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Management Innovation in a VUCA World: Challenges and Recommendations

Authors:
Carla Millar at University of Twente
Carla Millar
Olaf Groth at Hult International Business School
Olaf Groth
John F. Mahon at University of Maine
John F. Mahon
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Abstract

Our Call for Papers focused on breaking established patterns and models and showcasing management innovation in a world in which Volatility, Uncertainty, Complexity, and Ambiguity (VUCA) reign. VUCA is both an outcome of disruptive innovation and a driver of it; and frequently VUCA is used as an excuse to avoid planning and action. While research has pursued the four elements independently, interaction and integration have been lacking. This article introduces three papers and offers 15 challenges as well as implicit and explicit recommendations to manage in the unpredictable and challenging VUCA world.
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Challenges and recommendaons for management innovaon in a VUCA world.

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Abstract
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**"(1!(“Management Innovaon in an Uncertain
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**"-%!.>*!"!*(
*!!-?%!!"-.!!
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"!"'(!!!-'
"3(" @*)!6%%-"-:A8B
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*5!H!"*"'-
"*(""%!(-"!%!!%%!"'
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!.%-4 *.
"(1!*!%!(%!-2!-!"3!!
!"*!**""'%'
5'-%'.)"'4 "!-("5(
!C'%'5'-%'-!'D!-%!!!
.4 !-"%(!%(.)"
(4 **!%-'"..'!"!
"!2%"(%!""
-"-!.)"!-2!
"!(!'!!%"!H!!"!'
?!!!%!!I'""'!
*!!'-'"!!I!6%2'7'
J'"5!("'H--%(6%''-3C
I!!"!-%'!%%*"*!'
-!%!*"*!.i
6%'4 !%!!"*#!
!?'!!*%!"!*"
"!"!.)"-!""!"!!'%"
!2."!!%(*"4 *'%&
@D!"%"K%*H?%(('F'(
!!"(%!(4 .
"2!4 !!"!%!"!%%!(%!"
3-%"!"3-%!.)"!!HHH'
%'5'-%'"-%!%-'!"!'
.)"7(*!"("("!!!*!%!%
'.8LB:(5&%@!'2%%"
!%!(%'"-'?'.
*2-'3&!I1I%%!"!2%'!
"?M-%2%("7!(
-%'5'I!!"!!!*"*'.
+!("!2(!"!"""!-(%!
"(-%'%'."!"7
!!!%%!(%'-%'"'/
'/"!(!%*"""-!!!
"!%%("-<%"!(-!=!-%!
!!!C*""!"2*("%("!-!.
-%'8/"!(!%*"""-!!!
"!('-!!.)"!"!-*"
-!"-H!"!(
.
-%':/"!(!%*"""!(-!
!*!"(%!""-H!"!!
(vii
)"("!!("*!"*!
2!!!"-"(!%!!'*(%"!%
%-'%(!--%"-%-'%-(
"
!%"'%-%!!!
%!!
)"!%7(*!('-CF("'
-%!!!!'
)"!%7('"!"--%!!!
-""%2!!%(%'
!!
)"!%!('-!"('(
!%!!!%!-'
)"-"!!:A'!!"!(!%
"'!%-%--. "%"!%-!6%'"-
%N%!C-'"'-%!-'-%!!!(%!"
(?'!'O**P"(%!(
%"-!%%".)''("!"!"-
!(%("'"!!H(
-%!!!.*""'-%!-'"
'!%"!!!"(6%%
%C"Q("!D-2"'-%!
C%R%''-H"2%H"'H
%H!K!!2-!!!!!.
*"-"!"!!
"H7!(3"!(%"C(4 . ("!!
%"(H!"?
!%%!!'"!!"!!'!!
.*!%5"*!%H%!"
-%!!!*7"*'*2!<..!"="*
?!H!%%<..!"!!!="*-%!!!
!!!!!*"*"7!S
"(!5H!'2!"!%!(
?D!!!!"!!'%"%
. "%"!""!?!"(
%!%-"!"5
!"5-3%!("*4 !
7?!F!!.
!(%"&3R@D!!%!"!
