Playing To Win
My Love/Hate Relationship with VUCA
Don’t Let VUCA Paralyze Your Strategy
I have a love/hate relationship with the popular acronym for a volatile, uncertain, complex, and ambiguous environment — VUCA. Actually, the relationship is more hate than love because of the threat to strategy of the concept of VUCA. So, I decided to write my 37th Year II Playing to Win/Practitioner Insights (PTW/PI) piece on My Love/Hate Relationship with VUCA: Don’t Let VUCA Paralyze Your Strategy. You can find the previous 89 PTW/PI here.
The VUCA Narrative
The concept of VUCA came out of the US Army War College in the late 1980s, influenced by a 1985 book by management scholars Warren Bennis and Burt Nanus, Leaders: The Strategies for Taking Charge. The War College interpretation was that conflict/war, had been characterized for several decades by the relatively stable Cold War with the Soviet Union. However, with the fall of the Berlin Wall and the breakup of the Soviet Bloc, this stability had given away to more volatile, less certain, more complex, and highly ambiguous environment — a VUCA world to which military strategy needed to adapt.
As with many things that have migrated from the military to the business sphere (like strategy itself or supply chain), VUCA became an extremely popular business meme: I.e., our business is facing a VUCA environment. Part of my reaction is love because the business environment really is VUCA, which is why every company needs a strategy in order to maximize its chance of prospering as it marches forward into that VUCA environment. I would rather have companies think that their environment is VUCA rather than stable, known, simple and clear (SKSC) because the latter is delusional.
What I don’t at all like is the popular if not dominant view in business that the environment is more VUCA now than at any point in the past. And that was the War College’s initial view — it used to be SKSC and now it is VUCA! And from my observations, this view has been amped up in the world of business, so business can’t stop talking about VUCA, VUCA, VUCA.
This leads to the hate part. A now highly popular view in business is that we are today at such a uniquely heightened level of VUCA that our environment is too VUCA to do strategy. That is, because it is so darn VUCA, it would be futile to do strategy. The implicit thought seems to be that since VUCA is cresting right now, we will wait until our operating environment gets less VUCA when we will be able to make strategy choices. I hate that for many reasons, not the least of which is that not making a choice is in fact making a choice. It is the clear choice of maintaining the status quo because of fear over making any other choice during this heightened period of VUCA. That is choosing to rob yourself of a wide range of options and implicitly assuming that the status quo must be optimal.
The History of VUCA
The biggest reason I hate this VUCA narrative is that it is just plain wrong — i.e., while it might feel that things are more VUCA than ever before, or even just above historical average of VUCA-ness, that is just your imagination running away with you (to channel The Temptations or Boyz II Men depending on your age). It has always been VUCA.
Perhaps the greatest military theorist in history, Carl van Clausewitz referred to it in his 1832 classic On War when he spoke about ‘the fog of war. That is, his view was that the environment was VUCA nearly 200 years ago.
Then there is this quote that management guru and friend Henry Mintzberg often shows during his talks:
“Few phenomena are more remarkable, yet few have been less remarked, than the degree in which material civilization, the progress of mankind in all those contrivances which oil the wheels and promote the comfort of daily life has been concentrated in the last half century. It is not too much to say that in these respects more has been done, richer and more prolific discoveries have been made, grandeur achievements have been realized, in the course of the 50 years of our own lifetime than in all the previous lifetime of the race. It is in the three momentous matters of light, locomotion and communication that the progress effected in this generation contrasts surprisingly with the aggregate of the progress effected in all generations put together since the earliest dawn of authentic history.”
It has some archaic turns of phrase that give away the era from which it comes, but it sounds much like the VUCA arguments of today. But the quote is from Scientific American in 1868–150 years ago.
Part of what spurred me to write this piece was a note from friend Tom McCullough who had heard me rant about VUCA and thought I would enjoy this passage that introduces geopolitical forecaster, George Freidman’s 2009 book, The Next Hundred Years:
“Imagine that you were alive in the summer of 1900, living in London, then the capital of the world. Europe ruled the Eastern Hemisphere. There was hardly a place that, if not ruled directly, was not indirectly controlled from a European capital. Europe was a peace and enjoying unprecedented prosperity. Indeed, European interdependence due to trade and investment was so great that serious people were claiming that war had become impossible — and if not impossible, would end within weeks of beginning — because global financial markets couldn’t withstand the strain. The future seemed fixed: a peaceful, prosperous Europe would rule the world.
