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The New Reality calls for a VUCA-Proof Strategy

The New Reality calls for a VUCA-Proof Strategy

by: Earl Anthony T. Pagatpat

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The current state of the world mirrors that of a Volatile, Uncertain, Complex, and Ambiguous (VUCA) world, a term drawn from leadership theories of Warren Bennis and Burt Nanus (1985)1, and the business landscape is no exception. This is evident in the change in business engagement dynamics and how the COVID-19 pandemic has stress-tested the supply chain, IT systems, and digital capabilities of organizations. With the New Reality, the business strategy, leadership, and business management of companies need to transform and adapt to survive. According to Max McKeown, adaptability is about the powerful difference between adapting to cope and adapting to win. 

the new reality calls for a vuca proof strategy

To create a VUCA-proof strategy, leaders need to let go of the conventional approach to strategic planning and consider two types of lenses - the forward-looking lens and the internal-looking lens. The former considers and reacts to trends or shifts that leaders deem fit for their organization while the latter looks into aligning the capabilities and resources of an organization with its strategic goals.

No single strategy can work across different companies. However, in a VUCA business landscape, strong strategy foundations such as Vision, Understanding, Connectivity, and Adaptability are a standard.

Volatility. With the pandemic, there is a need for technology diffusion to keep up with the New Reality. Having a clear Vision will help organizations steer through these challenging times and thrive in the everchanging business landscape. One example is envisioning to digitally transform a company by integrating technologies such as Enterprise Resource Planning (ERP), Blockchain, Robotics Process Automation (RPA), and digital transformation toolsets to change how they operate and deliver value to customers amidst the volatility.

Uncertainty. As no one is certain of the future, the challenge is knowing which steps to take to ensure business survival. To combat uncertainty, an adequate level of Understanding of the external challenges and the company’s strengths, weaknesses, and potential blind spots are crucial. With the pandemic proving how increasingly interconnected our society has become, the need for Data Analytics, Agile Transformation and Digital transformation assessments has become more apparent.

Complexity. In the complex COVID-19 world, organizations are challenged to simplify the issues brought upon by the pandemic and make these easier to process. To do this, an essential foundation is Connectivity. Silo-buster activities, such as the development of an Enterprise Architecture, will help to ensure a seamless and responsive system resulting in a robust supply chain, an aligned and empowered workforce, and an integrated and digitally-enabled technology architecture.

Ambiguity. The pandemic has shocked many organizations, and some corporate leaders were caught off-guard when measures such as the Enhanced Community Quarantine and Bayanihan to Heal as One Act were implemented. Organizations had to be flexible enough to swiftly transform and adjust without affecting their overarching vision. Adaptability is a key foundation in combatting ambiguity. This calls for a Technology Business Management (TBM) check, proper training of DevOps, and Agile Transformation.

As organizations transition to the New Reality in this VUCA world, both leaders and employees must adopt a growth mindset. We at KPMG use design thinking in our Digital Transformation processes to ensure relevance during the pandemic and beyond. By seeing problems as opportunities, we are able to put the customer first and focus on value generation. Through this, we can recommend the best steps to take in an organization’s digital journey, from recalibrating strategies to driving change and staying relevant.

Earl Anthony Pagatpat is a Senior Manager from the IT Advisory Group of KPMG R.G. Manabat & Co. (KPMG RGM&Co.), the Philippine member firm of KPMG International.

This article is for general information purposes only and should not be considered as professional advice to a specific issue or entity.

The views and opinions expressed herein are those of the author and do not necessarily represent the views and opinions of KPMG International or KPMG RGM&Co. For comments or inquiries, please email ph-inquiry@kpmg.com

© 2020 R.G. Manabat & Co., a Philippine partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity.  Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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