Management in the (post-) COVID Era: Tools for Turbulent Times with the VUCA Approach

How do you manage and lead in a covid world? What is a business paradigm that can help you deal with the turbulent and uncertain world that we now live and work in?

My response as a business researcher, educator, editor, and consultant to this question is: look no further than the validated VUCA approach – a management paradigm designed for the age of uncertainty.

In this short article I outline why the covid era is a perfect application context for VUCA management. I briefly describe the elements of the VUCA approach and how to apply it to your work. You’ll also learn why I have decided – 5 years ago – to make VUCA the corner stone of the MBA program that I lead at the University of St. Gallen.

Premise: COVID = VUCA

Since the COVID-19 pandemic has unfolded in late 2019 and early 2020, doing business and managing in general have become increasingly demanding, as sales are more volatile, planning is more uncertain, collaboration patterns are more complex, and digital opportunities (and their risks) are more ambiguous.

Although the VUCA strategy paradigm has already emerged in the 1990s, the corona crisis is now a perfect storm in terms of the VUCA dimensions.

The VUCA acronym stands for the new normal that is characterized by a greater degree of Volatility, Uncertainty, Complexity, and Ambiguity. It does, as we will see below, also represent a pragmatic approach how to handle such times – namely through Vision, Understanding, Clarity, and Agility.

We will look at what this means for business and management in a minute. But first: In what way is the corona pandemic itself a VUCA situation?

First, it is - as we witness right now - a highly volatile phenomenon, as cases of new infections fluctuate highly (as do the local responses by authorities). Second, it is extremely uncertain how the second wave will now unfold, as is the advent of a well working vaccine. Third, in terms of complexity, we do not (yet) understand how and why the virus affects different people differently (for example with regard to re-infections). We also do not understand well how the shutdown, the subsequent stimulus packages, and the current restrictions affect the economic outlook in the midterm. And finally, regarding ambiguity, while the main effects of the covid pandemic are certainly negative, there have been some positive tendencies as well, such as a temporary reduction in CO2 emissions, a boost for the digital maturity of many organizations, a renewed interest in mindfulness or in strengthening the immune system, a stronger recognition of the importance of health care workers, and a lively debate about the role of global (and local) cooperation in today’s interconnected world.

So, if the COVID-19 crisis has all the traits of a VUCA situation, how does the approach help us deal with it?

The VUCA approach gives you a concise diagnostic lens, a flexible solution mindset, and visual tools to manage uncertainty.

In a nutshell, it offers a concise diagnostic lens (to attain distance, perspective and options), a flexible solution mindset (to plan robust but also flexible steps forward), and a set of visual tools and techniques to manage (and communicate) in an uncertain world. Here are now a few examples of the diagnostic questions and tools from the VUCA repertoire.

Elements and Uses of the VUCA Approach

To employ the VUCA paradigm as a diagnostic lens and as a planning and communication approach, you can use its four elements to attain distance to your situation and identify key priorities for moving forward. Whenever you are facing a turbulent environment, don’t panic or rush to hectic actions, but rather ask yourself these key questions and apply the following tools:

Volatility: What are the lowest and highest points that I must expect (regarding sales, supplies, problems, or other issues) and how can I prepare for those extremes through slack resources and backup plans?

The curve diagram is a great tool to conduct volatility analysis (such as tracking and predicting the volatility of your demand). You are all very familiar with this graphic, as it has been widely used to show the fluctuations of corona cases and the maximum capacity of the health sector (the now infamous “flatten the curve” chart).

You can help your staff deal with that volatility by offering a strong Vision where you want to go in spite of all this fluctuation, and break down that vision into actionable goals and activities. A vision chart, like the one depicted below, can support you in this endeavor.

Uncertainty: You can gain more understanding about likely futures when you ask yourself what the most likely mid-term business scenarios could be and how you can keep your options open for most if not all of them. A great tool for this type of visual Understanding is the scenariogram shown below where you generate four different likely futures by focusing on two key drivers. This way you can gain a deeper understanding about your options in four different scenarios.

Complexity: What are the key drivers of the current development and how can I monitor (or even influence) those? To achieve Clarity on this question, you can use the time-tested loop diagram, of which you can find a simple example below. Try a website called loopy (https://ncase.me/loopy/) to also clearly show the dynamics of such a system.

Ambiguity: When faced with ambiguous trends, ask yourself these questions: What are useful and diverse perspectives on this topic or trend? Who views this trend in what way? What are their positive and negative stakes in this?

A tool to help you understand ambiguous issues from different points of view is the stakeholder sun. It enables you to look at an issue from the perspective of the interest groups who have something at stake with that topic. What are their main goals regarding this issue and which should you address with Agility (and where wait)? Mapping this out lets you explore the ambiguities of a topic better and understand conflicting viewpoints (the lightning bolt in the example below), as well as areas for immediate versus delayed action.

In Conclusion

Of course a fool with a tool is still a fool, but using these VUCA tools can help us put the chaos into perspective and pinpoint key issues to address, find new options to move forward, and create alignment among our team members. I have found the VUCA dimensions to be a constructive conversation starter for hectic times and an effective way to de-bias decision making during a crisis. That is why, at St. Gallen University, the ISP-MBA program has adopted the VUCA paradigm already in 2015 as the overarching framework for all courses. MBA Students from more than 40 countries have embraced the approach and the tools discussed in this post and found them a useful toolbox for a world that is ever more volatile, uncertain, complex and ambiguous. They have adopted a VUCA mindset that doesn't lament about our chaotic times, but views them as a formidable challenge to cultivate your curiosity, courage, and willingness to change.

What helps you keep your sanity and remain effective in the COVID era? I would love to hear your suggestions in the comments section.

PS: The illustrations in this post are from our book “Sketching at Work” that you can order at: https://sketchingatwork.com/shop/