Simplicity - Winning in a VUCA World
In today’s world, no matter who you are or what cause you have dedicated your life to, you encounter a lot of uncertainty all around you. It won’t be a stretch to call this era a VUCA - Volatility, Uncertainty, Complexity and Ambiguity one. All things you do, decisions you make, people you deal with, virtually all interactions with the external world are in the realm of VUCA. Not to say that conversations with your own self have gotten any more straightforward. There is a dire need to bring simplicity into your life. There are tomes and tomes written on this subject, but a few simple steps I recommend might go a long way in bringing simplicity to your life.
Let’s start with a straightforward scenario: you are going from Point A to Point B, and there are three route options available. Which one are you most likely to take? Most likely, you are thinking that it is the one that Google Maps recommends. What will we ever do without that app? But on a serious note, I would guess that it would typically be the most straightforward and simplest route that you select. Isn’t it? Well, this is true for all things in life, or at least most things in life. If you have two theories that fit all the available data, the best theory to go with is the one with the least number of assumptions, i.e., the simpler one. If you have two competing explanations for anything, the simpler explanation is preferable to the complex one. This principle is called Occam’s Razor* or the Parsimony Principle, which supports simple, straightforward answers and
simple models. Nature too endorses this preference for simplicity. The math that describes nature can be both simple and elegant at the same time. Einstein’s E = MC2, a simple equation of just three letters, lays down a profound principle which tells you that matter and energy are the same. Another example is Heisenberg’s Uncertainty Principle, which limits what you can and cannot know about reality, at least when you talk of things at small scales. Both these equations are so elegant that they can fit nicely on your teacup or t-shirt.
Typically, things are not as easy, though. When it comes to making a decision, big or small, you are likely to base them on what has worked for you in the past. This is a direct gift of natural evolution over the centuries, and lots of these decision-making frameworks are hardcoded in us as a species. However, the world is far more dynamic nowadays, and things are moving and changing at breakneck speed. This is exacerbated by the influence of technology and resultant disruption literally in all walks of life. System 1 thinking that worked in the past may not work so well now. You must master new skills to ensure you remain on top of things and excel under VUCA circumstances.
Some simple steps to win this VUCA battle are:
Start thinking out of the box and asking new and different questions
Develop empathy and the ability to understand opposing perspectives on issues where you have a firm view
Fight the notion that you know it all. Take feedback. Give feedback. Humans were never meant to be an island to themselves, which is true now more than ever.
Develop your personal board (like a board of directors in a company) whom you can consult and take advice from.
Start listening. Do you start framing your response even before someone has made their point? You will have to work hard to change this habit and truly listen. This is the key to learning and making life simpler for yourself.
Develop second-order thinking to make your life simple and avoiding the future impact of current decisions
Avoid the temptation to add more assumptions to your models, processes, rules, procedures and the like. They only increase VUCA, not reduce it.
To win in this ever-changing world, you have to keep changing and making continuous incremental progress. This can be accomplished by making safe-to-fail bets regularly. If you’re right, you learn and get better. If wrong, no harm was done as they were safe to fail in the first place.
Acknowledge and manage your emotions. VUCA plays havoc with your decision making primarily because all decisions involve some amount of emotions, whether we like to admit it or not. Keeping things simple consists of managing our emotional response and managing the role of emotions in our decisions.
“The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday’s logic”
Please don’t mistake all of this to mean that the simplest options are always the best. They aren’t. Simplicity is the thumb rule only when all available data has been considered between two options that lead you to your destination. Let’s assume there were two routes for the US to leave Afghanistan for good - a simple, straightforward goodbye, I’m packing my bags, wish you luck, and poof, the US folks are gone. The other route is a complex path ensuring infrastructure building and safety for the regime they had supported all along. It is amply clear now that the simple way hasn’t worked out well for most parties concerned, except the Taliban.
Another current example is from the area of macroeconomics. Global interest rates have been artificially kept low to spur global growth in the face of the ongoing pandemic. Some folks may argue this to be a consequence of the efforts taken to save the global economy after the global financial crisis of 2007. There is endless speculation about when central bankers will allow these rates to rise and find their natural levels. Decision-makers have seen how the taper tantrum of 2013 impacted global financial markets and economies. At this time, there seem to be two options: remove liquidity by fiat and hike rates straight away or slowly take away excess liquidity and hike rates in a measured way. One is a hard landing scenario, while the other is a soft landing. No one knows which one is the best way, but intuitively and based on experience, the simple straightaway method of hiking rates by fiat might not be the world would prefer.
You live in a VUCA world and have to learn and adapt to ensure we make the most of this
dynamism rather than being a victim. Here’s wishing you all the luck.
*Occam’s Razor is so named as it was first formally postulated by William of Occam somewhere in the 14th century.
It is a razor because it cuts away complex solutions and leaves you only with the simpler ones.