Vanquishing VUCA

Volatile, uncertain, complex, and ambiguous situations call for different responses from academic leaders.
Vanquishing VUCA

TODAY’S BUSINESS SCHOOL deans face a range of daunting challenges—or, on better days, intriguing opportunities. These include mastering disruptive instructional technologies, addressing evolving financial models, competing with alternative providers, dealing with public relations disasters—and leading through unexpected crises such as the coronavirus pandemic. As far back as the 1980s, the U.S. military began using the acronym VUCA as shorthand for any situation that was volatile, uncertain, complex, and ambiguous. That certainly describes the world deans find themselves in today.

VUCA environments often seem overwhelming and unpredictable, but they can be easier to manage when administrators understand which of the four elements is most applicable to a particular crisis. For instance, a volatile situation calls for a different response than an ambiguous one, and a complex situation should be handled differently than an uncertain one. Here, we outline common situations confronting business school administrators today. When academic leaders correctly categorize the challenges they face, they will be able to address them more effectively and efficiently.

UNPREDICTABLE IMPACT

Volatile situations are unstable or unpredictable, marked by change that is so frequent and massive that it resists confident forecasting. Even when leaders have information about the forces that underlie the volatility, they can only speculate about the impact those forces will have.

For business schools in the U.S., one current source of volatility involves international student demand. Even before the advent of COVID-19, the situation was rendered volatile by shifting government policies for student visas and postgraduate work permits. School leaders understand very well what is causing the volatility. However, the factors that will determine the direction and magnitude of change are impossible to predict. These factors include the state of diplomatic relations between China and the West; the actions that will be taken by Canada and Australia, which have benefited from changes in U.S. policy regarding international students; and the outcome of the 2020 presidential elections.

When faced with volatility, a leader’s best strategy is to develop agility, which usually requires creating resource pools that provide slack. For an airline, responding to volatility in fuel prices means stockpiling when the price is attractive. For a business school, responding to volatility in international applications means finding alternate ways to create and satisfy demand.

Some schools have reacted to declining international enrollments by investing more resources in recruiting domestically, particularly by targeting transfer or out-of-state students. This strategy may work particularly well if travel bans prevent international applicants from studying abroad.

WHEN FACED WITH VOLATILITY, A LEADER’S BEST STRATEGY IS TO DEVELOP AGILITY.

The University at Buffalo in New York has embraced the agile approach by simultaneously shoring up international demand and creating new streams of applicants for graduate programs. For instance, to attract more domestic students, the school has launched a slate of multidisciplinary dual-degree programs that pair clinical and business schools. To bring in more international students, the school has developed more STEM programming—which provides these students with legal visa pathways to stay and work in the U.S. The school also is appealing to international students by creating more partnership agreements with global institutions.

UNCLEAR REPERCUSSIONS

In uncertain situations, leaders can’t be sure whether a particular event will have meaningful ramifications, even when they understand the underlying cause-and-effect relationships.

One pressing example is the onset of the “free speech wars” on campus. In these cases, academic leaders don’t know whether and how business students will react to instructional elements formerly considered mundane, such as in-class debates, the presence of less progressive professors, and courses on social responsibility or business ethics. Business school leaders also experience an appreciable amount of uncertainty around instructional technology and the future importance of physical space.

A situation is usually uncertain because leaders lack trusted information. A powerful way to address uncertainty is to invest in methods of collecting, interpreting, and sharing information across the college. Deans should build information networks that include professional colleagues, vendors, and stakeholders.

In addition, they should cultivate the ability to review data differently than they did in simpler times. For instance, when administrators are trying to determine which online courses to keep, they should gather hard data about the relative utility of the courses. They also should try to determine the benefits of or concerns about each course from the perspectives of both students and faculty. Gathering such information can preemptively prevent leaders from making bad decisions.

The Robinson College of Business at Georgia State University in Atlanta faced an uncertain situation not long ago. Between the city’s vibrant entrepreneurial community and the presence of big players such as NCR and Equifax, Atlanta was poised to become a center of fintech innovation—if it could attract the talent it needed to grow.

To understand what the future business landscape might look like in the metro area, leaders from the Robinson College and the University System of Georgia engaged in a series of boundary-spanning conversations. Participants included industry leaders, faculty and administrators from the university system, talent management executives, and learning technologists. Together they assessed how they could develop talent quickly enough so that human capital did not become a constraint on growth. These conversations led to an innovative systemwide solution to prepare and credential individuals for positions in fintech.