Imagine yourself now in the summer of 1920. Europe had been torn apart by an agonizing war. The continent was in tatters. The Austro-Hungarian, Russian, German, and Ottoman empires were gone and millions had died in a war that lasted for years. The war ended when an American army of a million men intervened — an army that came and then just as quickly left. Communism dominated Russia, but it was not clear that it could survive. Countries that had been on the periphery of European power, like the United States and Japan, suddenly emerged as great powers. But one thing was certain — the peace treaty that had been imposed on Germany guaranteed that it would not soon reemerge.
Imagine the summer of 1940. Germany had not only reemerged but conquered France and dominated Europe. Communism had survived and the Soviet Union now was allied with Nazi Germany. Great Britain alone stood against Germany, and from the point of view of the most reasonable people, the war was over. If there was not to be a thousand-year Reich, then certainly Europe’s fate had been decided for a century. Germany would dominate Europe and inherit its empire.
Imagine now the summer of 1960. Germany had been crushed in the war, defeated less than ﬁve years later. Europe was occupied, split down the middle by the United States and the Soviet Union. The European empires were collapsing, and the United States and Soviet Union were competing over who would be their heir. The United States had the Soviet Union surrounded and, with an overwhelming arsenal of nuclear weapons, could annihilate it in hours. The United States had emerged as the global superpower. It dominated all of the world’s oceans, and with its nuclear force could dictate terms to anyone in the world. Stalemate was the best the Soviets could hope for — unless the Soviets invaded Germany and conquered Europe. That was the war everyone was preparing for. And in the back of everyone’s mind, the Maoist Chinese, seen as fanatical, were the other danger.
Now imagine the summer of 1980. The United States had been defeated in a seven-year war — not by the Soviet Union, but by communist North Vietnam. The nation was seen, and saw itself, as being in retreat. Expelled from Vietnam, it was then expelled from Iran as well, where the oil fields, which it no longer controlled, seemed about to fall into the hands of the Soviet Union. To contain the Soviet Union, the United States had formed an alliance with Maoist China — the American president and the Chinese chairman holding an amiable meeting in Beijing. Only this alliance seemed able to contain the powerful Soviet Union, which appeared to be surging.
Imagine now the summer of 2000. The Soviet Union had completely collapsed. China was still communist in name but had become capitalist in practice. NATO had advanced into Eastern Europe and even into the former Soviet Union. The world was prosperous and peaceful. Everyone knew that geopolitical considerations had become secondary to economic considerations, and the only problems were regional ones in basket cases like Haiti or Kosovo.
Then came September 11, 2001, and the world turned on its head again.”
And of course, that was before COVID or Ukraine.
What is Going On?
It has always felt VUCA because it always has been VUCA. It has never been otherwise and it sure as hell never will be. But why do people always think it is more VUCA than ever before — as so wonderfully illustrated by the Scientific American quote? I believe that things always feel more VUCA at any moment in history because they have not yet been resolved. It did feel really VUCA in the summer of 1940 because it looked like a fascist nutcase was about to dominate Europe — and maybe the world. It did feel really VUCA on December 8, 1941, when America was reeling from the successful attack on Pearl Harbor — was the American west coast next? But 1940 and 1941 don’t strike us as profound manifestations of VUCA now because now we know about the Allied defeats of Germany and Japan. Those VUCA times were completely resolved and just don’t strike us as ever having been so terribly VUCA, especially compared to what is happening today.
That is because 2022 isn’t resolved. We don’t know how 2023 is going to play out — or 2024. Because of that, it feels really, really VUCA. We interpret that to indicate that the world is more VUCA than ever. But in due course, it will surely drop back down to a VUCA level that is a lower level of VUCA than today and that certainty stems from looking back at resolved history and judging it to have been not very VUCA. Hence, we should wait until that unspecified moment of VUCA diminution to do anything. A novel thought, but we would be waiting for a hell of a long time — like forever — to get to a non-VUCA moment in the world.
Ignore the VUCA hype. There is no cogent argument that can be advanced demonstrating that we are at some sort of peak of VUCA. Who can argue with a straight face that it feels more VUCA in business today than in March 2009 when the financial markets were still in freefall?
It is good, however, to recognize that the world is VUCA — as has always been the case — because that will encourage you to think of strategy as a technique for improving your chances of success rather than an approach that eliminates risk. Because the world is VUCA, nothing can eliminate risk.
However, because the world is VUCA, there is no substitute whatsoever for investing in strategy — now. Waiting to make strategy choices until things get less VUCA is, in fact, a strategy choice — a generally bad one.