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3 The VUCA World
Both Danger and Opportunity

This chapter explores nasty challenges and intriguing opportunities of the VUCA world. The dangers are characterized by volatility, uncertainty, complexity, and ambiguity. But these same dangers create leadership opportunities that I describe in terms of vision, understanding, clarity, and agility.¹

Many people, including some leaders, are already beyond their own personal capability to cope. The pain can be intense. While nobody can predict the future, you can prepare. You can’t escape all pain, but you can prepare your mind to engage with painful dilemmas. With a prepared mind, the chances of success are much higher, and the pain is more manageable, at least partly because you are expecting it. As Louis Pasteur said, “Chance favors the prepared mind.”

The forecast you read in Chapter 2 is the darkest Ten-Year Forecast we’ve ever done at Institute for the Future in almost forty years of forecasting, but it is not without hope. Indeed, frightening forecasts can be motivating; they inspire new action so the dark forecast never happens. The great storyteller J. R .R. Tolkien made this observation about dark stories: “Now it is a strange thing, but things that are good to have and days that are good to spend are soon told about, and not much to listen to; while things that are uncomfortable, palpitating, and even gruesome, may make a good tale, and take a good deal of telling anyway.”² The same could be said about forecasting: uncomfortable forecasts are more engaging and perhaps more useful because they are more likely to inspire action.

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The VUCA world is all about change, including both dangerous ruptures and positive innovation. Inspiring strategies are hidden in the volatilities, uncertainties, complexities, and ambiguities that are highlighted on our Forecast Map inside the book jacket. Although the dangers are more apparent, there are many opportunities as well—even if they are below the surface. Leaders need to flip the VUCA forces, to comprehend the dangers but figure out a way to get there early and win anyway.

THE ROOTS OF VUCA

My own introduction to the term VUCA began the week before September 11, 2001, when I was part of a Deloitte senior leadership retreat at the U.S. Army War College in Carlisle, Pennsylvania. The Army War College is where rising-star military leaders learn how to be generals, where successful tactical leaders learn to be strategic. The students learn how complex government systems work, but they also grow what the army hopes will become personal social networks for the future—particularly connections with the growing number of students from other branches of the U.S. military and the militaries of other countries. The Army War College is a graduate school for life-and-death dilemmas. “VUCA University” focuses on leadership and strategy.

When I first arrived on the Army War College campus just days before 9/11, it felt like a sleepy liberal arts college that just happened to be focused on military matters. The campus is in a lovely historic setting. In the quiet dusk, I walked the cinder track where Olympic superstar Jim Thorpe had run, circling the field where Pop Warner coached during the time when the campus was home to an American Indian school. To the side of the grassy campus square, I found a small plaque commemorating the place where Confederate general and Army War College graduate Jeb Stuart burned down most of the Carlisle barracks on his roundabout way to Gettysburg. I saw an old tree that was said to be alive in the days of George Washington, when the campus was used for troop training. All was quiet and calm on the pastoral Army War College campus, without any apparent sense of danger. Security was light.

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Now, in the post-9/11 world, the Carlisle campus feels like an armed camp, with security everywhere. The Army War College is focused on the military and societal leadership dilemmas of the VUCA world.

I have been back to Carlisle frequently since 9/11 to lead and participate in seminars with business, nonprofit, and military leaders. Columbia Business School now works with the Army War College to organize these exchanges with a wide range of leaders from business, nonprofits, government, and the military. We focus on lessons for leadership and strategy and what we can learn from one another. The simple answer is, we can learn a lot.

I had very little experience with the military before I began these exchanges, and I had a rather negative view of it: I thought of it as hierarchical and out of touch. Now, having done many of these exchanges, I have come away with great respect for our military—especially for how they are learning how to learn. The army’s transformation began after Vietnam, which many think of as a failure in learning.

Unfortunately, it is almost impossible today to separate any discussion of the military from a discussion of the pros and cons of our government’s military policy, but that is what I am going to try to do. I’m not here to critique U.S. military policy. Rather, I want to draw lessons about learning that all of us might take away from the intense life-threatening realities of warfare today.