(4 *%!"(%*!("'5
'""!''?-""!!!("
".T"!!-(%"!"!"
-(!"!'((*2"!
"'!2E%"2!!.6%7!
(*2!*""!(%%!%!5.
6%'3!-"7!(
?(%<CC(
?'-'-5'.=
!%!%<..*-'%!'.=.7
"!*"4 6%-3%!(
-*"!*!.
@!-%!!"!!!%!7-'"4 
!''"7*-"<=
""(+!!%!.!""!!'N%!!"
"!%('(%!-7!!%"!*"
".1"!!C"(*"2"((
%'!"(!%"*"H!'
"%-!""!!%!!"
!(!""!"!!"!!. 
(%"!!-'-""*2("!
?!"!"%'5I5.%!%"!
2!"?!!!!%!!-'%25.
(%4 %!!(%!!"
/
!'%#!(!"/"!!'
!!"#!
'-%
-%!!!!
!!!#%%%'
?
?#!!#'
#2!%!
5%*!!5
!'!!
!(%"!(D!!!N%!!5!"
-%2!!-!*"*"%5'2*
*""'""--!& !%!*"
!!%"!"!('*!!"%"
5!(%"""!(.&"!%!-%!!!!
%"-(%!"*(%!*%!-*2
!!!N-!!%!'!!!!"%*"
!*(*22%("4 6%!5.
"*!"!""!%%"
!.)"'(%!!((%(%%!!/
H !!"I
H #2!#%!
H !!!
H ?#!!#'
The three papers
)"!"!""!%-N(%-(7!.
)"C!Innovaon, Dynamic Capabilies, and Leadership -'1%"2(
""%"!!""("!!(
.$*!(F"2""!!"
!)5I5"'!*""!"*!"*'-!*!%
("!-"%!!(%!HU!"
*-%!!!!.$"!?!"!-"%"%"
-%!!!N%!"'"%"-%!'""
!""%"%"';(!"&.@!"!
E""-("*'!!"%-%E
!!-''-
:V#G.
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in an Uncertain World: Implemenng a Customer Experience-Focused Strategy. )"!
%!!"!!("2!
/!('*!"%!*""
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"'!. "!!-
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%-%"%!"
%"!"'.)"!*'"%!*'!-!"%!
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.
)"CManagement Innovaon Made in China: Haier's Rendanheyi -'"
("&%!!!"!"""!"(!2!%!-2
-%"!(%!"!!!!!
-'$".@(!!2!"!-"
!!('%>!-%"!!"*!""!4 *
%""!-*"!.$!(!((
Q!D""%(%'%(!2H
!C"%"K(!"'.5H
!%!!"*!"C/"!
4 5""!!!"*!"!7-!!*!
$!"5%!.*"4 "!
*'!*!$!!!"-'
.
%?"!!!("!"!*!"%-((!
""!*4 *
%*'("4 -%2*2('%-'
%!5H!
!"%!%!!!(!(%!
!!!!"!!
"%%'C!!
--%'
(%!!!!*""''-!
Challenges and recommendaons:
"("!!"!!!"!%!!!*"!
(!*!%**%27"(*89"!!*!
5!-!%!!(%"%%-
":8!%'!5%!!!/O*3P
5%!!"%"!?'5'E5-'!
4 !%-!!(6%'
''"%"?!%E%'!!%!%'(%
!%!-%%!!
!(!"!'!!"2?!"!-!%-'*
!2!!"4 
!'!"%!!N%!!%""%
("-%!!"4 !'"(!%!!
"%!!!%"(!'!*""
%!'2*!""*"%!!will-
"(%%.*%!""(!!
%!!""?!*!-%*"
%!!!!%(!%-N""%"4 .
!25%%!'-%4 *
!H7'-%!*'(('I
"!%6%!"-'(!
N%!("!?
+?!!"%27"("/!%!!
4 !6%!"%"K%E*(*"
?"%"!(!2!"'I!-
%-'-%-!%-!%('-'!%"!
"!6%!("!!%!
