Headlines keep telling us that our world is changing at breakneck speed. That we live in a VUCA environment- Volatile, Uncertain, Complex and Ambiguous. That’s true. The world is an uncertain place. Only, we’ve been saying that for a long time. Don’t take my word for it. One of the oldest strategy journals in the world is Long Range Planning – International Journal of Strategic Management. Some of the titles of their articles from the 1970s include- “Strategic Management: A New Managerial Concept for An Era of Rapid Change” and “Planning in a State of Turbulence”
While we’ve been complaining about the fast pace of change for some time, it’s not as if its all make-believe. Advances in information technology, artificial intelligence and biotechnology are changing the world. So, has the world really become more VUCA? This article looks at some factors which make us think of the world as more VUCA. And examines the merit of each.
Technology and Disruptive innovation
Some industries are in the throes of change. There seems to be a new disruption every day. The incumbents seem scared, the challengers seem confident. The financial services industry, for example, is currently grappling with technology-anchored start-ups disrupting the way they do business. Yet, look back to the 1980s and you’ll find computer manufacturers grappling with the disruption caused by the introduction of Graphical User Interfaces (GUIs). Look back to the 1970s and you’ll find Federal Express disrupting the package and document delivery business.
Want to look even further? More than a century ago, Ford disrupted the transportation industry. It put the wagon and carriage, horse rearing and tending and even the buggy whip manufacturers out of work. So, disruptive innovation is something which has been around for some time.
But has the pace of disruption increased? It probably seems faster than before because there are many more industries and many more companies. And we have access to much more information about them. Through social media and news channels.
Financial Market volatility
The gyrations of the stock and commodity market can make you dizzy. You keep hearing from someone who’s made a ton money on the latest upswing or lost all their money in the latest crash. Things seem to have become terribly volatile! Yet, the volatility of the stock markets or commodities hasn’t really increased over the last few decades. Sure, there will be certain industries where stock price volatility has increased. Those are the ones where disruptive innovation is happening. Equally, there will be some commodities where volatility has increased. And some where it has decreased. Some businesses would have been more impacted than others.
If you hear the same thing through multiple channels, it becomes bigger. Our worldview is no longer created by just the morning newspaper and a couple of news channels. It’s created by the numerous news websites we access, what ‘influencers’ say on social media and the views of our network. Everyone seems to have a view on everything!
The media industry itself is going through a period of Disruptive Innovation. With increasing competition, a click-worthy headline is important. A doomsday scenario gets more readers. Business-as-usual with decent growth rates is boring.
Further, it gets amplified by the multiple sources of news available to us. All increasing our belief in increasing VUCA. The other factor which increases VUCA, is that we often come across multiple views on the same topic. Our brains don’t deal with dissonance very well. And that very dissonance increases our sense of uncertainty.
There are several other factors which increase our perception of uncertainty. Changes in the political environment and the seeming rise of nationalism. Perceived increases in terrorism. (actually, the world has never been safer. fewer people die from human violence than from obesity, car accidents or suicide). All of these add to our sense of uncertainty of the future.
The world probably is a bit more VUCA than before. Yet, with technology we can handle that uncertainty much better. For example, the number of customers we serve may have increased. But we have cloud-based Customer Relationship Management (CRM) tools helping us manage this increased complexity. The amount of correspondence we receive has increased. But we have significantly better spam filters, intelligent email sorting, contact management and automated retrieval of actionable items in our email. There are numerous other examples.
Research shows that the older we get the quicker time seems to pass by. And it becomes more difficult to cope with change around us. So, if we find the world too VUCA, it could help to slow down and smell the coffee. And acknowledge that VUCA is part of life, and we should enjoy it!
Do you think the world is more VUCA? Share your experience with us in the comment section below!
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