VUCA in Finance

VUCA stands for volatility, uncertainty, complexity, and ambiguity. While going through school and work, I have undoubtedly experienced all the facets of VUCA. I am a finance major and currently intern in the finance department of a large Silicon tech company. I do not think, in my experience, that finance is fast-moving. It feels pretty slow, there is a lot of red tape you have to go through before any changes can be made. I would not include volatility as a part of my everyday job. I also don’t think the rules of Finance are ambiguous if you take some time to understand them. They are complex, and there are many of them, but it is easy to research to clarify concerns. I think that the most relevant facet I could apply to my daily activities at work would be complexity. There is such a thin line between making a profit and committing tax fraud for a corporation. In Finance, our job is to make sure that line is not crossed.

VUCA in the workplace

VUCA is used to navigate turbulence in business. Agility can be used at both the company and employee level. Agile employees can use adaptive performance. This includes learning, crisis handling, and coping. 

On a company level, agility looks like performing a SWOT analysis, monitoring the geopolitical environment, and responding to stakeholders’ concerns. Public relations are a good example of VUCA use. Public uproar can be unpredictable and swift (Volatile). Sometimes firms are uncertain about what stance they should take to mitigate concerns (Uncertainty). The issues they must address require nuance and there is no response that can please everyone (Complexity). 

It is important for a firm to do proper research before deciding, so they do not seem insensitive to the issue (Ambiguity). Agility is important in dealing with crises because you need to react to the changes as they are happening, or risk falling behind. When handling turbulence, VUCA is just one tool businesses should implement. It should also be paired with agile activities, and define what obstacles stand in the way of success. An organization needs to identify what its VUCA is before it can begin intervention. In recent years, one of the top trends that caused turbulence for businesses was having to collaborate with remote work. Leaders at every level should perform a VUCA analysis to address concerns relating to their department. The best ways to implement agile practices are transparency, client focus, teamwork, and iterative learning. 

The status quo is a common barrier for VUCA. VUCA often requires change, but many orgs have trouble straying from “what they have always done”. Given that we have an ever-changing work environment, many employers are looking for workers with adaptability. They want someone who is functional with technology and can work from home, but they also want the employees to come back to the office at the drop of a hat. At an employee level, it is relevant to you in situations like this. You need to adapt to the changes, without disruption to your work tasks. The use of VUCA in the workplace has been on the rise since the start of the pandemic. It’s important for those entering the workforce to be familiar because it may be expected of them.

All about VUCA

VUCA was popular in the early 2000s and made a comeback during the pandemic. VUCA stands for volatility, uncertainty, complexity, and ambiguity. Volatility is how fast the changes around us are happening: the speedy changes lead to uncertainty. Complexity is analyzing the number of factors it will take to deal with the changes. Ambiguity is how well we understand the changes going on around us. 

Each firm has different problems that may fall under VUCA. For example, oil companies dealing with conflict in the Middle East. Since natural oil is commonly extracted there, it is going to put a strain on operations. For a chef, war in the Middle East isn’t going to affect their work. A chef would have the pandemic in their VUCA because maybe people ate out less during COVID. There are two very different challenges for the chef in comparison to the oil company. VUCA gives them both the opportunity to overcome their issues. 

Agility is the most important skill when using VUCA. VUCA can be used in jobs with volatile environments to overcome change. On the employee level, VUCA can give an edge against competitors. Employees possessing agile skills will climb ranks faster than those without. VUCA skills are highly sought after for managing positions.

How might we help educators and learners thrive in a VUCA world ...