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How to deal with a VUCA world?

The world is changing. Socio-economic developments, laws and regulations, new customer needs, and technological developments change the rules of the game for doing business. These changes are not temporary, but permanent. So, what does this mean for your organization? Can you benefit from these developments? Or do you see the sustainability of your business being compromised over time? Basically, the question here is: how future proof is your business model really?

 

By now it should no surprise to you that the playing field around us is changing faster and faster. Among others, events such as the pandemic, raw material shortages for computer chips, wood and energy, the climate issues and the war in Ukraine have a major impact on our playing field. The term VUCA refers to the fact that we live in a world full of Volatility, Uncertainty, Complexity and Ambiguity.

 

As a company, how do you respond to all these developments? How do you build resilience within your organization in order to navigate throughout that changing playing field? There are so many things that we cannot control nor predict these days. And therefore, above all, it is important to understand that the way we deal with this VUCA world determines the success of an organization. So, it is about the ability to deviate from the well-trodden path after receiving new insights. This requires several qualities that are not yet obvious to most organizations.

 

Look outside

External antennas are a prerequisite. Do you have the competencies within your organization to look outwards and to continuously follow new developments? We’re currently experiencing a dynamic market. These dynamics can have a strong impact on your current business, while it can also create new opportunities to create value. In order to signal these new opportunities, it is important to point your antennas outwards. Use the eyes, ears, and knowledge of your team to signal current developments. Make sure that people feel the possibility to share their insights and create a heartbeat to collectively identify how these developments will affect your business. While doing so, do not limit yourself only to internal colleagues, but also start an ongoing dialogue with your partners. Don’t forget your customers, they are just as much your partner.  After all, together you observe more that you would do by yourself.

 

Attached you can find a link to the Context Canvas, a tool that allows you to record trends and developments in your playing field

 

Mockup Context Map

 

Determine the impact

Within the organization, there must be the opportunity to quickly translate new insights into a strategy throughout the process. On the one hand, translating new insights into a strategy is about determining the impact of developments and changes of your current and future business. Are you able to translate what potential effects could be on the following business drivers, based on different perspectives?

 

  1. Desirability: is the relevance of your solution affected by developments because demand has changed? Or do opportunities for new value creation arise?
  2. Responsibility: do you have to reconsider the impact of your business on people, planet, and prosperity?
  3. Feasibility: is the way your solutions are manufactured or delivered affected by certain developments? Do they make it harder or easier to create value?
  4. Viability: is the viability of your business affected by developments because costs structures or income structures change?

 

On the other hand, it is about translating this impact to your strategy and adjust accordingly. In doing so, it is essential that your organization has a clear understanding of what its vision and ambition are. Because after all, the intended outcome determines potential alternative routes to achieve your goals.

 

Reservce space to review your strategy

An organization should not only be able to translate the insights that were found, but they should also reserve the right resources to review and support the chosen approach. In short, being capable to reset your current approach and enter new paths. As an organization you can organize this process by keeping parts of your resources and capacity ‘reserved’, so that you won’t use them. Not only in the schedules of your employees, but also at the backlog or PI-planning. The rule of thumb we use to create a future-proof business is to reserve 20% to 25% of your resources to adequately respond to change.

 

Moreover, reserving this capacity immediately signals and motivates the organization to look outside and follow developments in the playing field. This brings us full circle.

 

In short, when you want to stay successful in a market that is continuously changing, you must be a resilient organization. And it is possible to facilitate that resilience.

about the author
Eefje Jonker
Thanks for reading, I hope you’ve gained some valuable insights from the article! I’m Eefje Jonker, CEO & Strategy Designer at Stay Future Proof. Want to learn all about strategy, innovation and transformation? Reach out and let’s talk!
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