Strategy In a VUCA World—Part 2

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Categories: Strategy

By Lynda Bourne

In part one of this post, I introduced the management concept VUCA, which stands for volatility, uncertainty, complexity, and ambiguity.

Managing VUCA effectively at the project level should not be underestimated: The agility and decision-making needed to respond to VUCA will inevitably have effects on the outcomes of projects and programs and, consequently, the direction of the organization.

Naturally, there will be a difference between planned and implemented strategy. One approach is to see this gap as “strategic non-alignment” and assume it’s bad. The alternative is to see the gap as strategy that emerges from the work of the organization and changes in the environment, then actively manage its effect to capture as much value as possible.

This idea is not new. It’s been nearly 40 years since the concept of emergent strategy was developed by academic and management author Henry Mintzberg. This concept seeks to create a framework that can identify and act on emerging strategies, resulting in a more incremental approach to strategy formulation. Developing strategy from the bottom up may be a novel concept for many organizations but academic studies suggest this is an important value-adding process. 

Projects and programs are a rich source of VUCA, and almost everyone says successful project management offices (PMOs) and portfolio managers should have a strategic focus. Given that, I suggest it’s time to start conversations with your executive management about identifying and managing the emergent strategies that are appearing in your organization as a consequence of projects and programs responding to VUCA. This will maximize the value created and influence the next iteration of formal strategic planning.  

In their 1985 paper Of Strategies, Deliberate and Emergent, Mintzberg and fellow academic and author, James A. Walters, concluded by suggesting “strategy formation walks on two feet, one deliberate the other emergent.”

The challenge for PMOs and portfolio management professionals is to engage with the gap between implementing strategy and adapting strategy. They also have to engage with the challenges that arise from allowing sufficient agility and flexibility to maximize value in a VUCA environment without sinking into undirected chaos. 

By adapting these elements to the strategic levels of the organization, you may be able to reduce the potential chaos of VUCA within a project or program:

  1. Use a staged, adaptive approach to planning. We really don't know that much about the far future.
  2. Be agile. Act quickly to manage emerging issues and problems—things will not get better on their own.
  3. Be adaptive and flexible. When you need a new plan to achieve the project’s objectives, be prepared to make the changes.
  4. Expect the unexpected. Things happen—watch for approaching Black Swans.
  5. Use emergence to your advantage. Seize the opportunities you did not expect.

How do you reduce the potential chaos of VUCA?

Posted by Lynda Bourne on: May 18, 2017 09:51 PM | Permalink

Comments (18)

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Good points..

Good article, flexibility and agility are important in this type of environment. I also this risk identification, capitalization, and aversion are essential to managing this type of situation. I would love more input from the community on how they address risks, and the corresponding concern of senior management in this environment.

Effective risk management is essential Renee, but while it is good at dealing with identified uncertainties, it is incapable of dealing with the emergent issues and opportunities associated with volatility and complexity - the concept of 'emergent' is defined by the fact you cannot predict it.

Lynda, good posts. I guess even though you can't predict the emergent part of strategy in detail as the need and the respective decisions following it arise, what you can do is to control it by having a deliberate process that prepares and guides the organization and feeds the resulting emergent part of strategy back into the loop of preparing the deliberate one...

Agree Thilo! There are really two interlinked elements, one is dealing with emergent issues 'on-the-ground' as part of the day-to-day business of running a project or program VUCA-Prime mentioned in the first post is one way of doing this. The other is having the capacity to reflect on what is emerging and use those insights to help develop strategy, and particularly to seize emerging opportunities.

Very good point! It seems to me that although there is a trend of handing down into the organization at least some authority concerning strategy this is more about fire-fighting issues. Seizing opportunities is a rare thing, maybe because there is reluctance to touch the part of strategy that is closest aligned to the vision/vission...

Maybe after 40 years, the concept of emergent strategy is starting to emerge..... :-)

Good post and follow up points by Lynda and Thilo

These are very incisive posts. let me suggest that, consistent with your approach, a PM has to consider how to balance flexibility and rigor in their approach. By that I mean you have to be willing to adjust to needed change, while, at the same time, have a framework, a fabric on which you have built your project plan.

I have said elsewhere, in the discussion section, that there will be projects where the customer, the sponsor, and the team want to be in constant flux. They hear and see new things, and want to rush to include them. In some instances you have an impressionable program manager acting as the sponsor, who feels similar pressure from his seniors and peers to be constantly change the scope of the project--in small ways--but having a greater overall effect of success.

A project cannot be an exercise in pushing toward the edge of chaos. It has to have a well-defined scope, and an environment in which efforts move toward an accepted goal, so intermittent change needs to be carefully analyzed before rushing toward that change, only to find it is not what it seems.

Great article.

Good point - governance and to a lesser extent management involves living with paradox and striking the best balance in the circumstances.

Thanks Lynda. David Hillson recently wrote about VUCA applied to risk management:

Yes - David's insightful 'Risk doctor' briefing was one of the triggers that sent me back into our archives to look at VUCA from a governance perspective. VUCA was 'big' in the 1990s but seems to have faded from our thinking but static management and governance systems cannot deal with VUCA and agility.

Agreed, Lynda. I remember the onset of VUCU, but still prefer to consider how to heal properly with governance from a perspective of practical, logical decision-making.

I'm working on some ideas around this for my post next month........ :-)

We have to be predictive and adaptive in our strategy management.

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