@2*!?"!'"!-"('
'(*'!!-%"!Dê(
?!(%!*-%%*2'"'
(!"!!!!'-%!!!"-E5-
("OP"2
&%!!!!-OU(P(!
!(!!!('*-%!!!
!""!%"""(%'
@!"!!-!!""(6%'
-!!!(5(.." (!"
"!"!(-!!"%!!%"!(%5
?*"2!"
(*""2*H!2!*2!
H!%-!'!"!'!!
5
!!%-(!"("4 *!"-'
!'!*2%!"..("(!*
"!*2!*!!!""(%%""
N%!
)"!*"%*'("4 !!
!"%"2*2("-'2!%%!*"!
5H!
(%!**(%!%!"'
%!!!(!!!"4 *
(%!!!!!
"!!
)"?!!(%!!!!
*""''-!*"(!'!
@!!%"!""2
!(!!!!%%!'
C'?"!'!"*%"
!("4 *"!C'
"O!!%;(%!-(-P*!"*""!-'(
*!"!!'(!..*
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4 .
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... Gradually, the business world also started to feel the existence of the VUCA phenomenon and its various escalating impacts so that a large number of scholarly works were devoted to different topics related to how to survive and how to succeed in this new environment. These topics include, among others, leadership competencies (Bennett and Lemoine, 2014; Deepika and Chitranshi, 2021), new model of business administration (Popova et al., 2018), broader knowledge with new concepts and frameworks (Mack et al., 2016;Taskan et al., 2022), new habit, patterns and models of exploring the unknown (Bartscht, 2015;Millar et al., 2018), new decision systems (Minciu et al., 2020), antecedents of organizational agility and their effects on financial performance, product, and process innovation (Troise et al., 2022), how to manage VUCA ( Baran and Woznyj, 2020). ...
... Among all the reviewed studies, the reason that underlies the appearance of the VUCA environment is mostly unquestioned, except it was believed as a result of the ended Cold War (Barber, 1992) and an outcome of disruptive innovation (Millar et al., 2018). Hence, the importance for us to address the question posed in the previous section emerges in order for scholars to provide recommendations useful for managing the unpredictable and challenging VUCA world. ...
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Full-text available
  • Jan 2024
To help develop reliable managerial strategies in the VUCA environment, this paper examines what unprecedentedly happened in recent decades that made the environment appear. It demonstrates, among other results, that (i) the increasing attention towards economic development and the formation of cross-regional economies of 1990s made the business world more volatile than before, (ii) the massively increasing competition and the advent of internet in 1990s represent one critical reason for the business world to experience worsening uncertainty, (iii) the increasing use of partially reliable or totally unreliable knowledge since the 1990s made the business world more complex than before, (iv) the accelerated circulation of information since late1980s motivated decision makers and scholars to shift their knowing from the realm of thinghood to that of systemhood. That shift led to the appearance of various ambiguities for business professionals to face. This paper concludes with managerial recommendations and questions for future research.
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... This area sees journals such as California Management Review, Journal of Business Ethics, Leadership and Organization Development Journal. The lens of DCs could lend itself well, for example in association with the VUCA context -Volatility, Uncertainty, Complexity, Ambiguitywhich was the subject of a call for papers by CMR in 2018 (Millar, et al., 2018). MTP, a central attribute of the ExOs concept, perhaps analysed from an individual perspective could have a strong impact on this community: how the C-level people could develop an "exponential" leadership? ...
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Exponential Organizations (ExOs) are firms able to continuously disrupt their reference markets through an extremely ambitious purpose, unconventional ways of organizing, and an adaptive culture-all of which are catalysed through a proper usage of digital technologies. Despite ExO concept is gaining momentum among practitioners, we have scant evidence on how "going exponential". This work is based on a comprehensive and systematic literature review with a twofold aim: (1) understanding and reviewing the theoretical lenses to better interpret the topic; (2) rigorously placing it in the scientific literature, understanding a potential future research agenda for further deepening it. This research relies on an inductive approach and a bibliometric analysis carried out through VOSviewer to map ExO research with co-occurrences and bibliographic coupling analysis. As the term ExO is not yet systematically used into the scientific literature, we included several similar concepts that are related to this peculiar kind of organizations. Our findings allow demystifying the ExO concept and considering it as a way of thinking that allow fostering the development of dynamic capabilities, which are conducive to the generation of competitive advantages in highly turbulent contexts. Theoretical and empirical contributions are discussed together with a potential research agenda.
