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It was back in 1992 when Herbert F. Barber came up with the term VUCA – Volatility, Uncertainty, Complexity and Ambiguity – but it also happens to be a near-perfect description of how things are right now. Although initially introduced by Barber as a concept for strategic company management, VUCA also reflects the problems currently facing managers – including outside of their respective organisations. Today, it describes the influences that global dependencies, political controversies, technologisation and changing consumer behaviour are having on companies and entire sections of society – and therefore keeping 21st-century managers on their toes.
However, hardly any of these influences has brought about such far-reaching changes as the COVID-19 pandemic, which has been hanging over us since March 2020. It has led to events that many people had previously thought impossible: e-commerce penetration in the US grew from 16% to approximately 34% within the space of three months (by way of comparison, it took about ten years to increase from 5% to 16%); internal projects for which a timescale of around three years had initially been planned were launched over a single weekend; and entire industries were turned on their heads – restaurants, healthcare and traditional retail being cases in point. The coronavirus has led to longstanding certainties losing their currency and being replaced by a new normality – meaning that VUCA has taken on a whole new importance.

Digitalisation: the constant factor in the new normal

In the ensuing uncertainty, digitalisation is now a central instrument on the agenda of all company bosses as it allows them to respond more flexibly to these volatile influences and to introduce countermeasures. Although it had already been quite a challenge for many companies to take their company processes to the next (digital) level, the advent of the coronavirus now means that this has become a survival factor that will determine each company’s future. Whether it’s a question of expanding the online area to include offline sales, implementing projects entirely by digital means or managing teams via digital channels – digital services and platforms facilitate these initiatives in only a fraction of the originally intended time and are therefore a central component of company management. And one that is here to stay.

The challenges for managers involve overcoming the physical distance to individual colleagues brought about by the need to work from home and, in spite of largely decentralised teams, to create digital interactions with a view to implementing project processes and encouraging team spirit. As a result, the pandemic has increased the urgency of implementing digital solutions as this is the only way to counter the crisis adequately and to respond more swiftly to the impact that it is having. So it’s no wonder, then, that – according to a DMEXCO trend study – approximately 70% of managers based in the DACH region indicated that the pandemic will speed up their planned digital transformation projects to enable them to meet the new requirements.

Adaptability will determine future company success

Managers are currently being given a crash course not only in digitalisation, but also in change management and New Work. Here, one of the main critical success factors will be how individual managers practise ‘remote leadership’ in companies – this is because the agility and flexibility of the predominantly cross-functional and decentralised team members must be ensured continually. One fundamental aspect for companies is therefore how skilfully and quickly they can respond to crises and changes in their organisational environment and adapt their organisation accordingly.

VUCA 2.0 – an antidote for the current state of uncertainty

Driven by external influences, managers feel forced to explore new avenues and acquire new skills so they are in a position to face up to increasingly pressing questions. This is why it is necessary to have a clear understanding of the organisation’s common orientation and to be able to convey this successfully within the company and tackle the challenge together.

This is done by communicating a Vision, by Understanding the context, by presenting these with Clarity and implementing them with the necessary Agility – or, in short, with VUCA 2.0. This can be seen as the antidote to the VUCA term introduced by Herbert F. Barber. VUCA 2.0 gives managers guidelines that they need to apply in their operational management functions in order to keep on top of current and future challenges:

V ision:

More than ever before, managers need to be able to provide continual orientation in the context of changes and to put forward a vision that the organisation can gear itself towards. This not only requires the definition of a ‘guiding star’ but also the necessary degree of transparency that will allow each and every employee to devote themselves to the mission at hand. At the same time, it is important to create a common understanding of values and the organisation’s strategy so that managers are in a position to make relevant company decisions, thereby enabling their teams to take the same route.

U nderstanding:

As well as defining a common vision, a far-reaching understanding of structures and processes is important in order to be able to apply skills that exist within the company quickly and effectively. At the same time, an in-depth understanding of the company context must exist – this is necessary for adapting flexibly to dynamic requirements from customers, competitors and changes in the political climate. To this end, transparent communication and networking need to be established throughout the company so that any volatile influences can be nipped in the bud. Only in this way is it possible to respond flexibly to external changes, to minimise risks and encourage resilience.

