VUCA

I recently came across the term “VUCA” which is an acronym for Volatility, Uncertainty, Complexity, and Ambiguity.  It has its origins in the US military and describes the rapidly changing and unpredictable environment in which military operations take place.

It seems like an apt term today as 90% of my recent business and social conversations have had some sort of reference to ChatGPT (which is code for all the disruptive generative AI tools that have hit the market recently).

VUCA is ChatGPT in a nutshell:

• Volatility: Rapidly changing market conditions, product opportunities, and technology capabilities as new applications like ChatGPT emerge.

• Uncertainty: Unpredictability with new ventures, product launches and business operations as the long-term impact of ChatGPT is not yet fully understood.

• Complexity:  Implementing ChatGPT requires intricate processes, multiple stakeholders and has competing priorities.  This underlines the fact that, while very powerful, it will be difficult to implement AI capabilities as they may be very disruptive.

• Ambiguity: Incomplete or unclear information impairs strategic decision-making. This seems to be the case with AI-based technologies as business, human, regulatory and ethical considerations remain ambiguous – and implementing regulations will move at a snail’s pace as compared to the advancement of the technology.

Understandably, this is generating both angst and excitement for business leaders, technologists and front-line workers.

I will leave it to other prognosticators to predict the impact of ChatGPT and similar AI tools but, without a doubt, the impact will be huge (once-in-a-generation or once-in-a-lifetime huge), the genie can’t be put back in the bottle (trying to ban it will be useless) and you better spend some time figuring out how to deal with it.

We’ve Seen This Before

Dealing with rapid change is nothing new but it seems even more pronounced today.  Our brains and business systems are having a hard time keeping up and the VUCA framework may be helpful for understanding the impact of ChatGPT and related technologies.

I started a company 30 years ago that developed some of the first web pages for companies in Alberta. Business leaders then knew that this thing called the “Internet” was going to be big but didn’t know in what way or how quickly it would impact their business.  It represented a sea change of how business was going to be done and it feels the same with ChatGPT today.

More recently, my work today as a co-founder of startups and helping companies develop new products has a similar vibe.  Any drastic change to the status quo creates a VUCA environment and especially when change is happening faster than our ability to process it.

Mindset

To deal with this, mindset is a crucial.  The mindset of a business leader translates to mindset of their team and therefore the company overall. 

In cases like this, whether it was 30 years ago or yesterday, my experience has shown me that two opposing mindsets often emerge.  In one direction, are the leaders who would wring their hands with angst and have the mindset of preserving the status quo.  They want to take a wait and see approach with the thought that being more conservative would be a better approach.

In other direction, those with an “art of the possible” mindset with a spirit of experimentation and actively embracing new technologies that are causing the VUCA.

With my experience the status quo groups more likely than not experienced stagnating growth and then eventual decline.  In the early Internet days, we had a major newspaper as a client who exemplified this and it’s been a long, slow and painful decline for them ever since. 

The later group ended up doing much better.  Companies with active new product development programs and a spirit of experimenting with new technologies grew more quickly – and this was also the case for traditional industry companies who did not rely on new technologies to grow. 

My evidence is only anecdotal but I would bet that those who embrace change today (like investing heavily in ChatGPT) and willing to make a few mistakes along the way will have much higher long-term growth rates (looking backwards, research studies back this up).

Managing change is not getting any easier as it keeps accelerating.   Some think they can build a business that is the opposite of VUCA (stable, predictable, and straightforward) but good luck with that – it’s not going to happen. 

Inverted VUCA

Instead, consider the concept of inverted VUCA or VUCA Prime.

In this case, VUCA stands for Vision, Understanding, Clarity and Agility:

• Vision: Having a clear and inspiring picture of the future.  A clear vision acts as a filter for focus and how and where to apply new technologies (and regardless of the type of the technology).  A strong vision also helps leaders make tough decisions as it provides a framework for evaluating different options.

• Understanding: Deeply comprehending the current situation including its complexities and nuances.  This is a hard when a once-in-a-generation technologies like ChatGPT come along. It means you have to invest significant time and effort to understand the underlying complexities and interdependencies that could impact your current business operation or new product development process.  It also means minimizing internal company biases that prevent your teams from moving past the status quo.

• Clarity: Communicating with precision and avoiding ambiguity. In a complex and rapidly changing environment, it's easy for miscommunication and misunderstanding to spread. This is why clarity is so important and leaders who can communicate with precision - using clear and concise language - are more likely to be understood and trusted by their teams. These teams in turn are more likely to make decisions that are aligned with an organization's goals and values.

• Agility: Being adaptable and having the ability to pivot quickly in response to changing circumstances. With technologies like ChatGPT, the business environment is changing rapidly and unexpectedly and those with the ability to adapt quickly are more likely to succeed. This requires a willingness to experiment, take calculated risks, and learn from failure.

I really believe the inverted-VUCA approach will play dividends when implementing a company strategy and undertaking new product development efforts during a time of change. 

Vision and Clarity act as a filter on how to deal with rapid change while Understanding and Agility prepare you and your teams for an unpredictable future.

Perspective

The VUCA framework offers a valuable perspective on the challenges and opportunities presented by emerging technologies like ChatGPT. As we grapple with the rapidly evolving landscape of AI and its impact on our businesses and personal lives, it's crucial to embrace change and focus on the "art of the possible."

Look to using the inverted VUCA or VUCA Prime approach, which emphasizes Vision, Understanding, Clarity, and Agility, as guiding principles for navigating through rapid change. You will be better equipped to take advantage of the potential of disruptive technologies like ChatGPT and generate long-term company growth in an increasingly complex and unpredictable world.

(And yes, ChatGPT did help with this article.  The ideas are mine but ChatGPT saved me hours of research.)