Last week, we started the discussion on VUCA and how exploring it can help towards surviving and remaining profitable as a business in these tough times. As a reminder, VUCA stands for:

V = Volatility – The nature, speed, volume, magnitude, and dynamics of change; MEGA SITAMA – The nature and dynamics of change, and the nature and speed of change forces and change catalysts.

U = Uncertainty – The lack of predictability, the prospects for surprise, and the sense of awareness and understanding of issues and events. The lack of predictability of issues and events.

C = Complexity – The multiplex of forces, the confounding of issues, no cause-and-effect chain, and confusion and the chaos that surround an organisation.

A = Ambiguity – The haziness of reality and the mixed meanings of conditions, the potential for misreads, and cause-and-effect confusion.

Let us see how two different managers attempted to adjust to increasing turbulence in their companies’ business environment, with dramatically different results for them and their organisation; which will help to graphically tie VUCA theories to realities.

As a backdrop, the two managers work in a company providing professional services to a market segment that has been growing rapidly and globally. As the overall global business environment grows increasingly complex and competitive, many organisations of nearly all sizes are recognising the need to avail themselves of these services. Moreover, the wave of new regional and global aspirants emanating from emerging markets, which in the past have dismissed the need for such services, are developing into a real growth market, with all the opportunities and challenges that accompany working with different cultural norms and, in some cases, markedly different business models. After bouncing around in low growth for much of the 2000s, this service-providing organisation has seen double-digit YoY growth in the last three years as their customer base emerges from the recession and faces even greater growth and organisational challenges from the VUCA world.

On the downside, this particular segment is very fragmented with no major provider accounting for more than 5% of the market; it is also highly substitutable, with several different types of providers ranging from large and established, to small or one-offs; and it is more competitive, with new entrants from different sectors and now from emerging markets as well. Moreover, the segment has not developed clear-cut “gold standards” for what constitutes a high-quality customer experience. In a space which still contains some alchemy, one buyer’s “wow” might be another’s “ho-hum.”

Furthermore, the segment is a high-touch, relationship-oriented business which still suffers from a dearth of experienced professionals on either the provider or the buyer sides. Many players are still in “learn” mode while they seek to professionalise, especially on the provider side, where employees must master multiple skills sets very rapidly to keep up with the steep and increasingly dynamic growth opportunities. In fact, like other fast-moving organisations trying to keep pace today, working in this company has been characterised as being in a “permanent nose-bleed learning environment.”

Partly as a reflection of this, the provider’s senior leadership changed about three years ago, with a new Chief Operating Officer (who is the chief executive of the unit) coming in from a much more established competitor. This COO brought a game plan that featured several critical changes to the underlying business model, as well as an ambition to grow the business both financially and globally faster than it had ever done.

Finally, this service provider’s overall holding company has, itself, been on a pretty turbulent ride over the last decade, with several “spiky” financial and organisational challenges at the macro level. This has combined to produce a situation where the service provider has had to operate in an extremely “VUCA” organisational climate even while working with its clients’ own VUCA business environments. In other words, for both good and bad, this service provider has been sailing through high seas almost continuously for several years, and has many bruises to show for it. By the same token, many of its leaders have had to develop the kind of adaptability that it takes to thrive in a VUCA world or move on.

We will continue with this business story and training material next week.

•Lawrence Nwaodu is a small business expert and enterprise consultant, trained in the United Kingdom and the Netherlands, with an MBA in Entrepreneurship from The Management School, University of Liverpool, United Kingdom, and MSc in Finance and Financial Management Services from Rotterdam School of Management, Erasmus University Netherlands. Mr. Nwaodu is the Lead Consultant at IDEAS Exchange Consulting, Lagos. He can be reached via nwaodu.lawrence@hotmail.co.uk (07066375847).

Update news