Systems Thinking – A Key Competency for a ‘VUCA’​ World

“One of the greatest problems we face today
is how to adjust our way of thinking to meet the challenge
of an increasingly complex, rapidly changing, unpredictable world.”

– Edgar Morin

More than yet one more trendy acronym, VUCA was originally coined in the late 80’s by the US Army War College to characterize the post Cold War era. They discerningly foreseen and accurately captured four prevalent and inherent characteristics of our current world: Volatile, Uncertain, Complex, and Ambiguous. This framework has been subsequently leveraged in the business field as it defines well today’s chaotic, turbulent, unstable, and rapidly changing environment.

Systems Thinking is definitively required to survive and prosper in a VUCA environment. However, it is still relatively unknown, largely underused, and even less mastered by leaders and organizations. This is unfortunate, as it brings 3 complementary capabilities that together enable to address today’s challenges from a VUCA world. These are the ability to see a whole (holism), to integrate different points of view (pluralism), and to reflect on fact and value judgements (criticism).

Watch Systems Thinking for a VUCA World, which illustrates a VUCA world and these 3 key Systems Thinking’s capabilities.

VUCA reflects today’s business environment.

Each letter of the acronym VUCA represents a unique challenge that companies face nowadays. Acknowledging and understanding this new context and its implications is critical. Leaders should be able to recognize these situations when they arise and understand their nature and implications to provide an appropriate response.

Volatility

Volatility is the pace and magnitude of changes over time. It creates an unstable and unpredictable environment. In a volatile environment, changes are sudden, rapid and significant. These abrupt, swift, and intense shifts bring instability. Changes are likely but come without notice and at varying forces. They are not following a predictable trend or repeatable pattern. Both the situation and the likely associated causes and effects can be understood but forecasting the timing and magnitude of changes is difficult. 

Uncertainty

Uncertainty is the inability to predict events and determine their level of impact. In an uncertain environment, the cause and effect are known and understood, but it is difficult to assert whether a certain event will happen and whether it will have meaningful consequences. Past events and issues can’t be used as predictors of future outcomes. Without being able to establish valid forecast, it is challenging to make the right decisions and to prepare for what will come next.

Complexity

Complexity is the result of interconnections, interrelations, and interdependencies between a large number of parts and factors. In a complex environment, the link between cause and effect are hard to find. The non-linear interactions and feedback create a complex dynamics. A great deal of effort is required to gather and understand the large volume of information and intricate nature of relationships to account for. Since cause and effect are not linear, it is a challenge to discern which development had or will have which consequence.

Ambiguity

Ambiguity is the lack of clarity about a situation and hence the difficulty of adequately interpreting what events mean and what effect they may have. In an ambiguous environment it is hard to ascertain the “what, when, where, who, how, and why” of what is happening. This results from the haziness of reality and the mixed meanings of events. Information is incomplete, contradicting or too inaccurate to draw clear conclusions. The same information can yield multiple and competing narratives, perspectives, and interpretations. Ambiguous situations are novel, unusual, or emergent where the cause-and-effect relationships are unknown or unclear.

Systems Thinking is required to address a VUCA environment

Executives are often bewildered by this context, overwhelmed by its challenges, and puzzled about how to cope with it. Indeed, under VUCA conditions, it is not easy to assess how things truly work and take the right course of action. To thrive in a VUCA world, leaders and organizations needs to revisit their problem-solving and decision-making practices and competencies by applying Systems Thinking. Indeed, it is an appropriate and relevant approach to address a VUCA environment thanks to the following 3 key capabilities.

Holism

Systems Thinking enables to elicit and understand emerging wholes from underlying closed-loop dependencies, connections and interactions between different part. It is about making sense of relationships between different entities associated with a given situation to understand the overall dynamics. The intent is to step back from wicked problems to clarify interrelationships and interdependencies so as to appreciate complex realities. The goal is to achieve a better appreciation of the wider dynamics in order to improve the situation. 

Pluralism

Systems Thinking enables to probe and integrate multiple often contrasting perspectives amongst stakeholders involved with and affected by the situation. It is about surfacing and engaging various point of views associated with a complex issue to frame a multiverse reality. The intent is to take into account various differing human perceptions of the same problem to enhance possibilities of resolution. The goal is to best direct responsible joined-up thinking with action to build a mutual understanding of the problem and a consensus about sustainable improvements.

Criticism

Systems Thinking enables to explore and reflect on boundary judgments about the relevance and validity of empirical observations and value considerations. It is about investigating and reconciling with responsibility conflicting interests amongst different actors derived from ethical issues and power relations. The intent is to express boundary issues associated with the inevitable partial and fragmented understanding of complex realities as well as partiality amongst different stakeholders whose perspectives are laden with values. The goal is to gain an awareness of the limitations derived from both judgment of facts and judgments of value when building a representation of a situation and seeking ways to improve it.

Embracing Systems Thinking today

Systems Thinking allow to solve challenging issues and validate strategic decisions in a VUCA environment. It brings the ways and means to make sense of the overall dynamics and perspectives of a problematic situation and respond with an effective and lasting solution.