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... Very often, the concept of the VUCA world has been used by organizations to avoid planning because the working environment is too chaotic. Therefore, the fragmented approach to solving problems is increasingly used to respond to these challenges (Millar & Groth, 2018). In the VUCA world, situations do not offer a clear understanding and can be interpreted in many ways (sometimes in terms of both opportunities and threats). ...
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  • Mar 2025
  • Int Enterpren Manag J
Today’s business environment is characterized by volatility, uncertainty, complexity, and ambiguity (VUCA). As a result, most employees find themselves dealing with a complex world that is influenced by a variety of interconnected problems and where the consequences of events often cannot be identified. In this context, coaching sessions conducted through the prism of self-determination theory (SDT) can help prepare employees to navigate this complex world. The aim of this study is to examine how such coaching sessions can influence the performance of employees living in the VUCA world. Considering the theoretical background behind the VUCA world and coaching, this research also explores the most effective ways for employees to respond quickly to new unpredictable and vulnerable contexts. By interpreting respondents’ answers using the Kruskal-Wallis and Mann-Whitney tests, this paper provides a comprehensive perspective on the role of coaching in organizations, taking into account the constraints and influences of the VUCA world. Quantitative analysis shows that coaching through the lens of SDT has a positive effect on employees. Most employees report that these coaching sessions should be implemented continuously in organizations to successfully manage the challenges and uncertainties presented by the VUCA world. Thus, to effectively address the situations that characterize the VUCA world and to prosper in the long run, organizations should embrace coaching.
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... During the pandemic, the unanticipated instruction to abruptly shift from face-to-face meeting into ERT had put teachers in volatile, uncertain, complex, and ambiguous (VUCA) circumstances. VUCA results from disruptive innovation that challenges management in an unpredictable and demanding world (Millar et al., 2018). It entails a challenging and constantly shifting environment that requires adaptable and flexible approaches to knowledge, information, and change (Waller et al., 2019). ...
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... El término VICA fue propuesto inicialmente en el Colegio de Guerra del Ejército de los Estados Unidos por Bennis y Nanus (1985) con la finalidad de reforzar el liderazgo de sus oficiales frente a entornos altamente inestables, complejos y cambiantes; al igual que ocurrió con el término estrategia, el modelo teórico VICA fue adoptado en la literatura de negocios, donde se popularizó. Millar et al (2018) destacan la relevancia contemporánea del constructo, mencionando los acelerados cambios disruptivos que ocurren actualmente en el planeta en términos climáticos, sociales, políticos, demográficos, tecnológicos y comerciales; Wursten (2018) menciona una especie de agitación o inquietud de la gente al sentir que los intempestivos cambios globales los alejan de su mundo tradicional. Bennett y Lemoine (2014) definen los componentes del acrónimo y su utilización de la forma como se ilustra en el diagrama 1. En su aplicación del modelo VICA al turismo rural, Šimková y Hoffmannová (2021) califican al entorno de negocios como complejo, turbulento, dinámico y muy impredecible, incluso antes de considerar variables como crimen desastres naturales y crimen organizado. ...
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... The Covid-19 pandemic has created business uncertainty as a trigger for changes in the business world and industry to adapt to the new normal life as an indicator of the VUCA atmosphere (volatility -uncertainty -complexity and ambiguity). In the VUCA era, the old leadership style does not apply, but managers must integrate company functions and processes to create dynamic capabilities quickly and continuous innovation processes (Millar, Groth, & Mahon, 2018). depends on the skills, attitudes, and behaviors of all employees adapting to new strategies, structures, work processes, and even autonomy possessed by teams and individuals (Sakitri, 2021). ...
