Managing VUCA with VUCA

Chapter 1

Introduction

VUCA is a concept that originated with students at the U.S. Army War College to describe the volatility, uncertainty, complexity, and ambiguity of the world after the Cold War. And now, the concept is gaining new relevance in characterizing the current environment and the leadership required to navigate it successfully. Rhenald Kasali in The Great Shifting (2018) wrote that one of the VUCA causes is disruptive innovation because of technological breakthroughs. Disruptive innovation is described as any situation in which an industry is shaken up and previously successful incumbents stumble. This Paper will explain how should we face the VUCA's dangerous challenge and turn it to be an opportunity.

Chapter 2

VUCA

According to (Horney, Pasmore, & O'Shea, 2010) the Term VUCA, coined by The USA Army War College, describes the dynamic nature of our world today and has caught on in a variety of organizational settings to describe a business environment characterized by:

· Volatility-The nature, speed, volume, magnitude, and dynamics of change

·  Uncertainty -The lack of predictability of issues and events

· Complexity-The confounding of issues and the chaos that surrounds any organization

· Ambiguity-The haziness of reality and the mixed meaning of conditions

The term VUCA was first stated in the following statement below:

“…a world order where the threats are both diffuse and uncertain, where conflict is inherent yet unpredictable, and where our capability to defend and promote our national interests may be restricted by material and personnel resource constraints. In short, an environment marked by volatility, uncertainty, complexity, and ambiguity (VUCA) (Magee, 1998).”

Today's business environment characterized by VUCA is due to changes made by humans themselves as the process of learning and thinking drives technological advances that then disrupt all aspects of human life from technological development. This technological breakthrough then encourages disruption in all aspects of life. This is usually called disruptive innovation. Disruptive innovation is described as any situation in which an industry is shaken up and previously successful incumbents stumble (Christensen, Raynor, & McDonald, 2015). Disruption itself is defined as an interruption to the regular flow or sequence of something (Christensen, Raynor, & McDonald, 2015). According to (Kasali, 2017), "The word disruption is becoming popular because it moves in line with the emergence and development of information technology applications and transforms ordinary forms of entrepreneurship into start-ups. The word shifts from the term that was coined after the world war, namely destruction introduced by Schumpeter."

We can identify some of the major changes that drive disruption as follow:

1. Technology: Technological advances in particular are driven by the advancement of several basic industries that drive technological advances in several fields.

- Advances in microchip technology and the internet are driving the development of Artificial Intelligence technology. Currently, technological advances have entered the third wave, namely the Internet of Things. (Kasali, 2017). With the support of the internet and artificial intelligence emerged smart devices, smart home, smart city, and smart shopping.

-Advances in information and communication technology have also given birth to changes to the digital world (digital media, digital economy driven by the increasingly strong e-commerce platform).

2. New Generation -millennials: Growing up along with technological advances was born a millennial generation that is very technologically literate and revolutionized cultural change in various fields.

3. Disruptive Leader. In line with the symptoms of a disruptive society, a disruptive leader emerges who with full awareness creates change and progress in new ways (Kasali, 2017). We can take some examples of young corporate leaders in Indonesia who have been born start-ups in Indonesia that are now unicorn start-ups (start-up companies with a valuation of their company value above 1 million US Dollars) such as Gojek-Nadiem Makarim, Traveloka-Ferry Unardi, Bukalapak-Muhammad Zaki, Tokopedia- William Tanuwijaya) and these companies have disrupted economic and social activities in Indonesia with their respective platforms developed. 

Chapter 3

Managing the VUCA World

The consistent and permanent change in the business environment characterized by VUCA is the driver of the shifting related caused by a disruption in all fields. The inability to deal with changes will erode the competitive advantage owned by anyone even though they are the market leader in the industries. When we are no longer relevant to the situation then the choice is to be eliminated. This applies to everything, individuals, institutions, or businesses. All can be eliminated because they are unable to compete in a fast-changing era.

Below are some examples of products or businesses that fall victim to VUCA because they are no longer relevant and end up being disrupted by change.  They have been disrupted by the changes that have taken place.

This case can happen to us as individuals. Individually we can be easily replaced by others or even replaced with artificial intelligence technology if we do not do self-disruption to then keep ourselves competitive and relevant. 