The story that follows introduces the challenges of living, learning, and teaching in the frightening world in which soldiers live. Think of this as a very human story about on-the-spot learning in a life-and-death situation, where no amount of conventional training would have been enough to anticipate what happened.

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Although the young officer faced a tactical challenge, this story introduces a strategic learning situation. How can organizations teach leaders to deal with dilemmas that cannot be anticipated? The leader in this story was ready in this life-threatening moment, and he reacted instinctively. How can leaders learn to sense what’s going on and come up with a successful response?

The VUCA Opportunity

The VUCA world is sparking new ways of thinking and acting—ways to deal with the original dark meaning. The most successful leadership strategy is to flip the danger, like an aikido move in martial arts where you absorb the attack but redirect the energy of the attack in a positive direction. The martial arts teach a relaxed awareness that allows for appropriate and proportionate response, whether that response is an attack, a retreat, or a clever way to manage the dilemma without resort to violence. Aikido practitioners speak of blending with an attack, flowing with its direction and gently spinning it off in a safe direction. The Foresight to Insight to Action Cycle provides a way of engaging with the VUCA dangers in search of opportunities. Such a turnaround is exactly what leaders must do in response to the dangers of today’s world.

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Consider microeconomics as practiced by Nobel Prize-winner Muhammad Yunus in Bangladesh:

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The VUCA world of poverty in Bangladesh is now being turned around with a combination of vision, understanding, clarity, and agility. The challenge is finding a way to engage honestly and create a winning strategy within the chaos that you encounter. Here are some emerging principles:

Volatility yields to Vision.Vision means having a clear intent, a clear direction for your actions. Vision is much more important than foresight, since vision seeks to create a future—not just study the future. With clear vision, creative space opens for innovation within the parameters that you specify. A bold vision sees beyond volatility, with a kind of calm perspective that is not trapped by the assumptions of the present. For example, Muhammad Yunus said in 1996, “One day our grandchildren will go to the museums to see what poverty was.”³ In a 2006 interview he declared, “58% of the poor who borrowed from Grameen Bank have now risen out of poverty. There are over 100 million people now involved with micro credit schemes. At that rate, we’ll halve poverty by 2015. We’ll create a poverty museum in 2030.”⁴ That’s vision, and it is important to note that he didn’t begin with this vision: it emerged as he learned in the field. Now, while most people assume a continuing gap between the rich and the poor, Yunus is engaging with that gap and working on practical ways to overcome it. In doing so, he motivates not only his own organization but also many others. That motivation will be amplified by his winning of the Nobel Peace Prize.

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Uncertainty yields to Understanding. In the face of uncertainty, listening and understanding can help leaders discover new ways of thinking and acting. Listening leads to understanding, which is the basis for trust. In order to understand, you must learn to listen carefully without judging too soon. The VUCA world creates an urgency to act quickly, but sometimes it is a false sense of urgency. The best leaders have the presence and calm to listen before talking, to open an opportunity for deep understanding. Understanding is a prerequisite to trust, and trust is vital to building community. The Grameen Bank is based on trust, with a reliance on local social networks. Traditional approaches to banking often begin with an assumption of mistrust and create systems of financial collateral to protect themselves against risk. Authentic gestures of trust can be extremely constructive, as Yunus has shown. His response was one of understanding: he went into the villages and listened to poor people—and he asked many questions. He began by loaning $27 to a group of forty-two people. He gained their trust, and in turn they trusted the new system. His understanding and consequent credit strategy became the groundwork for the Grameen Bank and what has now become a worldwide network of microfinance innovation.

Complexity yields to Clarity. Leaders must help others make sense out of complexity. The VUCA world rewards clarity because people are so confused that they grasp at anything that helps them make sense out of the chaos. At times, clarity will be rewarded, even when it turns out to be wrong. Clarity is good, and we should strive for it, but not at the expense of truth. The thoughtful leader’s quest is to be both clear and accurate, simple but not simplistic. Clarity is usually possible, even when there is no control. Muhammad Yunus realized that traditional banking methods didn’t work amid the immense complexity of poverty. Simplistic solutions did not work. Yunus sorted through the complexity and came up with a clear strategy: peer pressure that encouraged them to repay the loans and grow their own communities, and a focus on loans to women, because they tend to benefit the whole family more than do loans to men. The benefits of microfinance are personal, practical, and clear.

