V.U.C.A. model

(Volatility. Uncertainty. Complexity. Ambiguity.)

How it could be used and approached.

The scope and purpose of this presentation

• Purpose:Food for thought and feedback.

• ScopeThe content is only my personal views, which might go beyond some of those of other VUCA “adepts”

Content

V.U.C.A.

• What for?

• What is the definition / what does it stand for?

• Examples of ways of dealing with it.

• Some principles / rules about organizational functioning to keep in

mind.

• Example of using V.U.C.A. as a filter and sanity check.

VUCA: What for?

When the desired Output is e.g. :• Setting priorities.• Defining the “what”• Defining the “how”.• ….

When the underlying challenge is e.g.:• Risk management.• Strategy design.• Deal with the unexpected / uncertain.• Change management when change is continuous.• …

VUCA:What is the definition / what does it stand for?

COMPLEXITY• Contradictions or dilemmas.• Multiple key decision factors that are clouding our ability to make a

judgment.• The situation has many interconnected parts and variables.• Some information is available or can be predicted, but the volume or nature

of it can be overwhelming to process.

VOLATILITY• Rapid rate of change.• The challenge is unexpected or unstable and may be of unknown duration,

but it’s not necessarily hard to understand/knowledge about it is available.

AMBIGUITY• Lack of clarity about the meaning of an event.• Causal relationships are unclear.• Few precedents exist.• You face unknown unknowns.UNCERTAINTY• Unclear about the present and how to handle it.• The event’s basic cause and effect are known.• Change is possible but not a given.

COMPLEXITY. Examples of ways of dealing with it.

• Hold diametrically opposing thought patterns at one and the same time.

• Focus on being simple, after having been subtle and complex. Differentiate facts from

opinions and correlation from causality. Look for causes that are different in their nature.

• Question the relevance of the assumptions that are at the origin of the different key

decision factors. Challenge cognitive biases. Be aware of “mental locks” that hinder your

creativity. Challenge the formulation of the problem.

• Challenge linear “cause and effect” thinking. Identify feedback loops that reinforce or

reduce the initial pieces of the puzzle.

• Focus on the informal networks that emerge around shared interest/tastes or stakes.

• If two options are inevitably linked with a dilemma (e.g. you inspire and exhale), consider

not resolving this dilemma but instead changing / addressing the system in which the

dilemma exists.

• Analyze resources contained in every option of the dilemma, and ask the question: "how to

better use existing resources or how to use resources that are not yet used or misused?".

• Apply the options in order to maximize the benefits of each option, instead of trying to apply

the commonalities of the two options or minimize the negative aspects of both options.

• Differentiate form and content, e.g. organize using one option, but manage using that other

option (e.g. centralize resource allocation but decentralize the use of these resources).

• Review the problem/priorities/the system once you have tried a solution, since chances are

this has changed the first mentioned.

• Manage perceptions and intuitions, as much as realities.

• Identify irreversible events.

• Make the cost of complexity transparent.

• Discontinue elements whose complexity costs are higher, after standardization, than the

profit contribution they generate, but do not penalize the customer in order to avoid

managing complexity.

• Look at what is actually happening, in particular in temrs of un-intended consequences or

by-products, and only then, infer the purpose or governing rules of the system.

• Be aware of logical fallacies, in addition to, cognitive biaises.

• Imagine or target a solution where dilemmas are not solved through compromises but are

actually solved/options of dilemma are both honored.

• Identffy resources inside and outside of the ”system” that are unde-used or not used.

• Aim for ”elegant solutions” i.e. do not add a new type of component into the situation, but

instead: reorganize or use differently the components, introduce a slightly modified copy of

an existing object into the current system, divide an object and re-organize its parts, turn

symmetrical situations into asymmetrical ones, remove an object from the system and

assign its action to another object,and ideally, look for solutions in which the influence of

the main problem factor is either totally eliminated or reversed.

VOLATILITY. Examples of ways of dealing with it.

• Watch for rapidly developing opportunities and identify if they are a signal for an

opportunity elsewhere.

• Monitor the situation closely, have tactical leadership. Have the ability to react to surprises.

• Invest time in connections and human relationships with stakeholders. Ensure that

employees are connected and communicating with one another.

• Remember that culture of mindset beats technology and process any day, so invest in the

first mentioned.

• Do more of “what works” / solutions.

• Do not aim for spectacular strategic changes, but rather an accumulation of small tactical

changes. Build the ability to turn options on and off. Build resilience in facing the unknown.

• Surface and dialogue about fears (in particular fear of the unknown/of unfairness) and about

what we can control/only influence/not influence or control.

• Establish a network of “ombudsman” to surface issues before they become problems.

Protect those that constructively disagree with the majority.

• Ensure excellence in hand-over/transition phases and points of collaboration.

• Ensure each role provides a value-added not provided by another.

• Enable each role/process to have 10% of time dedicated to unplanned/innovation activities.

• Revise process when there are many exceptions to the rule, when there is un-satisfaction by

those that asked for them, or when they create more cost in terms of administration than

the benefit of having them.

• Set up a process in order to reinforce not build/compensate for behaviours or mind-set or

clarity of expectations/definitions.

• Make knowledge storage/sharing an easy activity (and not and additional one).

• Invest the ability to handle a “crisis”. Prioritize the ability to satisfy customers during a

change

• See change and broken engagements as inevitable facts of life, and do not resent them.

