Manage business uncertainty

Endurance is a fundamental purpose of all companies. It is not surviving a specific critical situation; lasting is a matter of decades. Today we know that several crises will have to be overcome, that there will be periods of prosperity, and that we will also experience moments of uncertainty, in which the future will generate anguish.

Let's consider what we take with us from the 21st century; We began with a period of prosperity of about seven years, which was followed by a great crisis of another seven years. Then a period of prosperity continued for about five years, ending with a concatenated crisis (COVID-19, microcomponents, energy, inflation...).


The bonanza-crisis-bonanza chain continues without breaking continuity. A boom is followed by a crisis and vice versa. In the last 25 years we experienced the crisis from 2006 to 2008, and from 2009 to the end of 2011 a financial crisis; in 2020 the pandemic (COVID-19); and currently, mainly, the war in Ukraine and Israel and inflation.

Uncertainty in organizations is a constant product of the coexistence of multiple economic scenarios that intervene in the management of a company with an international presence, changes in political currents, and the various conjunctural moments that one country or another can experience simultaneously. All these factors cause uncertainty to grow and influence the operation of the business. The difference between a positive and negative influence lies in establishing a solid, long-term strategy.

In several countries in America, it is common for companies to find themselves in this type of situation, which can affect their stability and permanence over time, because, in most cases, senior executives are not accustomed or prepared to face contexts as changing as those we are experiencing today.

Finance experts affirm that managers can hardly manage uncertainty adequately if they are not able to relate current business actions with a future vision.

The most important thing that companies should do is try to foresee the multiplicity of scenarios that may arise since uncertainty always arises and becomes something real and tangible; but they should not stop there, since you must always have a long-term plan that responds to the particular needs of the moment.

According to Steve Ingham, global CEO of PageGroup, “Any strong organization should never have a short-term strategy, this ideally should not depend only on political contexts such as electoral elections; On the contrary, companies should have a long-term plan that responds to the objectives they want to achieve. What is important within an organization is to have a robust strategy over time, which allows it to achieve business success.”

When companies have the possibility of applying long-term strategies, political or economic uncertainty can be transformed. Its existence could even become an opportunity for managers to redesign their strategies, focus their resources on products that generate profitability, and strengthen their operations, focusing on their customers.

Incertidumbre empresarial RCC4

Causes of uncertainty in companies

Companies face new challenges every day that can bring them great benefits or disadvantages, depending on how they face them.

Some of the factors that can influence the appearance of these unforeseen events are:

Economic factors: Economic crises can plunge any business into bankruptcy. When the global economy or that of a specific country succumbs to a recession, it can have a great impact on organizations, forcing them to cut costs, lay off workers, etc.

Factors that involve public health: As we have already seen during 2020, the appearance of a pandemic like COVID-19 represents a before and after in life as we conceived it. Many companies have been affected by this problem, which has led to the closure of thousands of businesses around the world, a direct consequence of the paralysis of the global economy.

Cultural or social changes: Changes in consumer behavior require rapid adaptation to continue satisfying their needs. For example, a company that is dedicated to the manufacture of mobile phones will not be able to use old technologies that put it at a disadvantage in positioning compared to its competitors; it will need to evolve and adapt to be able to offer the consumer what they demand at all times.

Confident young businessman surrounded by sharks underwater

How to reduce business uncertainty?

Taking into account that uncertainty always occurs and that companies must have long-term strategies that respond to these contexts, keep these tips in mind:

Having psychological strength: resolving a situation of uncertainty not only depends on the training or studies that managers have but also on the attitude taken to resolve the labyrinth of causes and consequences. Although trying to understand what may happen is a high-stress situation, it is essential that motivation always remains intact and focused on the new change strategies that you want to achieve.

Make an effort to diagnose: it is essential to recognize the reason that generated the context of uncertainty and its possible consequences. Some companies may take too long to decide what to do, simply because they do not know how to identify the causes, being one of the worst scenarios in which poor management can occur.

Find the appropriate means: in a situation of high uncertainty there is always a diversity of options to emerge unscathed, however, it is essential to have high ethical criteria to make decisions, since the core of the organization and its reputation.

Remain firm in the decision: it is important not to lose focus on the action taken unless a considerably more appropriate alternative is found along the way, which is unlikely if the correct diagnosis was made and the alternatives to resolve the problem were well evaluated. problem.

Additionally, it is essential to periodically review the company's policies and guidelines and analyze regulatory and market trends, since these are the key inputs to make the correct decisions when ensuring the stability and growth of the organization.

VUCA environments

Bob Johansen, author of “Leaders Make the Future”, the VUCA environment must be managed, in contrast, from another VUCA:

  1. Address Volatility and the hyperconnection of variables with Future Vision.
  2. Face Uncertainty with Understanding, knowledge, understanding and empathy.
  3. In the face of Complexity, seek Clarity, simplicity, and simplicity in execution.
  4. Overcome Ambiguity with Agility. The ability to react to events is even more important than planning itself.

These characteristics of the environment generate great risks, but they also open the door to great opportunities, for different ways of doing things; In short, innovation in business models that, in turn, feed back into the complexity, ambiguity, and uncertainty of the environment. The factors of change are not exogenous to the environment; The change that it entails is truly endogenous, it is the result of innovation, above all, in business models.

“The illiterate of the 21st century will not be those who do not know how to read or write, but those who cannot learn, unlearn and relearn,” Alvin Toffler

Company managers must manage business uncertainty in the VUCA environment. It will be essential to test analytical skills and remain alert at all times to be prepared for the multiple changes that the future poses, which will increasingly be faster and more complex. greater frequency.

Success Story: Application of the VUCA Model in TechCorp

Context: TechCorp, a leading technology company is facing a highly volatile market with the emergence of new disruptive technologies, emerging competitors, regulatory changes and global economic fluctuations. Management is looking at how to maintain competitiveness and growth in this VUCA environment.

Volatility: TechCorp Response: Management fosters an environment of continuous innovation, where employees are encouraged to experiment with new ideas and technologies. Adaptability is a key competency in company culture.

Uncertainty: TechCorp Response: They deploy a business intelligence analysis team dedicated to tracking and forecasting emerging trends and potential threats. The company also invests in continuous training programs to keep staff up to date.

Complexity: TechCorp Response: The company has developed a clear mission and vision that guides all decisions and actions. A culture of interdepartmental collaboration is promoted and investment is made in communication technologies to keep everyone on the same page.

Ambiguity: TechCorp Response: Management strives to model resilience, making decisions based on the best information available at the time, even if it is not complete. Leaders practice authentic leadership, being clear about their values ​​and consistent in their behavior.

Result: By applying these VUCA strategies, TechCorp has managed to maintain a trajectory of growth and expansion, even amidst market turbulence. Management has transformed VUCA challenges into opportunities, taking the company to new levels of success, while fostering a culture of resilience, adaptability, collaboration, and innovation.