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Ambiguity yields to Agility. In an ambiguous world, leaders must be ready for surprises. Leaders can’t surrender to ambiguity—that would lead to paralysis and confusion. Rather, leaders must learn how to be agile and responsive to attack. The VUCA world rewards networks because they are agile, while it punishes the rigidity and brittleness of hierarchies. Yunus learned that the hierarchical structures of traditional banking would not work in the developing world. His approach to microfinance is networked and flexible, lightweight, and replicable. Micro-finance models have now multiplied across countries, cultures, and circumstances with remarkable agility.

We all have our personal VUCA moments, when our own life becomes volatile, uncertain, complex, and ambiguous. Personal crises hit everyone at some point. In these moments, we are challenged to respond. Absorbing a crisis like losing a child is jarring for anyone, but the most positive response is to engage with the crisis and figure out something— anything—you can do to rechannel that negative energy. The most dramatic example of this rechanneling that I ever saw was provided by the Biehl family from my hometown of Geneva, Illinois. Amy Biehl was a Stanford student who went to South Africa to work with poor people but was killed by an angry mob of the same people she was there to help. Her parents, while still grief stricken, envisioned and worked personally to create the Amy Biehl Foundation to carry on the work of their fallen daughter. In an amazing act of forgiveness, they actually met and worked with her killers to create this amazing turnaround.

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The VUCA world is all around us, with more or less intensity. Those of us in the less intense environments can learn from those in the more extreme ones. Here are some examples that show how vision, understanding, clarity, and agility are proving successful for leaders in a variety of different organizations.

Examples of Positive Response to the VUCA World

Strategic Intent. The military response to the VUCA world relies heavily on “commander’s intent,” sometimes called “strategic intent” (which I prefer), as a way of managing the dilemmas. Strategic intent is a clear, compelling, and concise statement that includes the following:

• Purpose: What do you want to accomplish? How is this purpose related to the larger mission or enterprise?
• Method or task: What needs to be done?
• End state: What ends are we pursuing?

Strategic intent, with decentralized authority to execute and innovate within the boundaries of that intent, provides a practical way to engage with chaotic situations. A strategic intent should cascade across levels in the hierarchy (at least two levels down) and across organizational boundaries to provide a consistent direction and message. A strategic intent statement can be a bridge from the most senior officer to the onthe-ground leader who engages personally with those who must bring the intention to life in a practical way.

At its best, the military’s strategic intent provides consistency without dogma. A strategic intent makes it more likely that a mission can be accomplished—even if the leader is killed or even in the absence of communications. At its best, strategic intent facilitates agile response to unanticipated events through a consistent take-charge mentality within the framework of the intent. In the military, there is little room to question strategic intent but great flexibility with regard to how that intent is carried out.

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Of course, it is not just the army that is experiencing this shift toward asymmetrical warfare on the physical and virtual battlefield. John Arquilla, who is professor of defense analysis at the Naval Postgraduate School in Monterey, has become the leading voice exploring the emergent realities of “net warfare,” in which the great wars are between “nations and networks.”⁵ The world of asymmetrical warfare is obviously different from the worlds of business and nongovernmental organizations (NGOs), but there are important similarities. Competition in business is becoming more asymmetrical. For most companies, their competitors are also collaborators in some arenas. The competitors of today are not likely to be the most important competitors tomorrow.

In this world, nobody is really in control. For people who are experiencing more chaos than they can absorb, who are outside their comfort zone, clarity looks like relief, and the need for relief feels urgent. But clarity is hard to find in this world, and control is often impossible. Clarity is good, but not if it is simplistic, not if the clarity is obscured when it comes to important aspects of the truth. The young commander in the story above understood his commander’s intent, which was to make friends with the local religious leaders. He improvised his way out of a very difficult situation while still holding to that intent.

The Army War College teaches leaders that strategy is hard work and that it demands critical thinking—a mix of clarity and complexity. With strategic intent, the vision is clear. The challenge is to develop the agility to respond to the chaotic world within which the intent must be pursued.