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Must VUCA evolve? A thematic literature-based analysis of VUCA research in the pre- and post-COVID-19 eras
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Full-text available
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Purpose The coronavirus disease (COVID-19) pandemic has confronted management with substantial challenges, requiring organizations to respond to dynamic market changes and continuously adapt to a volatile, uncertain, complex and ambiguous (VUCA) environment. The COVID-19 pandemic has highlighted this necessity by exposing VUCA concepts to substantial shock. However, whether the COVID-19 pandemic marks a phase of abnormal VUCA characteristics or whether organizations will face different VUCA challenges in the post-COVID-19 era is unclear. Design/methodology/approach We conducted a literature review to synthesize and compare VUCA research before and after the COVID-19 pandemic. Using a trend matrix, we illustrate and specify the evolution of research themes that address VUCA characteristics. Findings We present a VUCA evolution model that reveals a shift toward operational adaptability and continuous learning as key drivers in the post-COVID-19 era, as emphasized by the increased priority of people-centered approaches. The results indicate an organizational transformation toward self-organization that enables resilience through a holistic perspective of continuous learning and co-creation. Our study contributes to understanding organizations’ resilience and bridges the gap between the theoretical and practical VUCA research dimensions. Originality/value VUCA concepts were not coined with global pandemics in mind but were created to support organizations dealing with crises. We explored how the COVID-19 pandemic has affected VUCA’s conceptual foundations and research focus. Our results orient scholarship toward new foci of VUCA research and assist practitioners in identifying critical areas of focus regarding VUCA challenges in the post-COVID-19 era.
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What VUCA really means for you
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  • Jan 2014
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In this paper we organize research on work-related identities into a four-perspective typology that captures different ways identities can be "positive." Each perspective on positive identity - virtue, evaluative, developmental, and structural - highlights a different source of positivity and opens new avenues for theorizing about identity construction. We use these four perspectives to develop propositions about how different forms of positive work-related identity construction can strengthen employees through building social resources.
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Innovation and international business
Article
  • Nov 2016
While classical economic theories of growth emphasised international capital accumulation, and finance-based theories of foreign investment stressed international interest rate differentials and risk reduction, the technological accumulation approach examines international knowledge building by multinational enterprises and their international business (IB) networks. The two processes of innovation and internationalisation have become ever more interconnected as central drivers of development since the first industrial revolution, through to today’s information age. The increasing significance of the knowledge-seeking motive for IB networks and of competence-creating subsidiary activities at a local level have linked localised innovation systems to IB and to international knowledge exchange. From a locational perspective, international knowledge connectivity has become critical for sustained innovation and growth. The shift of techno-socio-economic paradigm in the information age is associated with a shift in the character of IB and innovation, with critical implications for IB theory and concepts.
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Growing at Work: Employees' Interpretations of Progressive Self-Change in Organizations
Article
  • Mar 2013
  • ORGAN SCI
We develop theory about how growing at work is an interpretive accomplishment in which individuals sense that they are making progressive self-change. Through a study of how employees interpret themselves as growing at three organizations, we develop a theoretical account of how employees draw from contextual and personal resources to interpret their growing in ways that embed their idiosyncratic experiences within an organization. The data suggest that employees develop three different types of growing self-construals: achieving, learning, and helping. We use our data to ground theory that explains the development of growing self-construals as deeply embedded in organizations. At the same time, we suggest that growing self-construals reflect individual agency through how individuals work with available resources to weave interpretations of themselves into their growing self-construals. We further suggest that growing self-construals influence the actions employees take to support a sense of progressive self-change.
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Environmental Uncertainty and Organizational Technology
Article
  • Feb 1982
Reports a study of 54 organizations, 30 of which were nonservice firms. The purpose of the study was to evaluate various aspects of environmental uncertainty and their impacts on innovativeness (new products and processes). In a recursive, causal path model of the nonservice sample of firms, it was found significantly (p<;0.05) that the impact of a global measure of perceived environmental uncertainty on firm innovativeness is mediated by an aggressive technology policy and, in turn, the presence of a special equipment evaluation group in the organization, for major process innovations only. For minor process innovations, this global perceived uncertainty promoted adoption directly, as expected, with no mediated effects. In addition, it was found that specific causes of perceived uncertainty (competition, customers, and government regulation) have little or no influence on adoption of major process innovation and act to impede adoption of minor process innovations.
