VUCA in a Service World – By Suzanne Van Hove

VUCA has been a very popular term in geopolitical and economic discussions, describing everything from commercial environments to technological change. It’s a great phrase – remember, it came from the US Department of Defense during the beginning of the Cold War. As an acronym, VUCA defined the global environment at that time:

  • Volatility
  • Uncertainty
  • Complexity
  • Ambiguity

It was a perfect acronym – we had a very unstable global atmosphere with an unknown timeframe. We knew the cause of this atmosphere, but could it change? We didn’t know. It was a complex situation with many moving factors – all with very scary, very real and dire possibilities. There was NO precedent for this unstable environment – we were in the “unknown unknowns.”

Well, I keep coming across descriptions of today’s business environment with digital disruption and digital transformation discussions using “VUCA” as the main descriptor. I believe the environment is volatile, but we have a better understanding of the technological impact – just think how blasé we now view Uber, Airbnb and the like. A few short years ago, these services were the exception and not the rule. I have come to believe we need to change our thinking. Yes, I’ve used VUCA to describe today’s service environment but now, I believe we have a level of understanding of the impact of ‘digital’ to today’s product and service world. What we don’t have is a clear way on how to deal with ‘digital.’ Therefore, we need a new view of VUCA.

Our new Service VUCA™ is strategically and operationally focused. Consider these four elements for today’s product and service market:

  • Velocity – organizations need to define and understand the magnitude and direction of their service delivery to fulfill consumer demand (with their very short attention span!)
  • Ubiquitous – services are pervasive throughout our communities – wherever we look, services are available – when they aren’t, business suffers, therefore, our thinking needs to expand within our markets to fully address the vertical and their many consumers
  • Command – organizations need to command NOT control the actions and direction of their product and service delivery. The ‘commanding actions’ will be based on the organization’s defined governance and service management principles.
  • Agility – organizations must be structured in a manner that allows them to change direction as the market (and supporting governance) dictates.

These four elements are not rocket science when assessing today’s product and service environment. We all know the need for velocity and agility. I thoroughly believe the concept of ‘service’ is more pervasive than ever, but organizations must continue to advance their attitude toward service delivery as an organizationally wide responsibility – not just a single capability (like IT). This is the foundation concept of VeriSM™.

The most difficult element of the four is the one of command. Command is different than control – command provides a direction without an implication of specific procedure of control. Mario Andretti, a popular and successful race car driver, once said, “If everything is under control, you just aren’t going fast enough.” How appropriate for today! Command is key – it comes from and reflects the organization’s strategy and governance and allows for innovative ways of achieving them. I read the other day that the lack of a strategy or a ‘bad’ strategy was the number one cause of business failure (based on a 25-year study of 750 bankruptcies) and strategy was the root cause of poor performance 70% of time (economic downturn only accounted for 4% of poor performance)!

This is the new direction of business success – command a direction and loosen the control tendencies. A favorite phrase of mine comes from the Agile world and that is this: “Fail fast.” We live in an age of innovation and innovation demands failure – we must accommodate and allow for those “learning actions.” Am I recommending dropping all the traditional management methods? Absolutely not. But, there needs to be a re-evaluation and adjustment. For example, in 2017, the US Federal IT Dashboard shows that over 70% of the IT spend, government wide, went to operating and maintaining legacy systems! What is implied here? Maintaining control over the infrastructure – keeping the lights on. Additionally, CIOs spent approximately 72% of their budgets on existing IT systems and 28% or less goes to new projects and innovation. Again, CIOs are looking to maintain control. Maintaining “yesterday” is not the solution for creating the new future! Fast today is too slow for tomorrow.

Where does this leave us? We live in an ever-changing and evolving world and successful businesses must embrace these changes or dictate the change to remain viable and successful. Is a 5- to 10-year strategic plan viable anymore? I think it is, but it must be broken into 6-month ‘chunks’ to accommodate the fast-moving, ever-changing environment. The latest volume of VeriSM, Unwrapped and Applied (to be released at the end of October 2018), provides great practical advice and information to help organizations define ‘better’ strategies as well as solidifying their direction when embracing the digital world. Take the time to define the strategic intents and ensure the information is pervasive throughout the organization (less than 50% of organizations have a universal definition of strategy or a common language for a strategy!). With this foundation, a good strategy, and well-defined mission and vision, the Service VUCA can be addressed!

These four elements of the Service VUCA – velocity, ubiquitous, command, and agility – become the operational principles for the entire organization. From a VeriSM perspective, they become guardrails for the Management Mesh so that products and services are delivered to meet consumer needs and organizational objectives. Now, based on consumer requirements, appropriate management practices and technologies can be exploited to meet those requirements while staying true to the organizational strategic direction. Remember, command not control.

It’s time to stop using VUCA as a possible ‘excuse’ for poor performance and embrace the environment of today. We know we are in the unknown unknows – turn it around and make the situation a new and exciting path for your organization, dictate the future and create your own success! Check out the practical advice in VeriSM™: Unwrapped and Applied to start your next journey!

 

 

Please note:

Statistics in this article are from www.strategyskills.com and https://enterprisesproject.com/what-is-digital-transformation.
VeriSM is a trademark of the IFDC.
Service VUCA is a trademark of SED-IT.