Health in a VUCA world. The threats to health are everywhere, from global pandemics to the products we use in our homes. Health has become a filter for purchase of a wide range of products and services, beyond just response to disease. Now, health criteria are important for food products, beauty products, cleaning products, and even products to ensure healthy housing, air, and water.

The Centers for Disease Control and Prevention (CDC), based in Atlanta, is focusing its strategy on global health and safety—but health is what everyone is most concerned about. The CDC has also recognized that, even though it is a U.S. government agency, health is a global challenge. Pandemics are a concern because the world is interconnected in many ways, including the spread of infectious diseases. The dilemma for the CDC, and for us all as a global society, is how to be responsive to treating and preventing disease while creating more effective approaches to long-term health. The vision for the CDC is long-term health. The CDC is attempting to raise the health aspirations of Americans, encouraging us to focus on healthy living within the context of radical uncertainty.

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Meanwhile, the CDC is also the center for emergency health response. Its new Emergency Command Center in Atlanta has sixty-six workstations, sixteen large-screen displays, and fourteen team rooms circling the Command Center. The CDC is better prepared than ever for global health emergencies, even though it is placing its emphasis on heading off the crises before they occur. The new Command Center was developed with corporate support through the CDC Foundation, a creative organizational structure that allows the CDC to mount new initiatives with business without going through the normal governmental procedures that are just too slow be able to respond to global health emergencies.

On 9/11, the CDC had only crude emergency response facilities that it set up in a temporary conference room. In the six years since 9/11, the CDC has responded to twenty-five health emergencies with “command center” activities, which led them to create the more permanent— and much more advanced—Emergency Command Center. Using simulation gaming, it now practices to develop its agility in responding to the next health crises, which are uncertain in nature but certain to come.

The following are the CDC’s strategic imperatives, all of which address various facets of the chaotic world around us:

• Health Impact Focus: Align CDC’s people, strategies, goals, investments, and performance to maximize impact on people’s health and safety. (Alignment in this case is a kind of strategic intent about overall direction and purpose.)
• Customercentricity: Market what people want and need to choose health. (The CDC is increasingly market sensitive and market savvy.)
• Public Health Research: Create and disseminate the knowledge and innovations people need to protect their health now and in the future. (Networks are used heavily within the CDC to spread news about innovations and prepare for rapid responses to emergencies.)
• Leadership: Leverage CDC’s unique expertise, partnerships, and networks to improve the health system. (This imperative links back to clarity and intent, as well as to the CDC’s increasingly wide circle of network connections beyond government.)
• Global Health Impact: Extend CDC’s knowledge and tools to promote health protection around the world. (Health concerns, no matter how locally defined, are increasingly global. Health issues bleed across national boundaries.)
• Accountability: Sustain people’s trust and confidence by making the most efficient and effective use of their investment in CDC. (The CDC has an incredible public relations challenge, to engage with diverse people and organizations all around the world.)

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Notice how these imperatives bridge the goals of both creating a sustainable health culture and responding to global health crises.

Whereas health care (that is, disease response) used to dominate, the CDC is now making a major strategic push around healthy choice making. Although it is still very interested in the health care system, it is taking a growing interest in health behaviors that are more basic and more likely to have lasting impacts.

In order to hone its own readiness, the CDC executive leadership team uses a set of global scenarios against which each of these strategies has been tested. How might each strategy do in a range of possible future worlds? Readiness exercises like these prepare the leaders of the CDC for the dilemmas that they face, but they also allow them to periodically reevaluate their strategies and the tactics they are using to bring them to life.

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Public Education for a VUCA World. Although every other major institution has gone through radical changes in the past few generations, public schools are changing more slowly—except for the core of amazing teachers who bring life and hope to the classrooms. It is almost as though the public school administrators were hoping the VUCA world was not really there, even though any teacher or student could tell you it feels chaotic already inside many schools.

The KnowledgeWorks Foundation (KWF) is an operational foundation based in Cincinnati that has a focus on improving education for disadvantaged kids. IFTF does an annual forecast for KWF on external future forces likely to affect education and learning, thinking ten years ahead. Our goal is to identify high-impact zones in which investments by KWF are likely to have major impacts on improving education for disadvantaged kids.

