What does it mean to be prepared for the VUCA era? #232

■ What is VUCA? A world where unpredictability is the premise

The modern era is often called the VUCA era, where the future is opaque and difficult to predict.
VUCA is an acronym for Volatility, Uncertainty, Complexity, and Ambiguity.

In other words, it is an era based on the premise that you cannot read the future as a simple extension of the past.
It is not uncommon for the rules of thumb and successful experiences that were effective in the past to no longer apply.
However, management cannot simply end there.
This contradiction is the essence of VUCA.

■ What is needed is uncompromising information organization

That said, you cannot just give up and say, "I don't know anyway."

Traditionally, management resources were referred to as "people, goods, and money."
However, in the modern era, "knowledge" and "information" have been added to that list.

Precisely because we are in the VUCA era, it is important to continue gathering and analyzing information without compromise.
Even when there is no perfect answer, you must accumulate decision-making materials with the highest possible degree of accuracy.

And what is needed on top of that is knowledge that allows you to think in terms of structure.

■ The idea of thinking in multiple scenarios

This brings to mind the proverb,"When the wind blows, the bucket maker prospers."It is a story about how seemingly unrelated events can lead to unexpected results through a complex chain of events.

The essence of this story is that "cause and effect are not a straight line."

The modern business environment is the same.

Results are produced through complex interweaving, not just a simple A→B, but A→B→C→D...
You never know which knowledge or information will connect where and how.
That is why you need "hypotheses as a structure" rather than one-off predictions.
The important thing is not to "guess one future."

Rather, it is to hold multiple scenarios simultaneously, such as:

・If this happens
・If this does not happen
・If it falls somewhere in between
Designing how to act for each of these scenarios in advance is what constitutes management strategy in the VUCA era.

This is not prediction, but structural preparation.

■ You never know where or how preparation will connect

In 2020, before the COVID-19 pandemic.
At the center of management was a clear policy of "improving profitability through productivity enhancement."

Just as we were making preparations to execute a three-year plan, the COVID-19 pandemic occurred.

Demand plummeted, and the business fell into the red.

Normally, this is a situation that would require a long time to recover from.

However, the productivity improvement initiatives that were already underway at that time ended up having great significance.
Accepting that the premise had collapsed, we reorganized our priorities and accelerated the execution process all at once.

As a result, we were able to execute improvements that were originally expected to take three years in a short period, and we were able to return to profitability even while sales were dropping significantly.

This experience strongly demonstrated that it is not the "accuracy of the plan" but the "speed of adaptation to change" that determines the outcome.

■ What management needs is the power to prepare

When I overlay this experience with the structure of VUCA, I arrive at one conclusion.

What management needs is not the ability to predict the future.

What is needed is the power to gather information, understand structures, build multiple scenarios, and prepare for all of them so that you can respond no matter what the environment becomes.

And it is to quickly switch to the most rational route the moment a change occurs.

You cannot choose the environment.
However, you can choose how you face the environment.

To keep thinking even while operating on the premise that things are unpredictable.
I feel that this is the minimum requirement for surviving the VUCA era.