Leading in a VUCA World

By ACOSVO member & Director, Barnardo's Scotland, Martin Crewe

 

Pat Armstrong (ACOSVO Chief Executive) recently noted that leading in the voluntary sector can feel like ‘juggling on a unicycle’.  She also noted that the turbulence of the environment can be summed up in the term VUCA (Volatile, Uncertain, Complex, Ambiguous).  Originally a post-cold war US army term, the management literature around VUCA is still relatively undeveloped e.g. Bennett & Lemoine 2014. The temptation is just to use the acronym as a shorthand for the chaos of the modern world. However, it is worth considering the component parts separately as each charity will have its own particular blend.

 

Volatile – how turbulent is your operating environment? 

  • Are there significant new entrants?
  • Are existing competitors changing their behaviour?
  • Are the expectations of customers/stakeholders changing?

 

Uncertain – are there major disruptive developments on the horizon?

  • Could environmental changes have a major impact?
  • Could the organisation’s business model(s) become redundant?
  • Could digital advances render some current processes irrelevant?

 

Complex – how varied are your current operations?  

  • Do you provide a wide variety of products / services?
  • Do you have a multitude of funders and regulators?
  • Do you have a large workforce embracing numerous cultures?

 

Ambiguous – how well do you understand your current environment and do you have the systems to deal with it?

  • Do you have clear business models?
  • Do you have mature monitoring and reporting systems in place?
  • Do you understand your position within the market and you relative strengths and weaknesses?

 

If we rate each element on a 5 point scale then we can plot our organisation’s position on a ‘VUCA web’.

  1. – Low
  2. – Moderate
  3. – High
  4. – Very High
  5. - Extreme


 

For instance, the plot for Barnardo’s (above) shows a very highly complex organisation but a moderate ambiguity rating.  The current environment is highly turbulent with a high uncertain rating as well. 

 

So what should our approach be if we want to manage our charity’s VUCA risks and reduce the size of our VUCA web?  Actions need to be both internally and externally focused and could include:

 

Volatile

External: Rigorous and systematic scanning of immediate environment

Internal: Invest in being prepared for possible changes in competitor behaviour

 

Uncertain

External: Rigorous and systematic scanning of broader environment

Internal: Investment in new digital approaches

 

Complex

External: Analyse structures and strategies of competitor organisations

Internal: If appropriate, reduce range of products/services/localities

 

Ambiguous

External: Assess position in the market and highlight current strengths / weaknesses

Internal: Make existing business model(s) explicit

 

So far, so rational.  However, the wild card in all this is the ‘Uncertain’ box which by its very nature is … uncertain.  I believe that in the modern world the key challenge for all of us as charity leaders is to imagine what a future fully digital version of our organisation could look like.