One of the dilemmas we identified is the tension between the marketplace for increasingly personalized learning and the social mandate of the public schools to provide foundational education to everyone— regardless of background or income. New media, especially interactive media, are introducing new ways to engage with students and new opportunities for learning—but access varies depending mostly on ability to pay. Public education is funded mostly from public sources, but new media learning resources tend to be marketplace driven. What is the role of public education in a marketplace-driven learning environment?

Other directions of change in the world of education, each of which introduces dilemmas that challenge educational policy makers, are highlighted below:

• VUCA Community Schools. Increasingly, schools need to be safe zones, centers for hope and positive expectations. Tension is greatest in urban communities, with extreme conditions of wealth and poverty, uncharted social challenges with increasing diver- sity, and few shared norms to guide constructive change. A school can be a healthy life advocate, playing a core role in communities in dealing with problems such as youth obesity. Community schools can provide a vision for dealing with the volatility of most communities. To be successful, this vision must be understood and shared widely.

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• The Learning Economy. The trend is from reliance on a dominant system of public schools toward a diverse marketplace for learning and from one-way classroom-style learning to multiple ways that are personalized to the needs of the learner. Think of this as a grassroots economy for learning, a direction that is likely to be a challenge to the centralized methods of the public schools.
• Realignment of the Learning Professions. The learning professions, such as teaching, are moving toward becoming agents for formal and informal learning, from “sage on the stage” to “guide by your side.” Teachers unions are major players as the incumbent learning agents and can be a source for innovation or an impediment to constructive change.
• Pervasive Learning Ecologies. The trend is toward anytime, anyplace learning, with a blending of the virtual and the physical. Schools need to help frame conversations about learning within a community, with an emphasis on providing opportunities for disadvantaged kids. Youth, even poor youth, are growing up with media all around them. These digital natives have the media savvy to learn in new ways if teachers can learn to use the media that the kids already know how to use.
• Deep Personalization. The trend is toward customization for everyone, with experiential lifelong learning. Empowered learners with smart networking skills are developing new ways to learn. Listening, understanding, and trust are required to deliver authentic personalization.

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The VUCA world is creating dilemmas of learning for disadvantaged kids that can’t be solved with either-or thinking. New strategies are required that go beyond problem solving. The education and learning hot zones summarized above present new challenges, but they also highlight new opportunities for change in how kids learn and how teachers teach. Public schools could be an important part of the learning economy, but the challenges for them are extreme.

Science in a VUCA World. Science issues fuel confusion, but science can also help us understand the volatility, uncertainty, complexity, and ambiguity around us. The changes underway in science and technology are vivid and evident to anyone who is paying attention. From stem cells to biotech to global warming, it seems that there is a science and technology story in the newspapers every day, and most of the stories concern both hopes and fears.

IFTF did a study for the government of the United Kingdom that synthesized forecasts of science and technology, thinking out ten, twenty, and fifty years ahead. This was an independent outside look, to provide input to science policy makers in the United Kingdom. In this project, we did a series of expert panels and drew together forecasts from around the world. We created an online exchange among experts as a way of synthesizing the forecasts as the project unfolded.

The workshops we did with scientists, policy makers, and thought leaders made apparent a core dilemma: science and technology developments always happen in some social context. Science and technology don’t create the future, but they do enable and amplify it. Technology forecasters must take stock of the social climate within which the technology is developing. In effect, every technology forecast must be a social forecast, or at least it must contain social assumptions. Here are the six core science and technology drivers identified by the IFTF study, with a note regarding the societal issues each will raise:

