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Meteors, VUCA, and Business Agility

Once upon a time, two-ton wombats lumbered across the Australian Outback. Around the same time, sabre-toothed cats and woolly mammoths roamed freely across Europe and North America. Millions of years earlier, massive dinosaurs had been king and queen of all they surveyed.

The massive size of these long-extinct creatures is a function of evolution’s propensity for larger animals. Four million years ago, our ancestors stood a mere four feet tall. We have grown, and continued to grow, ever since. This makes sense on many levels. Larger animals are better able to cover ground to find resources, catch prey, and overpower predators. Given that these traits are all vital to survival, it seems that evolution largely favours larger creatures.

So why, then, are there not giant animals roaming around today? Why have these majestic creatures all been consigned to history? To answer that, let’s go back 66 million years to what is known as the Cretaceous-Paleogene extinction event, when a mountain-sized meteor struck the earth near the Gulf of Mexico. The impact set off a chain of events that wiped out 75 percent of life on earth, including all dinosaurs. The only survivors were small creatures that could easily find shelter, scavenge for food, and quickly reproduce and adapt to the new environment.

It appears that the very attributes that help animals survive day-to-day are the opposite of what is needed to survive a dramatic shift in the landscape. Nature, it seems, has a balancing force in play. While evolution tends to favour larger creatures, extinction is kinder to smaller ones.

Fast forward to today, and we see a very similar phenomenon. From the late nineteenth century through to the mid-twentieth century, organisations competed on economies of scale and efficiency. Growing ever-bigger and becoming more efficient at producing the same product was a competitive advantage. Organisations were built, and perfectly optimised, for their environment, much like the dinosaurs were before the meteor struck.

That was, of course, until a twenty-first-century extinction event struck. It was less spectacular that the Cretaceous-Paleogene extinction event, but no less destructive.

Technological advances, deregulation, and increased interconnectedness have lowered barriers to entry. This has changed the world, and the business climate, in a fundamental way.

We can sum up this “event” as increased VUCA:
Volatility – The relentless increase in four dimensions of change: type, speed, volume, and scale. This means that what worked yesterday may not work today.
Uncertainty – There is very little that we can know for sure. We must seek constant feedback to validate our assumptions.
Complexity – There are many moving parts, all interacting in ways we cannot predict in advance. Complex systems are unpredictable and non-linear.
Ambiguity – When we undertake the creation of knowledge work, we face many unknowns that can only be discovered as the work progresses.

The implications of this are vast. In a world of very low predictability, and that is changing faster than ever, knowing the right thing to do has become all but impossible. Suddenly, it is no longer enough to produce known, well-defined products efficiently. Suddenly, the competitive advantage jumps to those who can create new, innovative products and services. Organisations that are over-optimised for a stable, predictable world that no longer exists are ill-equipped for the world in which they find themselves. They are efficient but not adaptive. And those that are too slow to adapt begin to die off. From Kodak to Blockbuster to Borders, we have seen, and continue to see, that the world is now truly a matter of survival of the fittest – those most able to adapt quickly to new circumstances.

The ability of organisations to reinvent themselves, to continually create new, exciting products, services, and business models, and to adapt faster than their competitors is what it takes to survive and thrive in today’s VUCA business climate. We call that ability business agility, and it is the new competitive advantage.

To find out more about how to achieve business agility, check out our Certified Agile Leadership course page.