We are continuing on the different tools and approaches that will help you improve your project management processes. Today, we're going to talk about VUCA, an innovative set of strategies inspired by military leadership to deal with Volatility, Uncertainty, Complexity, and Ambiguity.

 

VUCA has always been present in our environment and they will always remain unavoidable. The purpose of this article is to highlight the importance of VUCA to help you better understand its impact on your project management processes and why you should deal with it ASAP.

what is VUCA?


I know what you’re thinking, what on earth is VUCA?

According to Nathan Bennett and G. James Lemoine (Harvard Business Review, 2014) VUCA short for Volatility, Uncertainty, Complexity and Ambiguity is a managerial abbreviation that was coined from the United States Army War College describing the conditions resulting from the Cold War. Since then, it has been adopted by organisations in many industries to describe their most significant challenges.

Here's a video introduction to VUCA:

 

 

What does VUCA have to do with project management?

Project management is not the same it was 20 years ago. In today’s digital era, we are constantly being challenged with change and are pressured to innovate. Competition keeps getting fiercer, resources are becoming scarcer and customers are more demanding than ever.

The way the world is -  volatile, uncertain, complex and ambiguous - has really impacted the way project management is being carried out. It makes it difficult for project managers to make informed decisions, efficiently plan, easily adapt to change and find solutions to problems. 

Why should I pay attention to it? 

VUCA shines as a framework that will help you :

  • Anticipate hard to detect issues ("unknown unknowns")
  • Understand the consequences of issues and actions
  • Appreciate the interdependence of variables
  • Prepare for alternative realities and challenges
  • Interpret and address relevant opportunities

Now that you’ve learned about VUCA and its importance, here’s a deeper meaning of each component.

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  1. Volatility

This refers to the unpredictability, speed and magnitude of change. Operating in a volatile environment is being subject to frequent, rapid and significant challenges that are going to disrupt your plans and day-to-day activities. These challenges emerge out of the blue and are of unknown duration.

Volatility increases your inability to differentiate between urgency and importance, which delays the execution of your activities making it very difficult for you to reach your goals.  

  1. Uncertainty

This refers to our inability to predict events and their outcomes. Uncertainty is the result of operating in volatile environments, because no one knows when these changes or challenges are going to occur. Essentially, uncertainty implies lack of knowledge or information, such as our inability to determine the course of future events.

To get a better idea, you can ask yourself this question “How much do I about the situation?”

  1. Complexity 

This refers to the number of components and the relationships between these components in a system and their degree of dependency. 

Complexity is characterized as “a situation that has many interconnected parts and variables. Some information is available or can be predicted, but the volume or nature of it can be overwhelming to process”. This makes it impossible to predict the outcome of an action or decision. 

  1. Ambiguity

This refers to the degree to which situations, information and events can be interpreted  in many different ways. Ambiguity causes mixed messages, conflicts of interests and the inability to understand a situation. Operating in this atmosphere makes it difficult to achieve consensus and reach your objectives. 

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Examples of VUCA in project management

Volatility

Project-based firms are no strangers to delays and changes. Many unexpected events can occur that can impact any aspect of the project, for example, a construction permit comes in late or a client pushes back the approval process, negatively impacting the project schedule. These changes regularly disrupt the normal course of activities, and teams must be able to adjust at all times.  But how can project managers adjust to these changes if they can't see the problems coming?

Uncertainty

According to Bob Mittelsdorf, “uncertainty can create futile efforts on excessive data gathering and analysis”, for example many project-based firms use ERP’s to gather lots of data to compensate for uncertainty. However, this data is not always processed correctly resulting in an overload of information. This makes it difficult to identify risks & make informed decisions.

Lack of information could be a lack of visibility over projects and resources. This will increase your planning risks and will make it difficult for you to forecast your future planning needs, such as identifying whether your teams have available time to support new projects or managing the unexpected like predicting your future human resources needs.

Additionally, project-based firms demand adaptation and flexibility and as a result require processes that allow them to adapt to changing needs. This changing environment is caused by the on-going technological advancements and the increase in competition leading to a higher level of volatility and as a result uncertainty.

In order to stay competitive, project-based firms firms must differentiate themselves from the rest and therefore must innovate. However,  innovation is defined itself as "a process that is fraught with uncertainty”.

Complexity

Project-based firms can work on dozens or hundreds of projects. The simple fact that there are many projects to manage at the same time increases complexity. Each of these projects is assigned different resources and deadlines. As mentioned earlier, complexity is characterized as "a situation that has many interconnected parts and variables”. Resources, project phases, deadlines are all interconnected variables that are interdependent.