• Small world, with sensors everywhere, meaning that the geoweb discussed in Chapter 2 will become practical on a very large scale. Anytime, anyplace sensing will play out in a world that is worried about both safety (from terrorism and many other threats) and the privacy of individuals.
• Intentional biology, with new possibilities to guide human life at the molecular level. Such abilities raise great possibilities for use and misuse, with very different views of what may constitute misuse. The world of intentional biology is loaded with the possibilities for unintended consequences.
• Extended self, with new possibilities to extend the human body, the mind, and the senses. Again, social norms and values will shape what is accepted as part of the range of human diversity and what is out of bounds.
• Mathematical world, with new capabilities to visualize very complex patterns in comprehensible ways. Big-picture patterns become more visible in this world, but these patterns may not match the assumptions or beliefs of some groups within society.
• Sensory transformation, with new abilities to sense and process what is sensed. Simulation will become more practical as a learning medium in this world, which will introduce new ways to develop disciplines of readiness.
• Light infrastructure, with a move from centralized grids to flexible smaller-scale infrastructure. Energy conservation and sustainability could improve in profound ways using light infrastructure. Societal attitudes toward sustainability could reach a tipping point over the next decade, with more practical and affordable ways to be environmentally sound.

Technology and science have major impacts on society, but society shapes the kinds of technology applications that actually come to the marketplace. Society can slow down or speed up a core technology evolutionary path, not to mention bending that path in significant ways. In California, for example, a public initiative was passed to support stem cell research. A coalition of conservative groups, however, brought a lawsuit against stem cell research that kept the initiative from being implemented for several years. Eventually, the public initiative was translated into active programs, but these NGOs delayed the start and shaped what actually happened.

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Both science and technology present many problems that can be solved, but they also present many dilemmas that are much more profound, and it is the dilemmas that become clear when you look ten, twenty, and fifty years ahead. The future world is a high-tech world, with deep roots in science but also a with long roots to the past, and many of these roots are resistant to change from both science and technology.

Leisure in a VUCA World. Ocean cruises and theme parks are examples of what Joe Pine and Jim Gilmore call the “experience economy,” in which the experience is the product and service. Pine and Gilmore talk about the overall economic shift from products to services to experiences to transformations.⁶ Leisure is still important, but it will play out in a world that is increasingly concerned about safety.

Cruise ships can provide authentic experiences that lead to personal transformations. For example, a cruise offers a family quality time alone for the parents, amazing activities for the kids, and family time for meals and other group activities—in the comfortable world of a cruise ship— which nowadays is very comfortable indeed. Cruse ships go to interesting places while traveling in a contained, comfortable, and safe environment.

In recent years, however, the VUCA world has broken into the comfortable world of cruising. Higher fuel prices are an obvious pressure for the cruise lines. More questions are being raised about the environmental effects of these giant ships, even though the newest ships have greatly reduced their negative environmental impacts. In fact, the water treatment and recycling capabilities on modern ships are impressive indeed, and the fuel used by a cruise ship is far less than that if all the guests took individual automobile trips. Still, cruise ships look environmentally suspect.

The cruise lines are sailing conspicuously between the developed and the developing worlds, moving back and forth across the gap between rich and poor in giant-size vessels that embody and advertise wealth. Imagine a luxury cruise liner pulling into a harbor in the developing world. (I have never seen a humble-looking cruise ship.) People (most of them poor) on shore rush out to see the fantastic ship towering over the sea. The first glance from shore is a vision of incredible extravagance, embodying a luxury experience that the local folks could never afford or possibly even imagine. When they go ashore, the advantaged passengers come face-to-face with the disadvantaged residents. Many types of encounters are possible.

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Cruise companies are working to be perceived by guests and by local ports as both international and supportive of local development. Their international side calls for them to offer travel opportunities to attractive spots around the world. In addition, cruise companies want to draw passengers who might be based in very different parts of the world. Their local challenge is to figure out how to engage in positive ways with each port of call so that cruise ships are seen as welcome guests at each stop. Some cruise companies arrange for local contributions of food, money, or time by their guests when the ships visit foreign ports. By working with local NGOs or government groups, cruise ships have the opportunity to design positive experiences for their guests while also contributing to the local communities that they visit. Cruise companies want respect and support from both sides of the rich-poor gap.

The cruise companies’ dilemma is figuring out how to facilitate positive guest experiences while maintaining good relations with the areas where the ships visit. Cruise companies must balance competing needs, wants, and perceptions in order to create both positive business models and a positive brand reputation with regard to environmental and social impacts. They offer safe adventures with many options on board that range from rock climbing to surfing to personal growth experiences, but they also face new challenges as they cruise the VUCA world.

