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"The flap of a butterfly's wings in the Amazon can cause a tornado in Texas"

If you think this is a cliche or just a theory, think again, it has become reality!! Welcome to VUCA world.

In this article, I would like to present a quick frame work for leaders aspiring to lead in this VUCA world. Is there even any doubt that we are in VUCA world?! Situation today is Volatile, Business is Uncertain, Future technology is Complex and Customer perceptions and requirements are ever changing and Ambiguous.

Will leadership skills of previous century, or even previous decade, would be adequate to face all stake holders, satisfactorily? A leader who is unwilling to embrace the change is indeed, going to face tough road ahead, not only for himself but unfortunately for his organization too.

VUCA stands for Volatile, Uncertain, Complex and Ambiguous. Though this terminology was popularly used by US Army during 1990s, it is being used now, widely to describe, face and take actions in business world too. Following picture from Harvard Business Review, gives more details.

So let us look at this "EDGE" frame work for facing a fast changing (shall we say, "changed"?) VUCA environment. Though it is a vast subject, in this article lets us just touch tip of the iceberg!

1.First letter in "EDGE" frame work - "E"= Excellence

The days of mediocrity, even in our thoughts, are over! A leader MUST create Excellence, in Business, Process and in People.

BUSINESS: The best way to start this journey towards Excellence, is to ask "Why me? ". Why customer should choose your organization, to buy your product or service. This introspection must be done on daily basis. A leader should never think that his products / services are the best. Even if your organization is a market leader. Complacency has no place in VUCA world.

Remember, out of list of Fortune 500 companies (so called "Excellent") of 1960s, hardly about 60 companies are in that chart today. It is a big subject, to analyse why?!

Suffice to say that, today's "Excellence" will be tomorrow's "Ordinary", if the leader is not agile!

PROCESS: How about your process? Process means not just the process inside your shop floor or your office alone, but EVERY process starting from how your security guard welcomes your visitor at the gate of your organization to how your customer feedback is handled. Is it really world class, THE best, and the most efficient?

PEOPLE: Let us talk about your team. In VUCA world, there is no place (let us say, very less place) for "ordinary" people. One needs to be exceptional and it requires an exceptional leader to lead them too. The spirit of "Excellence" to be brought in to very air your teams breathe every moment. It is not whether they are aligned to their target, but it is the question of whether the team is aligned and passionate about the common goal of organization. The normal method of rewarding and motivating by using outdated "Bell curve" will never work in VUCA world.

2. Second letter in "EDGE" frame work - "D"= Digital

Let us accept the fact that our day to day life and office is ruled by Digital medium. There is no way, one is going to run away from that fact.

So how adaptable you are, as a leader, in accepting Digital Transformation, is going to decide on how successful your organization is going to be. These tools make a leader's life more easier. They help a leader to take decisions based on data, monitor the pulse of the organization in real time, eliminate unnecessary human dependent processes, and in many cases can add to your bottom line, if selected and implemented correctly.

The advent of technology has made many digital tools very affordable even for smaller organizations. And in some cases, the basic versions are free! There are digital tools that are suitable to every function in your organization. Do not get awed by names such as AI, I4.0, ML, Big data, AR / VR, RPA, COBOT, Saas, Analytics etc!! They are simple to understand if you take some time to study, or use an expert to explain to you.

Not every digital tool need to be incorporated in every organization. Choose wisely based on your business goals, challenges, investment capacity and returns expected.

No organization is too small to start their journey towards Digital transformation

3.Third letter in "EDGE" frame work - "G"= Go Global

Agreed, many big countries across the world have their own big internal consumption. Then why go global? But, as we discussed, earlier, let us not be complacent.

Going global is not necessarily for your customer, but also for your suppliers, investors, marketing, adapting technologies, using of right advisor and for your equipment. This does not mean ignore local options, but we cannot ignore vast options available across the world too. We are in connected world and not in a cocoon any more!



For example, you may be importing a raw material from one particular country. Or, may be buying from your own country too. If due to any of PESTLE changes in that / your country, if your supplies are affected, then, don't you think, you are affected as well ? How often we have seen this happening? Can we give same excuse to ourselves, again? It is time to expand the horizon to look for more customers, suppliers, investors etc from across the world.

With technology available now, it is easy to make your product visible globally too. (I had addressed this subject of "Online Exhibition" in one of my previous article).

How often we have seen, big organizations shutting down, just because their bad / mismanagement of bottom line? Though the top line is very important, how an organization manages its bottom line, determines its longevity. As someone said, business is a marathon, not a sprint. And for running marathon, you need vital supply of cash, for longer time.

Bottom-line management is a skill in itself. The VUCA world compels a leader to manage bottom line well. We have seen how organizations with big turnover but badly managed bottom lines, suffering due to another VUCA factor, COVID 19!!

How cleverly cash is turned around (velocity), how less raw materials you buy, how quickly you turn around your orders (efficient system), how less is your reworks / scraps, how efficiently you manage energy consumption, how effectively a leader uses / deploy his people, how well a leader manages cash with lenders, investors, banks, customers, suppliers, and in working capital, determines long term success of his organization in 21st Century.

This cartoon from Cartoonstock is self explanatory !!

We just saw a few very critical areas where a leader needs to focus in 21st Century. Though this frame work has only four letters, I am tempted to add another letter at the end. It is "D", which stands for Diversification. I look at TATA Group, Mahindra Group (Examples in India) and Elon Musk with lot of admiration just for the fact that they are REALLY diversified.

Extreme example could be of Elon Musk, diversifying from payment gateway to tunnel borers to electric cars to rockets to send man to ISS!! Yes, every organization may not diversify so much, but can we start in a small way now? There is an old saying "Do not put all your eggs in one basket"

As I mentioned in the beginning of this article, each of the above, is a big subject in itself. This article attempts to bring out possible solutions to the cream of Leadership issues for VUCA world.