As shown in the Figure 3 (developed by our teamat the University of Seville), we can see that there is a high correlation. As you can see in the Figure, in every organization we can find 4 levels of complexity, from simple to chaotic. And the Volatility, i.e. the rate of change, affects making the problem worst when the speed of change is fast.
There is an important frontier between complicated and complex, the frontier that separates the ordered world from the disordered one, the frontier between the old management and the new:
Old Management: In this space, the past can be analyzed;the future is more or less known (Ambiguous scenarios with low or moderate Volatility). In this arena, we can keep using the yesterday management techniques.
New Management: In the space of complex and chaotic situations, even with low volatility, the future cannot be predicted clearly. Even the past can be unclear. In those situations, the standard management techniques do not work (e.g. BPM).
The challenge that most organizations have to tackle is determining which parts of their business and organization are just simple/complicated, and which parts havealready entered the complex or chaotic domains, which parts are Complex and Uncertain. Managing in each arena is completely different.
Good measures could be the capability of the organization to know the past and predict the future, and the rate of communications (ei. Emails, interruptions, meetings, etc.):
If you have not clear information about the past and you cannot estimate the future with enough accuracy, and individuals in your company communicate at a high speed, you have to apply the new management tools.
Manage the VUCA world
Managing in the more difficult part of the spectrum requires the application of four principles:
Be Focused
Tesla Motorsfocuses is changing the way the world uses energy. This is inspiring; this makes every employee passionate about his or her work on defining the future.
This principle consists on analyzing the options but without planning in the long term, just having an inspiring vision of the future. In an environment that cannot be predicted it is key tohave a clear purpose that help us to see if we are on track. Today nothing is done in isolation. In an uncertain environment, passion and inspiration is the key ingredient that makes people to work together for conquering a better future.
Analyze the options and define an inspiring vision of the future in stead of planning.