INTRICATE CONNECTIONS

A complex situation involves many interconnected parts in an elaborate network of dependencies that impact decision making and operations. Complexity is often in play any time organizations are attempting to drive structural change.

Universities encounter complexity in the increasing number of activities—some compliance-driven, some market-driven—that they are expected to undertake. What U.S. university has not had to create or restructure campus offices to address Section 504 of the Rehabilitation Act, which protects students with disabilities; support compliance with Title IX, which is designed to prevent discrimination on the basis of gender; or mollify parents and students about the return they can expect on their educational investment? What university in a European Union country—or a country that recruits students from the EU—has not had to reevaluate its approach to data privacy with the enactment of the General Data Protection Regulation?

Complexity recently presented itself as a challenge to the leadership at American University in Washington, D.C. Historically, many AU students were hired by a small group of large employers who found it economical to go to a few big campuses to recruit recent graduates. However, as online recruiting tools became more readily available, these employers could hire talent from anywhere, so they didn’t have to spend as much time visiting college campuses. At the same time, many of these firms were hiring fewer graduates altogether. These two trends meant that AU students had fewer opportunities to be hired and faced more competition for jobs.

To present more opportunities to its students, AU worked to attract smaller employers to campus—and this was where the situation became complex. Obviously, it was easier for the school to manage one relationship with one firm offering 15 jobs than it was for the school to manage 15 relationships with 15 firms offering one job each. When the task became too overwhelming for the career services staff, the AU administration handled the complexity by hiring an outside vendor who could manage those relationships.

UNKNOWN UNKNOWNS

Ambiguous situations contain doubt about cause-and-effect relationships. An ambiguous situation often is challenging because it is novel; there is little historical precedent for determining what outcomes a course of action might generate.

For today’s university leaders, ambiguity attends the whole concept of unbundled education. If schools offer stackable degrees, digital badges, and other nontraditional learning options, will the resulting credentials be valued by the market? Are brick-and-mortar universities the best purveyors of such products, or will programs like these become category killers for the physical campus?

Recent headlines about the admissions scandal involving U.S. universities present another salient example of ambiguity. How will expectations of universities change in the wake of media reports about wealthy individuals who essentially pay to have their children admitted to select schools? How will regulatory agencies react? What will alumni, students, and future applicants expect of universities? What actions would effectively address this scandal—and future frauds of a similar nature?

AMBIGUOUS SITUATIONS HAVE NO HISTORICAL PRECEDENT TO FOLLOW.

The responses used to address volatile, uncertain, and complex environments don’t work for ambiguous ones. For instance, stockpiling resources could be a huge waste of time and energy in an ambiguous situation. Gathering information is also unhelpful when a situation is ambiguous, as leaders probably don’t know what information would be most useful to obtain. Similarly, a restructuring could be enormously inefficient if the university doesn’t really understand the ambiguity that a restructure would address.

In ambiguous situations, the key to success is experimentation. For instance, in an attempt to adapt to microcredentialing, many business schools have experimented with certificate programs, online offerings, and new degrees.

At the University of Central Florida in Orlando, the business school recognized that career paths are increasingly unclear and that tomorrow’s high-demand jobs do not exist today—a fact that makes it difficult to articulate the learning objectives of the curriculum. To deal with the ambiguity of this situation, the faculty is experimenting with a new integrated business program that emphasizes general and soft-skill development. The goal is to see if a curriculum that focuses on soft skills can produce graduates who can work in teams and across functions, no matter what the job.

OVERARCHING IMPLICATIONS

Altogether, it’s quite reasonable that the volatile, uncertain, complex, and ambiguous dimensions of the business school context could overwhelm academic leaders; so much chaos would seem almost impossible to manage. But when leaders break down each situation into its VUCA components, they will have a clearer path to strategic planning. The VUCA framework offers deans and their teams a way to find specificity in chaos—and a tool with which they can manage tumultuous times.

Nathan Bennett is a professor at Georgia State University’s Robinson College of Business in Atlanta. G. James Lemoine is an assistant professor at the University at Buffalo’s School of Management in New York.

This article originally appeared in BizEd's July/August 2020 issue. Please send questions, comments, or letters to the editor to bized.editors@aacsb.edu.

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