Because VUCA: How Complexity Causes Persistent Marketing Problems
We’ve all experienced VUCA. You are driving at the speed limit when traffic suddenly increases, blocking the freeway for hours. Plans for an outdoor wedding get foiled by an unexpected downpour. A tiny bat virus escapes its host and unleashes a pandemic. All systems in nature are VUCA, an acronym standing for Volatile, Uncertain, Complex, and Ambiguous. VUCA characteristics arise from the interactions of many independent agents. Numerous feedback loops result. Situations change rapidly. Many unknowns. Unpredictable.
The marketplace is VUCA. Marketing is about human behavior and well, we are kind of crazy. The capriciousness of marketing derives from the same complex environment as traffic, weather, and biology. Many interacting agents - customers, competitors, social networks, partners, regulatory entities. Numerous feedback loops. Situations change rapidly. Many unknowns. Unpredictable.
VUCA is why the most accurate representation of the buyer’s journey is a child’s scribble. VUCA is why a campaign can blow the roof off in several markets then inexplicably fail in New York tomorrow. VUCA is why it is impossible to completely capture marketing return-on-investment.
Digital dynamics have accelerated the rate of change forcing marketing’s VUCA reality into sharp relief. By removing historical constraints of distance, scale, intelligence, and malleability, digital has caused an explosion of disruption. As digital interactions between market participants increased, the resulting feedback loops ricocheted with greater turbulence. Market agents, especially customers, have gained power. Marketing’s VUCA environment can’t be ignored.
It’s only been a few decades since the world started to recognize VUCA and its implications. Scientists formed conceptual models in the 1960’s and 70’s. The term was coined in 1987 when observers noticed how traditional ways of working floundered whenever the environment was VUCA. The U.S. Army quickly grabbed the concept. At last, a framework characterized the global tumult they faced following the cold war. Innovative software developers recognized how the VUCA attributes of their digital work conflicted with traditional waterfall development practices. As a result, they initiated Agile methodologies.
Marketing organizations are just beginning to realize the implications of working under VUCA conditions. The more marketing leaders learn, the better off they will be. Similar to what software developers found, the mismatch between long-accepted marketing work practices and VUCA reality is the source of many persistent marketing challenges.
Traditional work systems were invented early in the 20th century when efficiency was the big challenge. Management innovators including Frederick Winslow Taylor and Henry Ford grappled with an uncoordinated and relatively unskilled workforce. They invented repeatable processes to increase the productivity of minimally skilled workers. They professionalized management for the first time. They instituted hierarchies whereby thinkers at the top directed labor at the bottom. Duplication was reduced and efficiency honed by grouping specialists together (e.g., skills, roles, tasks, or products). This system of work was tremendously successful, enabling businesses to grow and scale. By inventing the assembly line and adopting what Taylor called scientific management, Ford increased worldwide market share to 60% within a decade. Once this work system saw gains on the shop floor, its tenets spread rapidly and widely. Most companies today adhere to scientific management practices without even realizing it. Whenever work conditions remain stable, industrial-era practices produce order and efficiency. However, as the world speeds up and becomes increasingly connected, stability has become rare.
Under VUCA conditions, effectiveness is more important than efficiency. To compare industrial-era conditions with VUCA, consider this thought experiment. Imagine you know little about the seasonality of weather. It’s early June and you aspire to hold an outdoor event. You diligently study the environment and create thoughtful plans on the assumption that June conditions --sunshine, heat, and humidity -- will remain stable. You execute perfectly. However, the outdoor event is scheduled for December. Imagine your shock and dismay when you launch in the midst of a December snowstorm.
Working under the market’s VUCA conditions is significantly different than the slower, stable, conditions assumed by the industrial-era work system. Here’s how conditions are different.
Requirements are uncertain: Hordes of agents independently act. You can’t predict which agents will take which actions, or how these will influence each other. Anything could happen. Compare this pandemonium to a calm situation where all inputs can be known and controlled.
Requirements constantly change: Pandemonium persists. At no point can you freeze the frame and say, “There are the requirements.”
Required outcomes are highly variable. The December weather on the day of your scheduled event could be almost anything. Clear, warm, and gorgeous or horribly cold and stormy to the point where none of your invited guests arrive.
Production requires high-skilled workers: Effectiveness under VUCA conditions requires ingenuity and innovation. Situations that involve human agents need relationship capability. These bespoke conditions require people with higher level skills, significantly different from the repetitive, assembly-line, requirements.
Reimagining the Marketing Organization for VUCA Realities
While VUCA environments can never be controlled or even completely predicted, more appropriate work approaches enable better outcomes. Inspiration and guidance for a new marketing organization comes from several sources.
Pioneering Organizations: In his book, Team of Teams: New Rules of Engagement for a Complex World, former U.S. Army General Stanley McChrystal describes how he found coalition forces failing in Iraq, despite their astounding force and exceptional planning. Al Qaeda were adaptive. When a mission failed, generals doubled down. Plans got more detailed. Machines got better. But it didn't work. Before the coalition could decide on a course of action, the situation had changed again. McChrystal revised operations to gain greater agility. He replaced the traditional military hierarchy with a network of teams. He broke down information silos by empowering operators close to the action while ensuring operators at the edge and intelligence agents back at HQ had full availability of what the other knew.
In almost every industry you can find forward-looking companies adopting new work patterns such as flatter bureaucracies, organizational networks, and self-organizing teams. Companies including Zappos and Spotify have innovated organizational alternatives. Progressive marketing teams experiment with better approaches to account-based marketing and digital marketing. Management consultants such as McKinsey conduct research and work with clients to redesign operations and organizations for a VUCA world. Improvements to increase resiliency in industry, public systems, and the environment have accelerated.
Agile Methodologies: Software developers previously used a highly structured ‘waterfall’ process. First, gather requirements, then code, test, and finally release. By the mid-90’s software projects developed in this way regularly failed because requirements changed in mid-stream. In recognition of digital dynamics, developers invented Agile methodologies, such as Scrum, Kanban, and Lean. Agile increases speed and flexibility without sacrificing organization or quality.
Agile marketing borrows from Agile software development methodologies and is evolving on its own. Agile marketing basics can be gained in a few days from a competent coach and there are many helpful books available.
Data Practices: Marketing organizations with access to more data and more advanced data practices find themselves adapting their approaches to working with customers. The data exhaust of digital interactions along with research in behavioral economics reveals the complexity of decision-making dynamics.
Future of Work Research: Under VUCA conditions, the most successful companies will be those that best harness human potential. Organizational experts have produced many studies, frameworks, and books on relevant topics including new leadership styles, purpose, and work styles.
Science: Insights from complexity science, network science, behavioral economics, and other disciplines continue to inspire new ideas for more effective work systems.
We have much to learn about how to best work in the VUCA world. Migrating from conventional models won’t be easy. However, it’s a relief to know that marketing’s persistent problems don’t have to be endured. Problems can become advantages when viewed through this new lens.