C larity:

One way to deal with the complex internal and external organisational environment is with focused and clearly formulated company management. This will bring clarity to the existing fog of chaos, enabling effective countermeasures to be defined and implemented. As a result, processes can be structured more clearly, communication channels used more efficiently and company decisions conveyed quickly and resolutely so that, in spite of the existing complexity, they can be communicated transparently to employees and continually made visible.

A gility:

In order to remain viable for the future, companies need to be agile enough to adapt to external requirements and flexible enough to respond to a changing environment. This means that agility not only needs to be reflected in the company structures and processes – at the same time, it constitutes a leadership quality that is evident when managers demonstrate an agile mindset. This is why initiating a cultural shift and establishing flexible processes and cross-functional cooperation models is a central function for managers today. To do so, they must be able to communicate openly within the organisation and find suitable solutions for external changes quickly – without losing sight of the aforementioned ‘guiding star’.

Digitalisation is central to the success of VUCA 2.0

VUCA 2.0 offers managers an approach that can guide them in times of mounting uncertainty. However, this also means that suitable technologies need to be used, digital platforms set up and internal knowledge transfer geared in such a way that relevant information, data and transparency can be exchanged quickly and flexibly with regard to the changing situations. To this end, organisations should do away with siloed thinking, encourage integration and collaboration between different areas and establish mechanisms that motivate self-reflection. In addition, companies have to create an environment for ongoing learning and a values-based culture in order to provide employees with the tools they will need to deal with sudden, unforeseen events. This empowers individual teams and employees – through personal responsibility and reflection – to counter the combination of volatility, uncertainty, complexity and ambiguity that is set to be the norm for the foreseeable future. Such an approach ultimately enables employees and managers alike to make use of the necessary information strategically and in the interests of the company – all with a view to optimising resource distribution and avoiding inefficiency.

VUCA 2.0 as a core skill of today’s organisations

Implementing the guidelines of VUCA 2.0 is ultimately a critical factor for managers when it comes to withstanding the challenges posed by the VUCA influences today and in the future – and emerging stronger than ever. By defining a vision, understanding their own organisation and ensuring clarity in their communication and agility in their actions, it is possible to take the edge off uncertainty and, in turn, to follow a common vision together. Changing management and employee conduct in line with VUCA 2.0 will well and truly bear fruit once it has been aligned with the right tools, platforms and technologies. However, intended change only occurs when its wheels are set in motion – and what better time for change than right now?

This article first appeared in TWELVE, the Serviceplan Group’s magazine for brands, media and communication. In the seventh issue, you will find further inspiring articles, essays and interviews by and with prominent guest authors and renowned experts centred around the magazine’s theme “Rethink!”. The e-paper is available here.

I'm sorry Dave...

In 2001: A Space Odyssey, Arthur C. Clarke came very close to predicting the future in one of his laws. He wrote that “Any sufficiently advanced technology is indistinguishable from magic.

In today’s world, in which technological innovation seems to be moving forward at warp speed, the revered science fiction writer seems to be closer to the truth than we might think…

Technology is in the air

In just ten or so short years, technology has gradually become invisible. The cumbersome computers that once took up space on our desks have morphed into tablets and smartphones. Bulky cathode-ray tubes have yielded floor space to flat-screen TVs, that some people even use as works of art. The wires that once connected telephones to the network have disappeared, leaving behind WiFi waves and 4G. Technology is now omnipresent in our daily lives. But it has moved out of sight.

Screens themselves also seem to be disappearing, giving way to connected speakers and voice command technology. We are more surrounded by technology than ever, but let’s face it… we can no longer see it. The ultimate expression of this disappearance is Amazon Go. In reality, there is nothing technological about the customer experience at Amazon’s checkout-free supermarket. You go in, take what you need from the shelves, fill your basket and leave. All the shop’s electronic equipment – sensors, cameras, and of course computers – is hidden behind the scenes, out of customers’ view.

From their perspective the shopping experience is no more “digital” than buying a lemon on a Friday evening from your local grocer’s. All the technology that Amazon uses has actually become completely transparent.

