VUCA World: Do uncertain times need the certainty of purpose.
Saqib Shaikh- ACA, CIMA
Accounting Advisor for Complex Transactions | Financial Reporting Manager | Auditor | Experienced Manager with 15 years of expertise in IFRS, FRS 102, and US GAAP
We live in a world that’s constantly changing, becoming more unstable each day, where changes big and small are becoming more unpredictable – and they’re getting more and more dramatic and happening faster and faster. It’s becoming more difficult to anticipate events or predict how they’ll unfold; historical forecasts and past experiences are losing their relevance and are rarely applicable as a basis for predicting the shape of things to come.
“One size fits all” and “best practice” have been relegated to yesterday – in today’s world it’s rare for things to be completely clear or precisely determinable. Not everything is black and white – grey is also an option. In a world where the “what” takes a back seat to the “why?” and the “how?”, making decisions requires courage, awareness, and a willingness to make mistakes.
“The biggest risk is not taking any risk. In a world that is changing really quickly. The only strategy that is guaranteed is to is not taking a risk.”- Mark Zuckerberg
How do you handle uncertainty and ambiguity? Maybe you have never given it any thought. However, the global spread of a virus and an economic meltdown will test the grit of everyone. The increase in volatility, uncertainty, complexity, and ambiguity (VUCA) means that you and your business must seek new orientations and take a fresh approach to management. The question most leaders are facing, then, is this: How do we move forward in such uniquely uncertain circumstances?
“The Greatest danger in times of turbulence is not the turbulence; it is to act with yesterday's logic." –Peter Drucker
To be sure, businesses need to address the current environment with a sense of urgency. The burning platform is real. But it’s also important to recognize that the world is in transition and the new operating models are still being defined. In many ways, organizations need to recognize that they should not focus on their final destination, which may be unknown, but make sure they are taking the right steps toward embracing purpose as a guide for their journey.
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"Efforts and courage are not enough without purpose and direction." -John F. Kennedy
The problem is in uncertain times if organizations do not have a sense of purpose, they panicked, they react. They sometimes don't know what to do, they become stymied, they get stuck. The purpose is the core energy that fuels everything else, big and small. Purpose gives a sense of calm that even in the face of uncertainty, they have the sense that they are going somewhere and they know how to get there? They become better equipped to find a way around. It is a route of innovation, it is a route of finding a way over and around things. The purpose is essential in hard times and it is the north star that helps companies to not only manage the disruptive environment but thrive. It also helps companies get the best out of their people and operating environment. The great and glorious legacy of a built to last organizations is to live with purpose. Organizations need to take following focused actions in the direction of a worthy purpose to thrive in these uncertain times.
The initial crisis phase, the “now,” has a focus on survival: safeguarding human life, securing financial stability and establishing a risk command centre. After this initial crisis phase, organizations are beginning to focus attention on the mid-term, the “next.”
What comes next will have two business imperatives: the need to adapt operations and increase resilience. Companies will need to think about how to re-engage with their workforce; how to fix broken supply chains; how to achieve a lower and more agile cost base; and how to reduce operational risks and ensure customer access.
As they decide on these priorities, they will also need to think about what comes after. Changes in the global economy, technology adoption, societal norms and consumer behaviour will together shape this future. Companies will need to ask: What can we do now to make us ready for what lies beyond? As organizations transition to this new phase, they must also consider what is to come beyond, as crises of this scale are sure to reshape the competitive landscape.
According to one article posted by Yuval Noah Hariri ( a renowned historian) said this in financial times article: "When choosing between alternatives, we should ask ourselves not only how to overcome the immediate threat, but also what kind of world we will inhabit once the storm passes. Yes, the storm will pass, humankind will survive, most of us will still be alive — but we will inhabit a different world. The world on the other side of the crisis may look very different, with different norms, rules, competitors and value propositions. Flexibility has always been a business advantage but it will now be critical to survival.
"When the rate of change inside an institution becomes slower than the rate of change outside, the end is in sight. The only question is when."- Jack Welch
Heading Information Security, Risk & Governance @ Seddiqi Holding | UAE
4 年Very well drafted and brilliant thought process!!
Internal Audit Consultant, Qatar
4 年Great Article to understand VUCA in businesses! Companies will need to think about what can do now to make changes in the global economy, technology adoption, societal norms and consumer behavior. Businesses need to address the current environment by integrating their strategy with PURPOSE and DIRECTION as you mentioned. ?
Auditor | IFRS Expert | Academic | Chartered Accountant | Forensic Accountant | Philanthropist
4 年Mashallah good writeup
Business Development | Real Estate | Investments | Bahria Town | Luxor Builders
4 年Great
Assistant Director HR - SMIU | Double Gold Medalist
4 年Good read