A Tiger by the Tail

VUCA is back!

Geoff Wilson

Volatility

Uncertainty

Complexity

Ambiguity

I’ve written about these things and their impact on top management thinking in the past…notably during the COVID Pandemic.

Guess what?

VUCA is back.  Or, maybe it never did really leave.

The question for you as an enterprise executive is whether the way you are managing today reflects the uncertain reality you face, or whether you spent the past 5 years lapsing back into routine.

There’s nothing wrong with routine, per se.  What can become wrong with it is routine that operates at a pace slower than the environment changes.  How fast is your routine?  How fast is your evolution cycle?  How quickly do you learn?  How open are your eyes?

These are the core questions you have to ask.

Any enterprise leader who sources or sells across borders or who does business with those who do, has the proverbial tiger by the tail.  Basic business decisions in today’s policy environment come loaded with risk.  And, while there are plenty of obvious risks that any semi-conscious executive should have known about for the past year (like, gulp! tariffs), those may not be the ones that impact your organization.

After all, most companies can do pretty well with risks that they see.  In a VUCA environment, it’s the risks you can’t see that matter.  The proverbial Tiger has a fat tail, just like the probability curve your strategic risk management approach should have.

So, while you may see “tariffs” as the primary business risk of today’s environment, you might miss the deterioration of consumer credit. You might miss the corrosive impact of normalized interest rates on your demand environment.  You might miss the impact on your workforce of vast changes in our social fabric wrought since 2020.

In other words, you may think you have your hands full with risks that are happening in the fat part of the curve, and you risks taking your eye off of risks that are around the corner.

Sure, there are systematic ways of handling this…read the March 2020 article I linked to above.  But the journey to true risk management in a VUCA environment is to acknowledge what you simply don’t know.

How do YOU keep a hold of the Tiger’s fat tail?