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Figure 3 shows the VUCA diagram from Bennett and Lemoine (2014). It is shown in the form of a two by two grid, with a vertical axis and a horizontal axis which do not show values but have arrows at the end of the axes to suggest that values go up, in the case of vertical, or to the right, in the case of the horizontal axis. The vertical axis is labelled ‘How much do you know about the situation’, suggesting higher or lower knowledge, with the horizontal axis being labelled ‘How well can you predict the results of your actions?’ suggesting higher or lower predictability. The four VUCA concepts – Volatility, Uncertainty, Complexity and Ambiguity each have one square of the two by two grid, each with a list of characteristics, examples and approaches. At top left of the grid (higher knowledge, lower predictability) is ‘Complexity’. Characteristics are listed: ‘The situation has many interconnected parts and variables. Some information is available or can be predicted, but the volume or nature of it can be overwhelming to process.’ Example is listed: ‘A grocery retailer might find that different markets have diverse regulations, tax regimes and shopping habits and expectations.’ Approach is listed: ‘The retailer may respond by building local partnerships or with a programme of management development through expatriate placements, or with a targeted drive for local talent recruitment and so on.’ At the bottom left of the grid (lower knowledge, lower predictability) is ‘Ambiguity’. Characteristics are listed: ‘Causal relationships are completely unclear. No precedents exist; you face “unknown unknowns”.’ Example is listed: ‘Entry into an emergent market will make demands on knowledge and agility.’ Approach is listed: ‘Pilot experiments and recruitment of local staff may be considered.’ At the top right of the grid (higher knowledge, higher predictability) is ‘Volatility’. Characteristics are listed: ‘The challenge is unexpected or unstable and may be of unknown duration, but it’s not necessarily hard to understand; knowledge about it is often available.’ Example is listed: ‘a change of government in a foreign location may result in a change in tax policy or in tighter regulations, or an economic crisis may result in plummeting sales revenue.’ Approach is listed: ‘Planning options may include lobbying of governments, reconfiguration of supply chains or online delivery across national frontiers. Human resources would need to be in place to deliver on such strategies.’ At the bottom right of the grid (lower knowledge, higher predictability) is ‘Uncertainty’. Characteristics are listed: ‘Despite the lack of other information, the event’s basic cause and effect are known. Change is possible but not a given.’ Example is listed: ‘A new entrant to the market muddies the future of the business and market.’ Approach is listed: ‘Greater market intelligence is required, an investment in data analytics may be justified; investment may be required in enhanced customer service and thus in staff training and selection so that a new entrant possibly competing on cost such as an Aldi or Netto might be countered with a different customer offer.’

 4 Volatility, uncertainty, complexity and ambiguity