But there is still a magical element about this shop, in which there are no human interactions at all. Helping yourself, leaving the shop, and seeing your bank account automatically debited with the correct amount is the most positive brand of magic that modern technology can offer!

Power and Data

The magical Amazon Go experience owes its appeal to a whole host of technological innovations that we now place under the umbrella of “Artificial Intelligence”. Amazon Go uses weight sensors that detect when a product leaves a shelf. Cameras follow buyers and identify their movements. And there are computers that can link up these sources of information and determine who has purchased what.

In a nutshell, the boom in information transfer and processing capabilities is what has made Amazon Go possible. While just a few years ago, we were still strugging to analyse complex statistics, the increase in computers’ processing abilities and the deployment of high-speed networks (fibre and soon 5G) mean that we can now process images or videos in real time. Computers have learnt how to handle eminently complex data on our behalf.
Image interpretation is commonplace, and opens up a plethora of new possiblities. If only to mention some of the most striking: the facial recognition experiments that were carried out in Shenzen, China: detection of cheating during exams, identification of a criminal inside a crowded stadium, etc. not to mention the attribution of a “social” score to inhabitants, depending on their behaviour.

Here again, we are talking about transparent technology that has a very real impact on people’s lives.

The end of empathy

In fact we are seeing the impact of accelerating technology in our everyday experiences already. What criteria can be used to deny a Chinese citizen access to an international flight? And most of all, what can the citizen do to argue against these criteria?

Doesn’t basing administrative decisions on thousands of statistics mean casting shadows on real life?
In the United States, local authorities are using AI to decide how social benefits should be attributed. An increasing number of cases are being processed “digitally”, based on solely objective criteria. By developing fully automatic, and therefore “objective” systems, the authorities are actually creating discord.

Most federal employees using these systems have found them to be a way of relinquishing the burden of responsibility: “Our system has denied you access to this loan”. For beneficiaries, the programmes are seen as the end of empathy and human understanding. A refusal that is backed up with the humanity and compassion of a real-life personal explanation is easier to accept than when the decision is generated by a heartless source of artificial intelligence, which allows no response or opposition to its arguments.

Lost in digitalisation

In addition to Arthur C. Clarke’s “magic”, there is a fear of a certain modern illiteracy, the human mind becoming unable to understand the ins and outs of a decision. Because obviously, the ability of computers to store and process information bears no relation to human intelligence.

When faced with a decision involving an algorithm that impacts our daily lives, we don’t know how to react. Simply because we can’t understand and discuss the various factors involved in the decision. A counsellor can present arguments, even though they may be clumsy, whereas AI remains cold and explains nothing.

In fact, that’s the problem. The very criteria that make AI such an efficient mediator are – by definition – too complex to be understood by the people who are affected by them. How can the Shenzhen resident who is refused access to an international flight understand the reasons for this refusal? And above all, is the person given the opportunity to know how their actions may impact their visa request before it all begins?

And that’s what digital illiteracy is: not understanding the impact that technology has on our daily lives, and feeling that we are losing all control. It’s a type of curse.

While progress in artificial intelligence has aroused fear about the destruction of humanity – known as the Skynet syndrome – we worry somewhat less about the stranglehold that algorythms have on our daily lives. No longer understanding the world around us, how we interact and make decisions, and above all what impact our actions may have, are increasing dangers for our society.

While Arthur C. Clarke did predict the rise of magic, he couldn’t have known that it could be of the black variety.

Translated into English by Ruth Simpson

This article is part of Serviceplan’s Twelve #5 issue.

Would you like to speed up the transformation process in your company by fast-forwarding the change using disruption and out-of-the-box thinking as the ultimate goal for 2017? Or perhaps pursue the end-to-end process, through programmatic advertising, with first, second and third party data, with marketing automation and immersive marketing, to achieve customer centricity? And are you also convinced that virtual reality and live content are the next big things?

Yes, I‘m exaggerating, of course. It isn’t that bad, fortunately. But anyone who has to deal with digital topics knows that they abound with specialist jargon. And that is not at all bad. We only have a problem if we can’t guarantee a common understanding of these terms – if everyone understands something, but not necessarily the same thing. And from time to time you can’t help feeling that some people also like to hide behind technology, abbreviations and abstract technical terms, in order to hide their own ignorance of the details.

