In Chapter 4, the authors further explore the theoretical underpinnings of the process steps set out in Chapter 3 and describe five other models for making decisions under VUCA that were not discussed in Chapter 3. These models are the Cynefin framework, make-and-sell, sense-and-respond, anticipate-and-lead, and taking a stakeholder (enterprise) view of the organization.
TopThe Past Is No Longer The Prologue
Professor Klaus Schwab (2016) Founder and Executive Chairman of the World Economic Forum has published a book entitled “The Fourth Industrial Revolution” in which he describes how this fourth revolution is fundamentally different from the previous three, which were characterized mainly by advances in technology. He posits that, “We stand on the brink of a technological revolution that will fundamentally alter the way we live, work, and relate to one another.” Consequently, we will be less able to forecast and we will have less time to respond. David Snowden (2012) concurs, writing that “You can’t predict the future, but you can increase resilience in business, here and now, which will allow you to manage that uncertainty”:
Schwab (2016) continues:
In its scale, scope, and complexity, the transformation will be unlike anything humankind has experienced before. For example, Our ability to find, much less talk to, mass markets through a single communication medium where we control the message content will have decreased. We do not yet know just how it will unfold, but one thing is clear: the response to it must be integrated and comprehensive, involving all stakeholders of the global polity, from the public and private sectors to academia and civil society.
Schwab (2016) further outlines his concerns that “organizations could be unable or unwilling to adapt to these new technologies, and that governments could fail to employ or regulate these technologies properly.” Schwab postulates that “shifting power will create important new security concerns, and inequalities could grow rather than shrink if things are not managed properly.” All of these concerns indicate stress and uneasiness will be coproduced by dynamic complexity, and that organizations have to brace themselves for a ‘turbulent ride’ in the future business environment.
Very much like the situation in aviation, organizations of the future should be designed to withstand turbulence, and develop the capacity ‘to prepare for disruptions; to recover from shocks and stresses; and to adapt and grow from a disruptive experience.’
The US Aviation industry, which has an impeccable record of safety, has throughout the years demonstrated the ability for continuously learning and adapting to new challenges. James Wilson (1966) described:
The last major air disaster attributed to turbulence was on March 5, 1966, in Japan, near Mount Fuji, when a BOAC 707 was destroyed, along with all 124 passengers and crew. The FAA says that ‘the aircraft suddenly encountered abnormally severe turbulence . . . which imposed a load considerably in excess of the design limit.
Today's aircraft are designed with a large safety margin; for example, the Boeing 787 is built with wings that are designed to flex - a movement that is designed to dampen motion.
The challenge for organizations in The Fourth Industrial Revolution will be to endow their organizational design with properties that create resiliency, and sustainability, amidst increasing dynamic complexity. Clark (2013) writes:
Disruption seems to be everywhere these days: industries collapsing, storm surges shutting down major urban centers, financial markets imploding, and more. Preventing these calamities would be everyone’s first choice, of course. But in an increasingly complex world, it’s very difficult.
There’s a deepening appreciation that we’re living in a time of increased, intrinsic volatility.
TopBusiness Models For Turbulent Environments
The question to be answered is: which business model is more appropriate for complex situations. Vince Barabba (2011) in the Decision Loom argues that today’s successful business design could fail you tomorrow!