements of the VOPA+ approach are:
- Interdisciplinary collaboration within and between teams
- Transparent and direct communication
- Knowledge is made accessible to everyone and is networked as a joint resource
- Autonomous working is promoted and personal responsibility reinforced
- Goals and milestones are clearly defined and communicated
- Goals are the sole focus
Taking all this into account, the VOPA+ approach provides a flexible framework for mastering the transformation of a hierarchical organization into networked working. In contrast to approaches such as design thinking where hierarchical management models have to be abolished, VOPA+ integrates networking and hierarchy. It provides stability to managers and gives all employees a sense of orientation – which is precisely what is needed the most in the VUCA world.
What really counts in the VUCA world?
The objective of both approaches is clear: against the backdrop of the VUCA scenario, people should increasingly become the focus of attention, and autonomy, personal responsibility and clear goals should counteract the imminent disorientation. Active participation and human-centered design are the key terms for summarizing a company’s development in the VUCA world.
Your task as a manager is not to explain to every employee what their responsibility is and to monitor their effectiveness when it comes to achieving individual goals, but rather to redefine the framework conditions on a continual basis to allow your team to act autonomously in a way that is valuable and structured. Empathy and a keen eye for visions take precedence over details. Best practice gives way to best thinking!