Take a term like ‘digital transformation’. Do you as a businessperson think that digital transformation is important? Of course it is. And now ask your employees and colleagues what they mean by this term: The answers will surprise you. From an app for the canteen plan to crowd-based product development, they could cover just about anything. If there is no common understanding here it will be difficult or impossible for everyone to be on the same page. But how can they be, if no-one knows what is to be changed by this digital transformation? On top of that, a recent study has found that just a third of German companies feel well prepared or very well prepared for the digital revolution. Those who play Buzzword Bingo at this stage risk having this process fail for their company. Not because employees and service providers are fundamentally reluctant, but because announcing changes generates feelings of uncertainty, fear and the feeling of a lack of competency in established company structures. Abstract, difficult to understand language, suggesting great complexity, can cause additional resistance among the employees. But these are the most important supporters – or to put it in buzzword-speak, the ‘enablers’. So the ultimate maxim for decision-makers must be: Make things understandable and create a common understanding of what you mean by certain terms.

Another example? You make the fundamental decision for your company that ‘customer centricity’ will be part of your future strategy. So you want to ‘focus on the customer’ in future. This may be particularly important because your company has collected a large amount of customer data at the different contact points where customers engage with the company and its products (‘touch points’). You already have various databases, where customer information has gathered over time, but they are rarely compatible and cannot be ‘matched up’ with each other easily. If all the departments involved, such as the IT, marketing and sales departments, define customer centricity separately, they will all suggest quite different approaches with very disparate requirements. You could, of course, buy a software solution as an all-in-one solution because a strategy consultant has promised you double-digit savings. It would be more sensible, however, to allow all departments involved to exchange ideas – perhaps even moderated by an external, software-independent consultant – on how the goal of absolute customer orientation should be achieved in individual steps: what content, at which points of contact, how often, etc. And only then should they make subsequent decisions on structures, responsibilities, budgets, and maybe software as well.

In our experience, common understanding is achieved best when things become tangible for all concerned – and ‘tangible’ is also to be understood in the literal sense. Take for example a workshop where you can test new technologies and try them out yourself. Or you can talk to start-ups in your own industry, getting to know them from the inside, or ask experts from other sectors who have mastered certain aspects of the digital transformation in their company. And don‘t worry, you won’t have to book a trip to Silicon Valley! You can also gather such insights in a metropolis of your choice. You probably won’t draw up a total transformation strategy for your company after one such workshop. But in the best-case scenario, you will have jointly identified the most important fields of action for such a strategy, and established a common vocabulary.

It is just as important to find a common basis of understanding with your service providers. Don’t hesitate to ask what is meant by a certain term and what is behind it, along the lines of: “There is no such thing as a stupid question.” If you also encourage your service providers to do the same, you can greatly simplify and speed up the exchange of knowledge, allowing yourself and your counterparts an optimal learning curve and thus creating a good basis for efficient communication and co-operation.

Once you have achieved this, the practical implementation in your company will be many times faster. And then even buzzwords are no longer a problem. After all, everyone will then be reading from the same page.

Life is full of choices. Where should I live? Should I get married? Which campaign do I choose for the client pitch? How many people should I hire or fire? Behavioural scientists discovered that everybody more or less makes 20,000 decisions every day. It reflects who we are, what we believe and how we behave.

But imagine if machines took all of this away? We will no doubt lose our identity. Now, we’re not saying that all decisions in the future could and should be made by machines! Artificial Intelligence already solves lots of problems and challenges now, and will probably solve even more in the future. And that’s brilliant, and is going to lead us to a whole new era. Every organisation must invest in future knowledge and new ways of working.

