By Chris Turner, Co-Founder and Managing Partner, StrataBridge and Glen Margolis, CEO, Steelwedge Software In a 'VUCA' world, it's time to change your company from one conditioned for control to one aligned for growth. Volatility, uncertainty, complexity, ambiguity. Thanks to the U.S. Army, we have a handy acronym for the set of conditions and drivers facing virtually every business today. To learn more about S&OP please visit: http://www.steelwedge.com/solutions/

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VUCA
The Right Mindset:
Bridging the
Control-Growth
Divide
Volatility: Threat or Opportunity?
By Chris Turner, Co-Founder and Managing Partner, StrataBridge and
Glen Margolis, CEO, Steelwedge Software
In a 'VUCA' world, it's time to change your company from one
conditioned for control to one aligned for growth.
1
Volatility, uncertainty, complexity,
ambiguity. Thanks to the U.S.
Army, we have a handy acronym
for the set of conditions and
drivers facing virtually every
business today.
While last year’s earthquake and
subsequent tsunami in Japan
brought special attention to the
impact of natural disasters, VUCA
reaches beyond Mother Nature.
VUCA is a truly dynamic term
encompassing technological
disruption, transitory advantage,
fractured markets, multifarious
competitors, global economic
conditions, unstable governments,
political unrest, volatile financial
markets, and fickle consumers.
Each of these factors drives their
own special brand of complexity
and uncertainty. However, when
such events occur simultaneously,
their impact is complex and
profound.
Against this backdrop of exponen-
tial change, it’s easy to become
overwhelmed and highly risk
adverse. This is especially true for
control-oriented executives who
believe that efficiency is the only
path to high performance and that
improvement requires control and
predictability.
But the history of growth has been
built on a yin/yang of two essential
conditions. First: a capacity to
nurture and develop new ideas
against the gravitational pull of the
status quo. And second: an
unpredictable environment that
forces and accelerates the need for
new combinations.
A capability to continually make
sense of a changing environment
and seek out new and novel ways
of creating value requires a growth
mindset; a belief in the competitive
advantage offered by agility and
the rewiring of the hard and soft
organizational capabilities –
structures, processes, technology,
skills, behaviors, etc. – to survive,
adapt and thrive against a
backdrop of change.
This growth mindset, the capabil-
ity to change and adapt, is often at
odds with the compulsion and
pressure to continually tighten our
grip and drive greater efficiency
from our current systems,
processes and ways of doing
things. The paradox is, the further
we drive the control mindset – as
we eek out every last drop of
efficiency from a given way of
working – the more fragile we
make it in the face of new, different
or unexpected shocks and events.
Caltech research scientist John
Doyle coined the phrase Robust-
yet-Fragile to describe complex
systems that are resilient in the
face of known or anticipated
conditions, but highly susceptible
to unanticipated threats or shocks.
By definition, a VUCA world
delivers more capricious, more
extreme, and more unexpected
events and conditions.
Turning this to our advantage
requires a recalibration of how we
develop, deploy and deliver our
strategies and business objectives,
and the planning and execution
processes that support them.
Approaches that have previously
delivered improving efficiency
quickly reveal their inbuilt but
implicit fragility, surfacing critical
trade-offs between control and
fragility on the one hand and
growth and robustness on the
other.
Today’s VUCA environment can
actually add up to a competitive
advantage for organizations that are
suitably prepared. Following is a
snapshot of the mindsets, models,
examples and take-away questions
for evolving your organization from
one conditioned for control to an
ecosystem that powers growth.
The contradictory pressures of both
growth and control have long
created a paradox and require a
delicate balancing act.
There is a growing awareness that
adaptive systems – those that
survive and thrive in hostile and
volatile conditions – carefully
balance mechanisms and
capabilities for both control and
growth.
In the vast majority of businesses,
the prevailing ethos, conditioning,
tools and techniques of the last
50-100 years have favored the
‘control’ mindset over the ‘growth’
mindset. While this delivered
results in stable, predictable
settings, it has in many cases
unfortunately resulted in very rigid
and fragile structures and has
served to heighten the
Control-Growth paradox now that
the external environment is
changing.

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The paradox is compounded yet
further given the speed at which
we need to recalibrate our
mindsets, processes and behaviors.
Most companies do not have the
time, or the appetite, for
large-scale, company-wide
‘initiatives,’ and in the spirit of
agility, we need to progress rapidly
recognizing the overlapping and
interdependent nature of strategy
development, deployment and
delivery – keeping focused on our
strategic objectives while
remaining flexible about how to
achieve them.
A typical pitfall in managing for
both now and the future is the
artificial separation of ‘strategy
development’ and ‘strategy
execution,’ founded on the
outdated belief that a small group
of ‘masterminds’ can determine the
route to our goals and the rest of
the organization just needs to
march along it. The dimensions of
strategy development, deployment
and delivery need to become much
more overlapping and intertwined,
forming an on-going and adaptive
strategic dialogue – simultaneously
focusing on both delivering now
and developing for the future.
Traditional demand and
supply-based planning processes,
such as traditional,
operationally-focused Sales &
Operations Planning (S&OP), that
pursue the holy grail of
predictability and accuracy project
management and Stage-Gate-type
processes that look for certainty
from the earliest gates; measures
and scorecards focused on
functional control, as opposed to
cross-functional alignment and
pointing the way to strategy, etc.,
are beginning to collapse under
their own weight and, unless recast
to cope with the new normal, will
lose value through irrelevance.
Take just one sacred cow in the
S&OP process for example: the
perfect forecast. Tomes have been
written, millions have been spent
and careers have been lost in the
quest to secure the “right” number.
In a VUCA world, a much better
quest than building the perfect
forecast is building the
organizational agility that enables
your business to adjust to quickly
shrinking or quickly growing
demand by equal measure.