• Always have a backup plan.

• Ensure any action starts and ends with the sanity check question "How does this make the

sales organization perform better?“

• Remember that everything interesting happens at the boundaries.

AMBIGUITY. Examples of ways of dealing with it.

• Listen. Make giving you feedback even easier than it is.

• Begin with the end-user in mind, and focus your efforts on providing solutions that meet

their needs.

• Do several pilots based on different assumptions.

• Be agile. Be street-smart. Do not take for granted that followers actually are committed to

your leadership.

• Give stakeholders a voice and a decision right.

• Differentiate factors that enable to achieve a thing and those that avoid to trigger the

opposite. These factors are typically different in their nature. E.g. motivation vs. avoid

demotivation.

• Identify the right question to ask. Re-define the problem, by e.g. using an analogy “It is like

when ….”. Differentiate symptoms from root causes. Differentiate perceptions from facts.

• Starts with the indirect problems of a problem, as a way to define the scope of the problem.

• Use collaborative ways to define a strategy and plan, such as “future search” or “open

space”.

• Identify if you can try to not solve the problem, but rather increase the number of options

you have when the problem appears, and/or, just mitigate the consequences of the

problem.

• Prioritize based on feasibility vs. impact, rather than on importance vs. urgency

• Identify the factors that maintain “homeostasis” (maintain the form over time).

• When un-sure about what something means, define what it is not.

• Identify the rules that govern the situation and the “feedback loops”.

E.g. Identify who/what, has the most impact or influence in the situation. Plot the links between

the various factors of the situation, in the absence of the problem and in the event of the

problem. Identify factors, which, if changed, enhance or limit the effect of another factor (and

identify when this happen). Identify factors that are, by their very existence, necessary and / or

sufficient to influence other factors. Identify that which can enhance / reduce the relationships

between factors.

• First come up with the big idea, then a strategy to bring that idea to market, and finally, a

big, hairy, audacious goal to crystalize an ambition, motivate the troops, and excite

investors. Do not put goals before strategy.

UNCERTAINTY. Examples of ways of dealing with it.

• When you define the options of a dilemma, ensure they have the same degree of

uncertainty and feasibility.

• Be clear about what you really want / the desired outcome.

• Be clear about the criteria making a thing important /urgent.

• Look for game-changing information at the periphery of the domain in which you or the

problem is in. Spot weak signals, not only trends.

• Identify if today’s strength can be tomorrow’s weaknesses.

• Tap into the wisdom of the crowd. Seek outside perspectives. Build a feedback culture.

• Invest in the ability to respond in the face of imperfect data.

• Emphasis learning on the job (e.g. methods such as After Action reviews).

• Emphasis “executive control” (i.e. not give in to temptations, self-knowledge, patience …).

• Challenges views “all” agree upon.

• Decide if your strategic choice is, to adapt to an environment, or to shape the environment

in which you compete.

• Establish a database of abandoned ideas, and review them regularly.

• Invest in ensuring that teams function well.

• Invest in the ability to manage trust.

• Invest in the ability to trigger ownership.

• Invest in governance bodies, with the assumption that you are in charge of events that you

cannot fully control.

• Do not aim for final outcome to be certain, but aim for intermediate steps to be certain.

• Be hungry. Want it badly. Work smarter, don't work harder.

• Aim for a self-confident humility in most. Aim for leader’s executive gravitas.

• Put a very high value on simplicity. Treat it as a prime objective.

• Be very clear about what you are trying to do.

Example of using V.U.C.A. as a filter and sanity check.

PART 1. UNDERSTAND THE MUST-WINS / what needs to be done.

• What has happened recently that could be an illustration of each of the four quadrants?

What are the most impactful puzzle /domino pieces and feedback loops?

• What have we done to manage each quadrant, while delivering on our must-wins in the past?

• What is our Purpose / Ambition for the next 1 year and for the next 3rd years?

• What scenarios or trends could we be facing? Identify weak signals, exceptions to the rules, extreme cases, identify the 5% factors that will have the 95% impact (butterfly effect). Identify patterns, repetitive situations.

• For the present, in order to make the most of what we have, what are our must-wins?

Follow-up questions: Start by defining the options/scenarios that each of the four quadrant trigger, then answer the question with a focus on each quadrant at a time, finally summarize by differentiating shared must-wins from those specific to each quadrant.

• For the near future (e.g.2-3 years), in order to make the most out of future possible options or scenarios we might face, what are our must-wins, today? (same “follow-up questions”)

• For the medium-term future (e.g.2-3 years), in order to shape/define the future possible options or scenarios we might face, what are our must-wins, today? (same “follow-up questions”)

VUCA: E.g. of questions to ask

PART 2. IDENTIFY ACTIONS to succeed at the MUST-WINS / what needs to be done

• Read the examples of ways to address each quadrant of the V.U.C.A. model as food for thought and Organizational functioning principles

• Identify actions to achieve the final list of must-wins. – use facilitation techniques aimed at generating a maximum of ideas in a limited amount of time

Isolate those that solve more than one must-win. Position them on an important vs. urgent matrix

• Decide next steps.

• What abilities (individual efficiency, leadership, interaction, thinking, emotions management …) do we and others excel at?

To deliver the selected actions.To excel at risk management.To respond to change and surprises.