Theme parks are similar in some ways to cruise ships, but they exist in a more self-contained world. In an anxiety-laden world, safety is a priority—particularly for parents. For kids, however, adrenalin rushes are highly valued, and they want the rush at an earlier age than ever be- fore—probably because of the vivid media experiences with which they now grow up. Can kids be scared safely?

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Walt Disney World in Orlando, for example, is one of the safest places in the world. It feels very safe to parents, but it also provides exciting experiences for their kids. The dilemma is to provide both experiences authentically: safety that reassures the parents and thrilling experiences for the kids. It is getting harder and harder for theme parks to win in the throes of this dilemma.

Theme parks provide the potential for transformative experiences. Within the context of a theme park, transformative entertainment can go beyond traditional products and services. Disneyland and Walt Disney World, for example, provide rides and attractions that are an amazing mix of theater and thrill. Where other theme parks emphasize brute force thrill and adrenalin rush by shock, Disney does it with artistic and theatrical flair. The parents and grandparents are likely to understand and appreciate this difference, but it is a challenge to reach the kids— who are coming to theme parks with much richer experiences and expectations than the kids of the past (who are now the young parents). Parents will continue to have safety concerns, however, and the fears are likely to get worse, not better. The safely scared dilemma will be increasingly difficult to manage.

The Outrage Industry. Out of all the companies with which I have worked, Target is the only one for which a community relations person has been present at every workshop I have done—across the company. Target’s relationships with its local communities are a visible part of its corporate strategy. Target stores are in local communities, and the corporation makes a noble attempt to be active local contributors. Five percent of Target’s profits are dedicated to the local communities they serve.

Just as it is difficult for large corporations to develop intimate relationships with individual customers, it is difficult for a large corporation to engage with many different local communities. Even within a single community where a single Target store is located, there are many different kinds of people and many different views on most issues. Target is very community minded, but the communities it serves are extremely diverse. It is difficult if not impossible to please all community members. Target’s community commitment gets played out in the real world of communities in which people do not always agree on what is appropriate.

For example, Target team members (Target employees) are trained to be inclusive and situational in dealing with their local communities, to honor whatever cultural values and traditions are appropriate for a particular guest. Team members offer greetings in the stores appropriate to “the holidays,” not just Christmas, although they are also taught to be situational. If a guest says that she is buying a Christmas present for her mother, for example, Target advises its team members that it is appropriate to say “Merry Christmas” to the guest when she is leaving.

Target’s flexible and situational holiday language, however, was perceived by a portion of the Christian community as an affront to their beliefs. During the 2005 holiday season, Fox News reported that Target had instituted a policy against “Merry Christmas” greetings at their stores. From what I could gather by talking with Target people, Target had no new policy. Rather, Target was making an ongoing effort to be inclusive of the diverse people in the local communities where their stores are located. The Fox News challenge, however, was polarizing, and it implied that a new policy was in effect: Target was accused of killing “Merry Christmas” and telling its employees to replace it with “Happy Holidays.” For Fox News, it was an engaging story of the controversial sort that it seems to love—even though the story was not true, as best as I could tell.

Target was forced to engage with a range of diverse community groups on an issue on which it was impossible for everyone to agree. There was no single greeting that would please everyone in all of Target’s local communities. Not surprisingly, some community voices were louder than others. I spoke with Target employees who fielded some of the calls in response to this story. Some impassioned Christian callers were outraged and did not want to hear Target’s side of this story. The Target representatives listened and tried to put the Fox story in context.

Target’s organizational dilemma is about how to keep its strategic commitment to communities while also engaging positively with the very different parts of each community where Target has a store—some parts of which will never agree with one another.

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This story is an example of what is starting to be called the “outrage industry,” referring to news or entertainment personalities who focus on stimulating outrage—with no particular purpose in mind other than stirring things up. In other words, the outrage industry practitioners are not advocates of a better way; they just want to stimulate outrage. Indeed, Fox News has made a very successful business out of stimulating outrage. People love a colorful story, even if it is not true. Outrage can come from the right or from the left, but the result is increased amplification of stories and anecdotes that contain both information and misinformation, to which retailers and others must respond.