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Dynamic Capabilities and Strategic Management
Article
  • Aug 1997
  • STRATEGIC MANAGE J
The dynamic capabilities framework analyzes the sources and methods of wealth creation and capture by private enterprise firms operating in environments of rapid technological change. The competitive advantage of firms is seen as resting on distinctive processes (ways of coordinating and combining), shaped by the firm's (specific) asset positions (such as the firm's portfolio of difftcult-to- trade knowledge assets and complementary assets), and the evolution path(s) it has aflopted or inherited. The importance of path dependencies is amplified where conditions of increasing retums exist. Whether and how a firm's competitive advantage is eroded depends on the stability of market demand, and the ease of replicability (expanding intemally) and imitatability (replication by competitors). If correct, the framework suggests that private wealth creation in regimes of rapid technological change depends in large measure on honing intemal technological, organizational, and managerial processes inside the firm. In short, identifying new opportunities and organizing effectively and efficiently to embrace them are generally more fundamental to private wealth creation than is strategizing, if by strategizing one means engaging in business conduct that keeps competitors off balance, raises rival's costs, and excludes new entrants. © 1997 by John Wiley & Sons, Ltd.
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Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance
Article
  • Dec 2007
  • STRATEGIC MANAGE J
This paper draws on the social and behavioral sciences in an endeavor to specify the nature and microfoundations of the capabilities necessary to sustain superior enterprise performance in an open economy with rapid innovation and globally dispersed sources of invention, innovation, and manufacturing capability. Dynamic capabilities enable business enterprises to create, deploy, and protect the intangible assets that support superior long- run business performance. The microfoundations of dynamic capabilities—the distinct skills, processes, procedures, organizational structures, decision rules, and disciplines—which undergird enterprise-level sensing, seizing, and reconfiguring capacities are difficult to develop and deploy. Enterprises with strong dynamic capabilities are intensely entrepreneurial. They not only adapt to business ecosystems, but also shape them through innovation and through collaboration with other enterprises, entities, and institutions. The framework advanced can help scholars understand the foundations of long-run enterprise success while helping managers delineate relevant strategic considerations and the priorities they must adopt to enhance enterprise performance and escape the zero profit tendency associated with operating in markets open to global competition. Copyright © 2007 John Wiley & Sons, Ltd.
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The Sources of Management Innovation: When Firms Introduce New Management Practices
Article
  • Dec 2009
  • J BUS RES
Management innovation is the introduction of management practices new to the firm and intended to enhance firm performance. Building on the organizational reference group literature, this article shows that management innovation is a consequence of a firm's internal context and of the external search for new knowledge. Furthermore the article demonstrates a trade-off between context and search, in that there is a negative effect on management innovation associated with their joint occurrence. Finally the article shows that management innovation is positively associated with firm performance in the form of subsequent productivity growth.
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Choice over Uncertainty and Ambiguity in Technical Problem Solving
Article
  • Jun 1993
  • J ENG TECHNOL MANAGE
Technical problems are solved under uncertainty and ambiguity. Most empirical research in technical problem solving has two characteristics in common: no differentiation between uncertainty and ambiguity is made, and the degree of uncertainty or ambiguity is considered exogeneous to the problem-solving process. This paper argues, first, that uncertainty and ambiguity are dissimilar concepts, thereby following ideas proposed by the recent literature. Problem solving under ambiguity involves fundamentally different tasks than problem solving under uncertainty. Consequently, different organizational structures are appropriate and different types of resources needed. Second, it is argued that levels of uncertainty and ambiguity are not exogenously given but are rather determined in the problem-framing process. In this process, problem solvers select explicitly or implicitly specific levels of uncertainty and ambiguity. This choice is contingent on context characteristics such as prior problem-solving experiences, organizational context, and available resources. It is proposed that the efficiency of the problem-solving process and the outcome of the process depends on the fit between the levels of uncertainty and ambiguity chosen and the context characteristics. Implications of the proposed framework for research on communication gatekeepers and on the role of top managers in technical change are discussed.
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