It’s a Must To Know VUCA

Since Asean Economic Community was launched in December 31 2015, one of the benefit is citizens of ASEAN get a huge opportunity for getting job in countries of South East Asia. This opportunity comes from the policy such as facilitating the free flow of skilled labor: the ASEAN Agreement on the Movement of Natural Persons (MNP) provides a legal framework to ease temporary cross-border movement of people engaged in the trade. Due to this policy, skilled labors are triggered to work in company which offers higher salary and competitive environment. The phenomenon of the free flow affects competitiveness of skilled labor market, either is national companies or multi-national companies.

Situation

VUCA stands for volatility, uncertainty, complexity, ambiguity firstly used by the United States military to discuss preparedness, the term was later popularized in the publications of Bob Johansen of the Institute for the Future.* Nick Petrie in Future Trends in Leadership

Volatile-change happens rapidly and on a large scale

Uncertain-the future cannot be predicted any precision

Complex-challenges are complicated by many factors and there are few single causes or solutions

Ambiguous-there is little clarity on what events mean and what effect that may have

The opportunity for getting job in a good company influences the labor skilled to move from one company to others in short time. As the result, the turnover rate, including in Indonesia increase. According to Mecer Talent Consulting & Information Solution, the turnover rate in all industry sectors in Indonesia is 8.4% and it tends to increase as linear as population growth. As we know, in 2021, Indonesia will get the benefit of the higher number of productive age, known as “bonus demografi”. This situation as same as happened in Japan, 1950. This is one of the key successes of Japan to be the development country, by optimizing their youth generation.

What Do Matters?

Demographic dividend can be both either an opportunity or a threat for the company. The company that realized will take some awareness of the demographic dividend and it surely changes corporate strategies. Because, even there will be a great of resources, the company will have to find a way to attract potential talents and maintain their interest. Talent availability and talent retention will be focused on corporate management, in order to prepare the war of talent. Furthermore, this condition is one of symptoms of VUCA world. VUCA is an acronym of volatility, uncertainty, complexity, and ambiguity which describes the condition of multipolar world. The VUCA environment means that company must focus on what is possible rather than on what is likely to occur. The presence of VUCA also leads companies to face lack of future leader which is the situation where leader or senior management in the company have not lots of choices of potential workers in company to be company leader in the future. Lack of future leader will impact on the whole company condition, because probability of potential leaders who stay and loyal to company is unpredictable.

This challenge is so critical to company survival. In addition, having a good leader may lead the organization deftly on making a greater decision making, high confidence, and ready adaptability in order to achieve a successful goal. In this era, challenge of leader on facing VUCA world increases as linear as level of company growth. In the last four years, from 2009 to 2014, the percentage of leader who believe they have a high quality of their organization enhance each of the year. In fact, there was downgrading level of readiness of future leader. At best only 15% in 2014, whereas in 2011 reached out 18%.

Less than two third of leader said that they are ready for being future leader and be capable of facing VUCA world. On the other hand, HR professional said that approximately a third of whom viewed their organization’s leader as not capable meeting the challenges of volatility (40 percent), uncertainty (32 percent), complexity (36 percent), and ambiguity (31 percent). Only 18 percent identified by HR of each their organization believes they have a high requirement on challenging VUCA world.

Root Causes in VUCA Matter

The acronym VUCA has gained traction as a way to describe today’s business world. It is so important that company can flex and adapt to VUCA world, and it requires new ways of thinking. To indicates what the pressing issues of VUCA world in which company must navigate, the fishbone analysis will be used. In this case, the head generally say as company should face VUCA world to survive in business, while the body tell why VUCA challenges is critical to the company to be success.

1. Human Capital is Impotant.

In the past few years, The Conference Board of CEOs, indicated human capital remains the top challenge for the leader of the company. There are two issues in the human capital that gain attention, i.e. War of the talent and Lack of Future Leader. We sum up it in the most two critical challenges for the leader that is poor leadership and poor human development.

2. A new way of technology changing.

VUCA world can be separated from the fast changing of technology. The uncertainty of technology drive leader to pay more attention in the digital conversation than before. Information age and digital transformation in economies, human capital, and other aspects opens up opportunities to be more efficient, while it also poses threats to established the business.

3. Increased regulation

The requirements of regulations is a perfect way to describes a complexity in VUCA worlds. Although the policy such as AEC has diminished the boundary line between countries in terms of economy, the company still have to meet some local regulations. The chalengge  of leading across countries is the leader have to faces different cultures and regulations of each country.

Proposed Solution

After analyzing the problem and data, the root cause of each problem symptoms are found. Nowadays, each of HR professional in company struggle to solve and figure the best alternatives on challenging VUCA world. Finding the best alternative would be difficult, but here are current methods that most applicable in company: training, job assignment, action learning, executive coaching, mentoring, and 360-degree feedback.

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