Chapter 2 and the Forecast Map talked about the driving force of extreme polarization. The outrage industry is an artifact of the VUCA world, which fuels polarization. Many of the people with strong opinions are sincerely interested in a particular kind of change, but their voices become mixed easily with those from the outrage industry who are churning stories. Being on the receiving end in this world of dilemma by innuendo is usually a no-win game, yet many corporations have to play the game. As one executive said to me, “We often have a choice, when confronted with accusations like this, of looking stupid or looking evil. When I’m faced with this choice, I always choose looking stupid. It is easier to recover from looking stupid than it is from looking evil.”

Insuring against loss in a VUCA World. What is insurance in a VUCA world? It seems like an overpromise to sell insurance in a world that has fewer and fewer guarantees. Insurance has traditionally meant indemnification of loss if something bad happens. Indemnification is still possible, but nothing can be truly insured. Readiness is a much more believable and more useful promise, a stance that prepares people for possible loss without overpromising with assurances that nobody can really provide with any degree of certainty.

One example of this readiness is the geoweb and the world of sensors, described on the Forecast Map inside the book jacket and in Chapter 2, that provides, for example, new resources for home monitoring of water leaks, fires, or other risks that homeowners take. These kinds of ambient intelligence are becoming possible, where what used to be static objects can be transformed into aware surroundings as digital technology becomes embedded in physical objects that are part of our daily lives. Using sensors, pattern recognition, and user profiles, new services can monitor and respond as needed. Today’s household alarm systems only hint at what will be possible as geoweb technology advances and as services are introduced to take advantage of these new readiness technologies.

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State Farm Insurance, for example, is moving toward readiness in its services, while still providing indemnification along the way. The company helps homeowners assess their risk and develop their own readiness strategies. There is a basic shift underway in the insurance industry as consumers realize and accept that nobody can really “insure” that bad things won’t happen. This was always true, but it is even truer now. Rather than assurances that may be unrealistic anyway, we must all prepare for and take risks that we choose to take—with a good understanding of the tradeoffs and the readiness procedures that are appropriate. Indeed, the insurance industry is gradually evolving toward a focus on risk, risk transfer, risk advice, and readiness services. Although most businesses hate risk, the VUCA world is fueling a crop of companies that thrive on it.

I did a series of workshops in London, and beforehand the meeting organizer presented an evacuation plan in the event of an emergency. I did a meeting in Geneva, Switzerland, after that, and an executive from London kicked off the meeting. He asked if an emergency briefing was required in Geneva and, before getting an answer, said, “I’m going to do an emergency briefing anyway, since it’s the right thing to do.” In Jerusalem, such routine readiness preparation is even more evident than it is in London. In the United States, however, most people still pretend that we will solve the “terrorist problem” and someday return to normal. The VUCA world is here to stay; it is the new normal.

This world is riddled with safety and personal risk dilemmas. People want to be better prepared, more ready for the uncertainties we are all facing. We are all becoming more conscious of these risks and more open to services that help us prepare. We all want assurances, and we’d love to have our safety insured, but nobody can do that. The dilemma for insurance companies is to figure out how they can continue to offer indemnification as appropriate while also beginning to offer new services that encourage people to be more prepared for and able to deal with a world where nothing can really be insured.

Networks of empowered people will want to be better prepared, more ready for the uncertainty that we are all facing. Smart networking will make it much easier to share these practices, some of which will be shared in an open-source way and some of which will be provided as services by insurance companies and other risk advisers. Interest and advocacy groups, including those with extreme views, are likely to have major impacts on the emerging field of readiness technology and services. Insurance companies do not have a great reputation in many parts of the world, so they will have reputation management challenges. If traditional insurance companies cannot respond to this emerging market demand, new players and new services will arise in their place.

The VUCA world is affecting all aspects of life, as the cases above suggest, and the responses are becoming increasingly interesting. Each response illustrates an open-ended learn-as-you-go style of learning that moves beyond traditional problem-solving styles of leadership.