Using VUCA for Strategic Risk Management


Risk Doctor Briefing


By Greg Githens




VUCA is well known as a framework for identifying threats and opportunities. The aspects of Volatility, Uncertainty, Complexity and Ambiguity also characterize the enterprise environment for organizational strategy and understanding them gives risk professionals an opportunity to contribute to the way that strategy is crafted.

  • Volatility. Gasoline changes from liquid to gas at a lower temperature than water, so we say that gasoline is more volatile than water. This is a good thing if you want to drive across the country, but a bad thing if you spill gasoline in a confined space. In financial markets, volatility refers to rapid changes in pricing trends. A high-tech stock would be considered more volatile than an electrical utility. Generally, volatility is associated with emergent growth opportunities, and it can be useful if you’re in a relatively weak strategic position. On the other hand, volatility is undesirable if your organization requires predictability.
  • Uncertainty. What is the probability that it will rain today? This is an example of uncertainty because an explicit answer can be provided. Uncertainty is the focal point of classic risk management because it is concerned with specific events (threats or opportunities), the probability of those events occurring, and the impact of those events if they do occur.
  • Complexity. It is useful to distinguish complex systems from complicated systems.
    • A complicated system is one where it is possible for a suitably-skilled expert to analyse and understand causes and effects. A car is a complicated system, and a knowledgeable mechanic could disassemble and then reassemble it, but a layperson could not. Strategy work in highly-regulated industries might be complicated in that a suitably-qualified expert could develop an effective strategy.


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How to cite this paper: Githens, G. (2019). Using VUCA for Strategic Risk Management; PM World Journal, Volume VIII, Issue IX, October.   Available online at https://pmworldlibrary.net/wp-content/uploads/2019/10/pmwj86-Oct2019-Githens-Using-VUCA-for-Strategic-Risk-Management.pdf



About the Author

Greg Githens




Greg Githens is the author of How to Think Strategically. Sharpen Your Mind. Develop Your Competency. Contribute to Success. He has substantial direct experience in designing, developing, leading, and coaching strategic initiative programs.

He is skilled at building alignment in people that enables them to get the tough work done. He has the skill to efficiently structure, plan, prioritize, and implement high-risk, high-reward initiatives. He works effectively with people at all levels of the organization. His hands-on experience gives Greg the seasoning to make good judgments and quickly add value. Over his 25 years of experience in strategic programs and innovation, Greg has developed and acquired practices that address the “crux of the matter.”

Greg enjoys sharing his expertise with others and says, “I want to make an impact.” Greg leads three popular seminars for PMI SeminarsWorld as well as coaches and facilitates results for leading organizations

Greg can be contacted at GregoryDGithens@cs.com or https://strategicthinkingcoach.com/