A great example of this is a
100-year-old manufacturer of
construction supplies that grew
through more than three dozen
acquisitions over its history. The
same scale afforded by the M&A
also created overlap, inefficiency
and “stiffness” in the company’s
ability to move in synch with the
market.
This company righted the
situation with a supply chain
strategy and mantra to:
The strategy was entirely driven by
a highly dynamic and responsive
collaborative, cloud-based
integrated business planning
system. At the heart of the strategy,
one word: agility.
The company broke up a
centralized warehouse and
distributed materials. It got rid of
pre-fabricated parts and stocked
just raw materials. It jettisoned
overlapping systems and
connected a central planning
system through integrated business
planning technology.
And, it united multiple demand
plans into one view through a
dynamic collaborative demand
aggregation process. That view
enabled it to do “what if” scenario
modeling to scope opportunistic
potential, evaluate downside risk
and build drastically greater flex
into its operations. The vice
president of Supply Chain shared
the result, counter-intuitive to the
control paradigm at its core: “We
made the demand forecast
irrelevant!” Indeed, by turning its
supply chain model on its head,
right down to the fundamental
mindsets and metrics, this business
was able to meet up to 30%
unforecasted demand. That is
agility for growth.
Eliminate surplus
Stock only raw materials, and
Create quick turn through a
network of build-to-order
manufacturing hubs throughout
its territories, none more than a
day’s drive from the customer.
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Joined-up –or collaborative--
decisions get to the heart of what is
needed to align the many moving
parts of a complex organization.
Connecting across organizational
boundaries, linking strategic
choices and tactical actions, and
integrating long-, medium- and
short-term horizons are critical to
this alignment.
But now clockspeeds of different
decisions are changing – challeng-
ing the typical annual, quarterly
and monthly planning calendars.
As a result, the conversations need
to be different to integrate existing
and new portfolios, sense for weak
signals of change, and simultane-
ously execute strategy and inform
an ongoing strategic dialogue –
changing the players, the questions
we need to ask, the information
required and the way decisions are
made.
MetroPCS, a company launched in
1994 in the chaotic telecommuni-
cations market, uses joined-up
decision making to keep agile.
MetroPCS created a niche of the
“anti-contract” in a market that
extracted a heavy premium of
200+% cost for the hottest new
phones unless customers were
willing to sign up for two-year,
lock-in contracts. Its competitive
play made MetroPCS even more
vulnerable to the biggest volatility
of all: the fleeting fashion of
consumer trend. In the smart
phone business over the past few
years, the average length of use of a
smart phone deflated from 18
months to seven.
MetroPCS, driven by a need to
better match its bottom-up with its
top-down forecasting, used a
cloud-based integrated business
planning software solution to bring
together six systems, dozens of
spreadsheets, and hundreds of
details across its multiple SKUs to
power a necessary nimbleness.
MetroPCS knew from experience it
needed enough insight on trade-off
scenario planning to respond on a
Friday to a new competitive model
on the market—and deliver on a
Monday a promotional campaign
to avoid “islanded” handsets, that
would quickly fall out of favor. Its
strategy was all about joined up –
fast moving – decision-making, but
MetroPCS got a bonus in the
process.
Their integrated business planning
automation ensured a rigor in
cross-company data quality and
collection that resulted in, for the
first time, a look at the most
granular feature and function level
of every SKU imaginable across all
of their handsets. In this case,
MetroPCS’ strategy for business
agility has the serendipitous results
of generating a central SKU item
master database that is now used
by the entire organization as the
product “go to” resource.
Where do you start? Of course,
control will still matter, but it will
matter less and our definition of
‘control’ will need to be recast as
the capabilities for growth matter
more. Following are some
questions to frame, focus and
accelerate the transition from a
traditional, control-focused
organization, to an agile one,
aligned for growth:
In approaching these questions
with a growth mindset and looking
for new opportunities, consider the
words of Nobel prize winner
Albert Szent Gyorgi: “Discovery
consists of looking at the same
thing as everyone else and thinking
something different.” When you
are open to change, volatility
drives opportunity.
Chris Turner is co-founder of
StrataBridge, a boutique consulting
firm that specializes in advising
fast-moving, brand led organiza-
tions on strategy, innovation and
operations. He has worked with
leadership teams around the world
including Anheuser-Busch,
Bakehouse, Coca-Cola, Compass
Minerals, Mars, Mass Mart SA, PZ
Cussons, SC Johnson, Shell.
Glen Margolis, CEO of Steelwedge
Software, has led the industry in
the development and delivery of
technology to power planning
agility. Steelwedge is the global
market leader of cloud-based
integrated business planning (IBP)
and collaborative S&OP solutions
trusted across the world’s best
manufacturers including Lenovo,
Jaguar Land Rover, Canon, Sony,
Tyco, Dow and Emerson.
Do our decision-making
processes and forums ask the
right questions, bring together
the right perspectives from across
the business, and generate
insight and coherent actions in
support of our Control-Growth
balance?
Do we have explicit
development actions building
organizational capability to
develop agility and use VUCA
to our advantage ?
Are we countering VUCA with
vision, understanding, clarity
and agility, and accelerating
results through an aggressive
transition, rapid experimentation
and learning-by-doing ?
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The Right Model:
Joined-Up Decision
Making
The Right Questions:
Balancing Control &
Growth for Agility
Does VUCA represent a strategic
threat or opportunity in our
environment and do we
understand our drivers of growth
in this context? Are these
reflected in our strategy, tactics,
and underpinning assumptions
and plans ?
Are we wired for Control or
Growth? Are our internal
mindsets, processes, routines
and behaviors synchronized
with our external realities ?
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