For example, some resources (employees) could be shared across multiple projects, a project manager would have to coordinate every single employees’ time and schedule to make sure they can reach their objectives and deliver their projects on time. For the project manager to do that, he/she needs to know how much time each resource spends on each activity, whether they are in over-capacity or under-capacity and whether they are able to take on new projects.

Furthermore, these projects are most probably broken down into phases, which also have their separate goals and deadlines. Project managers then have to make sure that each phase is executed on time for the project to be a success.

This means that projects and project phases depend on each other because some tasks have to be completed before your employees can start the next task and some resources depend on other resources to carry out their activities and so on. This implies that the success of your project depends on whether your employees efficiently executed each phase of the project.

Moreover, there are many stakeholders involved in the execution of a project. Each of them have their own perception, definition and objectives. Stakeholder management becomes complicated and overwhelming. This also generates issues related to quality, duration, cost and performance. 

Ambiguity

In most working environments there is ambiguity when you have to make decisions without having the whole picture. Finding the right kind of information can be quite a challenge for project managers especially for firms that are spread over different geographical locations.

Standardized documents are often shared and tracked by different team members, but it’s not always easy to know where the latest version is located. These documents are crucial not just during the project, but also once it is over to keep a trace of how it went.

It becomes especially challenging for project managers to fulfil their duties when for example, project objectives are not outlined properly, or when the needs and requirements of a client are not well understood. 

Resources could also have a hard time achieving their objectives when their roles and responsibilities are not clearly defined. How are they supposed to work efficiently if they don't know what is expected of them?

Moreover, in every organization communication is a recurring problem. If every department in an organisation is using a different communication channel then the fluidity in the flow of information becomes problematic and impacts the overall efficiency of the business. 

Equip yourself: How to respond to vUCA

Traditional management methods are not sufficient to address the volume of these changes. While there's no way to get rid off VUCA you can definitely take steps to mitigate its risks and reduce the impact it has on your day-to-day activities.

VUCA Prime proposed by Bob Johansen in 2007, is a framework that offers practical approaches necessary to help you get your work done. This approach will help you control the impact of changes, manage risks and  improve communication flows. 

Here's how any project manager can deal with VUCA: 

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1.  Vision 

When things keep changing you need to make sure you're still heading in the right direction.  As a project manager you should emphasis on your goals and objectives, you want to make sure your project gets delivered no matter what. 

Therefore you would need to focus on the activities that will bring you closer to that goal. One way to do that is to distinguish between activities that are important and urgent

The idea here is to avoid distractions and always think about the big picture.

2. Understanding 

To reduce uncertainty, project managers must work with data that is accurate and up-to-date. How can you make informed decisions if you're relying on past data? 

As mentioned earlier, project management is not the same it was 20 years ago. Project managers must take advantage of the new robust tools that allow data analysis and a data driven decision making process. Project managers should look into implementing a project management software

  • What projects should we prioritise and when?
  • Are my employees working on the right activities?
  • Are there enough resources to achieve what is planned?
  • Do we need to hire someone for this particular project?
  • Are my employees overworked?
  • Are my employees spending enough time on the right activities ?

Additionally, it's crucial to take into account the power and interest of each person involved in any given project to identify the best strategies to satisfy everyone. 

3. Clarity  

In today's complex work environment, communication is a vital project management skill.  According to Albert Durig, communication can be the source of strong alignment and synchronization between moving parts of a complex project. It becomes all the more important when coordinating your teams' efforts. 

Furthermore, Bob Johansen explains that project managers must be very clear about what they are doing and what everyone should be doing. Your employees will be able to know exactly what went wrong and why if they have clear roles and responsibilities. They'll be able to deal with issues before they impact other activities down the line. 

Since there are so many stakeholders involved in the delivery of a project, clearly outlining everyones purpose will definitely improve interactions.

To battle complexity, project managers need to communicate effectively.  

4. Agility 

If the situation is not clear, project managers must have flexibility in order to respond quickly to changes. 

Agility implies being proactive instead of reactive, it's having alternative strategies or contingency plans ready if anything goes wrong such as maintaining a robust risk management process.

In project management, risk analysis is a proactive method to forecast negative events (risks) that could occur in a project in order to be better prepared or to reduce their likelihood. Moreover, project managers need to be aware of their teams capabilities to adapt quickly to the changing environment.