But in the long run it only pays off if, at the same time, they don’t stop developing the people that have to implement these new technologies. As our colleague Alexander Turtschan, Head of Media Insights & Innovation at Plan.Net outlines it so precisely: “My key takeaway from this year’s SXSW is that we now have fully entered the post-platform era of digitisation. AI, robotics and machine learning will transform every aspect of our lives, from the workplace to the home. While the technological side is moving rapidly, we are lagging far behind on the social aspects of this revolution, from legal frameworks to moral implications.“

SXSW in other words is sharing, exploring and inspiring every human centred aspect. There’s been a lot of press and interviews on the outcome of SXSW 2017, as well as a lot of sentiment over whether it is a good or bad event to attend.

From our experience this is not a black or white event. SXSW is what you make of it – hence everyone has a different SXSW experience. It’s such a large event, that covers a multitude of different topics. Within the official SXSW program and all around Austin at other branded open sessions, RSVP sessions and even hidden events – everyone rides the SXSW-wave.

For Nicolas Roemer, Head of Business Development International at Serviceplan, it is the strongest digital event in the US; in regards to mixing technology with socio-political and cultural ideological topics, probably the strongest event in the world. “As Virginia Rometty (President & CEO, IBM) put it, one doesn’t have one mentor, one learns and grows from everyone that inspires you. This can be across all kinds of areas. The people I meet at SXSW excite me and help develop and structure my approach every time I attend SXSW.”

He continues: “As I am heavily involved in building out Serviceplan North America’s presence this year, SXSW has been vital to see how other US agencies and brands sell themselves successfully at such events. Agencies and brands definitely promote themselves differently in the US. One can also tell that the high-risk tolerance level of brands for new technology has significantly grown. Brands are employing and enabling work forces e.g. Innovation Disruptors at HP to experiment with new technologies: Be it blockchain, experimenting with the different AI API’s, VR/AR etc. Especially in the AI field we will see a lot of change, even for the advertising industry with IBM Watson banner solutions, for example.”

So most people that attend SXSW Interactive already have a very strong background in digital, UX, technology, out-of-the-box-thinking…you name it. They have all heard of Watson, Nio and Drones before. Besides networking and experiencing the newest trends, what makes the SXSW experience so valuable? One of my observations this year was that many organisations are focusing on the workplace environment. For example, Fjord’s 2017 Trends report examines not only trends that will impact consumers, but also those set to impact design, business, organisation, culture and society in the next 12-18 months. IDEO spoke about innovation talents and how to keep innovators feeling creative, fulfilled, and committed as they grow in their careers. And Piera Gelardi, Founder of Refinery29, passionately spoke about ‘Courageous Creativity’ and how you sustain a childlike wonder and exuberant creativity as you grow a multi-million dollar, global business.

Moreover Meredith Haberfeld expressed her thoughts on employee engagement in relation to the economic advantage of a company: “From startups to mega-corporations, companies are wasting billions of dollars in the quest for employee engagement. But the only starting point for a fulfilled, optimally productive workplace is getting real about your CEO’s human intelligence. Leaders need basic human skills that aren’t taught in business school. Without them, engagement efforts are an embarrassingly shiny façade failing to mask underlying issues.”

Technology, work environment, tools and culture will massively shape the future of work experience and company success. These conditions will impact how adaptable organisations will be to change and upcoming trends. The human experience cannot be taken away by technology. Certainly people also have to adapt to the speed of technology. Learn how to fail and push creativity and innovation to the limit. Because, as Simon Steiner, Senior Consultant & Planner at Mediaplus described it, “In the digital age speed trumps perfection.”

This is the reason Serviceplan sent experts from the media, digital research, cultural strategy, and business development teams to distribute this knowledge across the group and into our 25 offices worldwide. Following on from the amazing networking opportunities from SXSW – as we did in 2016 with our educational VR-sessions – we will be hosting educational sessions for our clients and colleagues, on trends and topics we were able to take home from Austin.

While talking to IBM Watson in Austin I found out on ibmpersonalitee.com that with my skillset I should be a Mentor. The Mentor is an “old soul”, relying on their past experiences to provide insight on what is coming next. They can answer all sorts of different questions with surprising accuracy, and have a healthy attitude about life. “Well, Watson – I don’t know about this! But thanks for the compliment anyway. ;-)” Lucky me that in the end I can decide weather I will make the Watson artificial intelligence my reality or not.

Howdy and see you next year in Austin!

 

This article was published on lbbonline.com.