What is VUCA?

Feb 27, 2023

The term VUCA stands for Volatility, Uncertainty, Complexity and Ambiguity and was first coined in the early 1990s. It was initially introduced by Herbert F. Barber as a concept for strategic business management, but it also reflects the problems currently facing managers across the world.

Businesses are operating in extremely uncertain times. Business leaders are now dealing with complex issues including cyber security, sanctions due to international conflicts, rapid changes to health policies (particularly after the Covid-19 pandemic) and disruption to global trade. VUCA 2.0 has been designed as a framework for leaders in today’s uncertain environment.



Today’s managers and business leaders need the ability to set a clear vision for their firms. As part of the vision for the business, they must provide clarity around the firm’s mission, values and strategy so that everyone is pushing in the same direction, despite the chaos that may be unfolding in the world around them.



The leaders of the firm need an in-depth understanding of the firm’s capabilities in order to determine an effective strategy which takes advantage of rapidly changing circumstances. The leadership team needs to continuously engage with customers, employees and market participants in order to fully understand the changes that may be unfolding in the market.



In uncertain times, managers need the courage to step up, face new challenges and make decisions using the best data available (which may well be incomplete data). There is more risk in doing nothing and relying on “doing what we have always done in the past”. The most successful firms will be the ones who embrace courageous leaders who are bold enough to drive the business forward through tough times.



We have all learned to be more adaptable due to the Covid-19 pandemic. Strategic planning is all well and good, but those plans need to be flexible in order to adapt to changing external forces. Contingency plans need to be in place for when things change, and in the current environment, things can change fast.


The current volatility looks set to continue for some time. As such, business leaders who stay focused on their vision and overall objectives, while being flexible enough to adapt as things change, will be the ones who set their firms up for success.

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