Market musings

What Is VUCA And How Can a Small Business Survive It?

by Sasha Viasasha
August 25, 2017

It’s hard out here for an SMB. Changing conditions, unexpected events, uncertainty and confusion are a matter of course in an economy that, despite lackluster growth, manages to be full of surprises. In other words, VUCA.

What is VUCA? Volatility, uncertainty, complexity and ambiguity. Coined by military operators facing the Afghanistan terrain that has buried so many empires over the centuries, VUCA can make or break you.

The struggle is real

Cisco’s John Chambers, speaking at the IMF last fall, speculated that up to 40% of businesses won’t survive into the next decade. This major extinction event is already well underway, and yet small businesses are overwhelmingly the engine of growth and innovation. What sets the winners apart? Understanding and mastering VUCA is key to surviving and even prospering in the new reality of a decentralized yet globalized economy.  

At first glance, it might seem that the elements of VUCA are all the same, but they are distinct conditions, each deserving special consideration and thought.

Volatility—rapid and unpredictable events, from political moments to environmental crises, can quickly impact any one of those many parts and systems. A response to volatility is necessarily reactive, even instinctive.

Uncertainty—the unknown and unknowable hovers over every business decision. Bad data, a lack of data, and volatility create uncertainty. Ambiguity also plays a huge role, especially when decisive leadership is lacking.

Complexity—the economy, from supply chains to segmented audience bases, is a complex machine of moving parts and interdependent systems. Much like the products of industrial manufacturing, these parts are often designed and produced in different places, and may not quite fit nicely together.

Ambiguity—even more insidious than uncertainty, ambiguity is any event or idea that is undefined, and to a certain extent undefinable. Ambiguity may lend itself to several interpretations, or many, many interpretations. Unlike uncertainty, where the facts are missing, ambiguity is even harder to pin down and requires clear, confident leadership and purpose.


A rabbit or a slightly deranged bird? You decide! 

How can a small business not just survive, but thrive in a VUCA world?

There are no easy answers, but here are eight steps you can take to VUCA-proof your business and build more resilience into your business model.

1. Digitize now  

Digital tools increase productivity, lower costs and allow you to access new markets and opportunities. Shedding legacy systems and old world office equipment not only can save you money, but will increase your efficiency, accuracy and information intelligence. Moving to the cloud improves security and gives you more control and better access to your data. BYOD platforms allow you to grow your business from wherever you are, and to move quickly to capitalize on new opportunities.

2. Become a thought leader

If you own a small business, you’re an expert on something. What is it? Don’t let your knowledge and first-hand experience go to waste. Cultivate it to become an authority in your sphere and establish credibility. Become a trusted voice, and you can help banish ambiguity and uncertainty, and establish your brand as an authority.

3. Become a community leader

In the past, people looked to traditional authority for answers, but this kind of authority has crumbled with the rise of local and collective power. People look for answers closer to home, and for strong leaders in the businesses they work for and engage with. Mentorship and leadership builds strong communities and businesses.

4. Eliminate unnecessary processes

Uncertainty can be paralyzing, and inaction has a cost. Grasp opportunities quickly, cut your losses and move on. Making decisions on the go requires agile, horizontally structured command chains that concentrate decision making power in the front lines. Remove unnecessary administrative processes that hamper decision-making and mentor your employees to act on their own authority. A strong company culture can inform decision making, allowing your employees the freedom to act quickly.

5. Create flexible work conditions

Flexible work conditions can help reduce stress for everyone, and empower employees to create their own ideal working conditions. Flexible work benefits like BYOD, working from home or using coworking spaces have been shown to increase productivity and business outcomes. Empowered workers work harder and smarter, and are more loyal.

6. Strive for scalability

Create business structures that are easy to scale up or scale down. A flexible business can act on new opportunities, or cut losses when necessary. Coworking spaces, remote teams and open talent markets can help you build a resilient business while saving money.   

7. Focus on the customer

Staying close to your customer and engaging with them can help you keep an ear to the ground and anticipate shifts even before the markets do. Everyone is trying to analyze, understand and respond to the consumer, but as a small business you can use your up close and personal advantage to stay ahead of the curve.

8. Get Zen

How do you stay calm when everything is on the line? Make sure to unplug and relax, and learn to embrace uncertainty. Define your purpose, and let that steer you rather than the sudden upheavals of a changeable world.  

Analyze your moves, but don’t get caught up in looking back. Ultimately the ability to make a decision and see it through, correcting course as needed, may be more valuable then obsessing about making the perfect decision.

You may never make the perfect decision, but leaders make imperfect decisions  and then make them work.

Plan, but be willing to dump your plans when reality strikes.

Just as the future of work is annihilating a single skill set, the new economy is making dependence on a single product or idea perilous. Create a strong company that can shift when it makes sense, and be ready to reinvent yourself when it's time.

A phone system designed for a vuca world?

When you're ready to scale, can your business phone system scale with you? VoIP phone service has gone mobile and doesn't have to tie you to an expensive setup. An office lease and office phone system used to be a baseline of business operation, but business applications like Spoke can turn your mobile phone infrastructure into a full-featured business class phone system with call routing, auto attendent, extension dialing and easy call transfer. 

To learn more about Spoke, including how our AI is powering the next generation voice UX, sign up for an interactive demo and learn how to transform your mobile phone or business phone line into a smart office phone system. 

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