VUCA conditions are unavoidable and become an integral part of the industry or the environment (especially related to business or economic activities). Instead of thinking of it as a threat the company should anticipate it as a rarity of mitigation and get the opportunities and use it to our advantage.

In managing VUCA conditions, a framework is developed as a precautionary measure. This model is known as VUCA Prime. VUCA Prime is a behavioral leadership model, first introduced in 2007 by Robert Johansen (a distinguished fellow at the Institute for the Future), to counteract each of the four elements of VUCA with a specific positive response (Bartolomeo, 2019)

According to VUCA Prime the organization should do the following:

 1. Counter Volatility with Vision. Frequent and rapid changes that can cause anxiety, worry, and intimidation can be minimized if the organization has a clear goal or vision. All members of the organization understand the future to be achieved and the future it should be achieved. Everyone in the organization can respond to any change without fear and threat but strives to embrace that change while exploring the opportunities that arise from those changes.

 2.  Anticipate Uncertainty with Understanding. Uncertainty about current and future conditions that might make organizations hesitant in making decisions and making strategies can only be overcome by trying to eliminate that obscurity into something brightly lit. For example, the Company can analyze the business and competitive environment with competitive intelligence and market studies to find out the state of the market and potential competition, or strive to better engage with customers so that they can understand customer needs better. Companies are also required to always be updated with industry developments (by following news about the industry or joining a particular industry association)

3. Response Complexity with Clarity. Complexity has the potential to cause misunderstandings, miscoordination, invite conflict, and potentially reduce speed and flexibility at work or in making decisions. Clarity can be built by building clear communication within the organization, building team solidity, and encouraging collaborative efforts within the team. 

4. Anticipate Ambiguity with Agility, when the future contains multiple alternatives, be ready to adapt the approach to match the desired outcome. Organizational agility is simply achieved by adopting the practice of collaborating, delivering, reflecting, and improving against agreed metrics (Bartolomeo, 2019).

Kompas Media Group is an example of a company that I think is able to answer VUCA conditions with strategic measures. The strength of Their vision and agility in anticipating change make Kompas Group still exist. If in the ordinary calculations the presence of digital technology and the media revolution of course people think Kompas will quickly die. People no longer read a lot of printed daily, books are also getting digital.  But Compass with the power of his vision and the ability to read changes and flexibility Compass is able to survive. Kompas does not only depend on its core business, namely print media. Kompas Group in addition to having digital media, television also plays in the tourism industry (Santika Group) and plays in the manufacturing industry.

In the transportation industry. Disruption of the taxi operator industry occurs when online transportation develops with the support of digital technology advancements. With the birth of Gojek, Grab eroded Bluebird's success as a market leader in the taxi operator business. Vuca's condition did reduce the strength of the Bluebird. BlueBird has been slow to respond to changes. But then quickly improve and take a chance in a disrupted industry. Instead of competing head-to-head with the online transportation king, Bluebird leverages the power of Gojek's digital networks and applications to cement its position as a reliable and quality transportation partner. The two then collaborated. The birth of the Go Bird application in the Gojek application.

Bluebird understands very well that online transportation is inevitable. With the advancement of digital technology and unstoppable AI, digital-based transportation services are increasingly gaining relevance and answering the needs of the market. The choice to embrace change and get opportunities is the right step to take. Bluebird understands its vision, knows its market potential going forward, understands the nature of its business, and is agile in responding to conditions.

Chapter 4.

Conclusion

Change is an inevitability. VUC which identifies an environmental trait is a framework intended to make organizations or individuals more precise in responding to change. By solving some VUCA variables with VUCA Prime, you can find some anticipatory steps. To be a winner in every changing condition is to remain relevant to the changing environment. Change or die.

 

References

Bartolomeo, M. d. (2019, November 07). Axelos. Retrieved from https://www.axelos.com: https://www.axelos.com/resource-hub/blog/vuca-prime-the-answer-to-a-vuca-dynamic

Christensen, C. M., Raynor, M. E., & McDonald, R. (2015). What is Disruptive Innovation? Harvard Business Review December, 44-53.

Horney, N., Pasmore, B., & O'Shea, T. (2010). Leadership Agility: A Business Imperative for a Vuca World. People & Strategy Vol 33 issue 4, 32-38.

Kasali, R. (2017). Disruption edition 6. Jakarta: Gramedia Pustaka Utama.

