We're Living in a VUCA World
- awalker187
- Sep 26
- 3 min read
“If you’re not confused, you’re not paying attention.” - Tom Peters
In January 1955 Fortune magazine published their first 500 list, ranking the top US companies by revenue.
70 years later, only 49 of those companies still exist on the latest list.
Less than 10%.
It’s been a massive process of bankruptcies, mergers, reorganisations, or wholesale market disruption.
There’s also been a dramatic shift from the industrial age to the information age:
In 1955 more than half the workforce of the western world was involved in making and transporting physical goods, today it’s less than one-eighth.
Today the average wristwatch contains more computing power than existed in the whole world in 1955.
“Every successful organisation has to make the transition from a world defined primarily by repetition to one primarily defined by change. This is the biggest transformation in the structure of how humans work together since the Agricultural Revolution.” - Bill Drayton
But it wasn’t one sudden change that drove this turnover.
There’s been an ever accelerating pace of creative destruction.
Schumpeter's Gale
The economist Joseph Schumpeter popularised the idea of creative destruction to describe the evolutionary nature of capitalist economies:
"This process of Creative Destruction is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in.”
“Capitalism ... is by nature a form or method of economic change and not only never is but never can be stationary. ... The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers' goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates.”
“[Capitalism requires] the perennial gale of Creative Destruction”
In business, like nature, it's survival of the fittest.
And the pace of change has been accelerating.
By tracking the loss of companies from specific list years of the Fortune 500 you can see the increasing rate of turnover.
It took 27 years for half of the 1955 list to drop off, but for the 1995 list it took less than half the time:
A series of factors including digital transformation, globalisation, innovation rate, climate change and population growth are changing the world we work in in dramatic ways.
And for much of that change is happening faster and faster.
The rate of technical adoption is a good example:
After the early adopters, it took another 60 years for 80% of Americans to have a telephone.
It took 6 years for smart phones to reach the same level of adoption.
And in the last few years AI, epidemics and political volatility are adding even more factors that we have to react to.
The world is moving faster and becoming more complex.
Peter Drucker, one of management's most influential thinkers was right in saying, “We are in one of those great historical periods that occur every 200 or 300 years when people don’t understand the world anymore, and the past is not sufficient to explain the future”.
The Age of VUCA
In 1987 the US Army War College started using the concept of VUCA (Volatility, Uncertainty, Complexity, Ambiguity) to describe how the world was becoming more multilateral and complex after the end of the Cold War.
The acronym has since been adopted by the business world, to describe the current environment we have to operate in.
We’re living in a VUCA world.
And this pace of change is only increasing.
As John P. Kotter says in his book, Leading Change, “The rate of change is not going to slow down anytime soon. If anything, competition in most industries will probably speed up even more in the next few decades.”
In a VUCA world business and the people operating in it have to constantly work to keep ahead.
If you’re not changing and improving, you’re in trouble.
“The greatest danger in times of turbulence is not the turbulence - it is to act with yesterday's logic.” - Peter Drucker
“Change is the law of life and those who look only to the past or present are certain to miss the future.” - John F. Kennedy
