It’s a VUCA World
VUCA is an acronym for Volatile, Uncertain, Complex, and Ambiguous.
VUCA is an acronym for Volatile, Uncertain, Complex, and Ambiguous. The acronym and concepts were first introduced by Warren Bennis in his writings about leadership. The U.S. military found the concept useful for helping to formulate strategies in the post-Cold War world. VUCA became even more relevant and important after 9/11. I first heard VUCA discussed in 2008, as the only business representative invited to a strategy session at the U.S. Army War College in Gettysburg, PA.
Our current situation is about as VUCA as it gets. The global COVID-19 pandemic, global economic recession, U.S. social unrest. For many businesses, these add up to unprecedented challenges.
Small businesses are especially vulnerable right now. Even in “normal” times, one in five small businesses fails within its first year. And the pandemic has put U.S. small-business jobs—30 million of them, according to McKinsey & Co.—disproportionately at risk. Nearly half of those vulnerable jobs are clustered in a handful of industries, including hotels, food and beverage and retail.
But small business remains the lifeblood of our economy. Before the pandemic, it accounted for nearly half of all private-sector jobs and almost 44% of U.S. GDP. In addition, nearly one-third of U.S. workers are self-employed and sell their products or services directly to interested buyers in our 21st-century digital economy.
The nonprofit sector adds another 5.6% to economic output. The approximately 1.5 million nonprofit organizations registered in the U.S. employed about 12 million people, or 10% of the U.S. workforce, as of last year.
Now, consider many local economies across America. Small business predominates. The nonprofit sector is growing as is the number of independent workers. America’s economy and society attracts entrepreneurs, freelancers, and philanthropists. The upshot: Many local businesses, nonprofits, and independent operations—perhaps yours, if you’re reading this—need all the help they can get right now to navigate and survive the disruptive changes underway.
So, how can you respond to VUCA?
Focus on what you can control.
Stephen Covey popularized the concept that people operate in concentric circles of concern and influence. Our “circle of concern” includes all the things we care about and that affect us, but which we can’t control. Even with vaccines coming, COVID-19 will be with us for several more months, perhaps even a year, disrupting the economy and jobs for too many of us, disrupting schools for our children, and continuing to disrupt our family and social lives. It’s human nature to spend a lot of time here.
Our “circle of influence,” on the other hand, includes the things we can affect. But the more time we spend on concerns—which we can’t control—the smaller our circle of influence becomes.
CIRCLE OF INFLUENCE
I like a model that evolved from Covey’s to include a third interior circle—the “circle of control.” It contains the few but important things we can decide or act on to make a difference. Now, think of specific things like your cash on hand, your offerings to your customers, and your flexible work policies for employees. The more we choose to operate here—the bigger we make our circles of control and influence—the more we push out and minimize concerns we can’t do much about anyway.
You surely have a swirl of concerns right now. How much of your day (and night) do you spend fretting about them? Try to manage or minimize concerns. Choose to focus, like a laser, on what you can control or influence, right now. Here are two helpful questions to ask:
Here are two critical questions to ask:
What is your biggest individual challenge or problem right now affecting you personally?
What is the biggest challenge or problem right now for your small business, nonprofit organization, or independent operation?
Write down your answers. Be as clear, direct, and precise as you can be.
In an upcoming article, we’ll examine these problems from a fresh angle.
A.G.’s perspective: A VUCA world indeed
I’ve lived and worked through a number of challenges and ‘crises’ over the past 50 years. The Revolution du Mai in Paris in 1968 that shut down the Sorbonne for the only time in its 800-year history—and threatened to wipe out my third year of undergraduate studies. The Vietnam conflict (I served in the U.S. Navy from 1970 to ’75), the oil crisis, recessions, and stagnation of the 1970s. The recession and stock market crash of the 1980s. The recession, Kobe earthquake, and Asian and Russian financial crises of the 1990s. Procter & Gamble’s collapse in 2000, 9/11, the dot.com bubble, Hurricanes Katrina and Rita, and the global financial crisis and recession of the last decade. And now, just when the U.S. was pulling out of a prolonged period of slow growth, the COVID-19 pandemic and an economic turndown that could be worse than 2008‒09 and cause economic fallout and unemployment not seen since the Great Depression. We are indeed in a VUCA world.
About the author
A.G. Lafley is the former CEO of Procter and Gamble, who worked for decades in and with large public companies. Over the last 15 years, he has turned more of his attention, energy, and time to small businesses and nonprofit organizations. He currently serves on the boards of Omeza, Snapchat, Tulco, Hamilton College, and as the founding CEO of the Sarasota Bay Park Conservancy. A.G. is the author of two best-selling books, The Game Changer about innovation and Playing to Win about strategy, as well as numerous articles on leadership, management, and business strategy for Harvard Business Review.