Lawrence, K. (2013). Developing Leaders in a VUCA Environment. Retrieved from www.execdev.unc.edu: www.execdev.unc.edu

Magee, R. R. (1998). Strategic Leadership Primer. Carlisle Barracks. US Army War College.

 

 

Tricomponent Attitude Models (Case Study Walt Disney)

Chapter 1

Attitude

1.1 Definition

Originally, the term attitude derived from the Latin words for posture or physical position (Ikechukwu, Daubry, & Chijindu, 2012). An attitude is a mental and neural state of readiness, organized through experience, exerting a directive or dynamic influence upon the individual's response to all objects and situations with which it is related (Allport, 1935). An attitude in consumer behavior terms is defined as a general evaluation of a product or service formed over time (Solomon, 2018). An attitude can be a positive, negative, or mixed evaluation of an object expressed at some level of intensity. An attitude itself is an expression that is shown by an individual as the evaluation of the object that could be a favorable or unfavorable one. it involves a complex combination that is related to each other of evaluative beliefs, feelings, and tendencies toward certain actions. An attitude is defined as a learned predisposition to respond in a consistently favorable or unfavorable manner with respect to a given object (Fishbein & Aizen, 1975)

Attitude Characteristic

1. Attitude has an Object: An attitude has an object. We can like it or dislike it. Favored or disfavored for us, negative or positive for us. The object can be a thing (car, mobile phone, etc.), an idea (have a plan to spend holidays in Bali, etc.), a person (our friend, somebody, etc.), or a situation (Speaking in front of many people, become vegetarian, etc.)

2. Attitude is learned: an attitude is not existing since we were born. They are learned through our social interactions and our experiences. We are surely interacting with others, experience many things in our lives and from them we acquire information about things. We can say this is a learning process. As a result of learning then we form our negative or positive attitudes towards different things, there is a shift from no attitude to some attitude towards objects.

3. Attitude is predisposition: it is meaning a prior determined or learned view of a thing or tendency to act, this is the state of readiness to react to objects in a specific way towards a thing, we as an individual have a view which is already formed in our mind.

4. Attitudes are relatively stable phenomena: An attitude is lasting because it tends to endure over time (Solomon, 2018). The attitudes are not momentary feelings but a long-held view of something. The attitude of Indonesians who like Japanese cars such as Toyota (Innova, Avanza) tends to last a long time and does not necessarily then like cars made in China or Korea. Though attitudes can be changed from time to time it is a relatively stable phenomenon that persists for a period of time Chinese and Korean automakers must continue to communicate their products for a long and gradual period of time in Indonesia so their product will be accepted in Indonesia.

5. Attitude has an emotional component in addition to the rational side: Attitude has an emotional aspect of liking or disliking in relation to an object, which is often we cannot explain everything by reason for various reasons formed from individual learning experiences and processes.

Chapter 2

Tricomponent Attitude Models Explanation

towards People’s Attitude in Visiting the Disney World

In this chapter, we will review the tri-component of Attitude models toward People’s attitudes in visiting the Disney Word. As Mentioned in chapter 1, the components are Cognition, Affection, and Behavior.

The cognition component is what people know about Disney World. It is the people's knowledge and perception of Disney World. This is what people believe about Disney World. At this stage maybe they are (people) know that Disney is a world-famous resort consisting of theme parks (Magic Kingdom Park, Epcot, Disney’s Hollywood Studios, Disney’s Animal Kingdom Theme Park), two water Parks (Disney’s Typhoon Lagoon Water Parks, Disney’s Blizzard Beach Water Park), over 25 Resort hotel properties, and a variety of additional entertainment offerings (TripAdvisor, 2021). We all know that Disney World has been around for years and we’ve all grown up on it. A lot of things have been done by Disney in the entertainment industry. With everything Disney had done (including all the movies they have made), parents want to take their family to the most friendly entertainment and amusement place in the world for the family.

The affective component is what people or consumers feel about the product in this case Disney World. We can say that maybe all people, especially kids like Disney but we also must be aware there are also people who don’t like Disney. This is the emotional status of people about Disney World, which could be favorable or unfavorable. Like or dislike could be coming from their experience with Disney or just liking because they already know about Disney World and all the values and attributes shown by Disney to the people (world). If an individual has a favorable response or positive feelings about Disney ads might lead them to conclude that visiting this venue (Disney World) will be a positive, great experience, and bring pleasure.

A consumer’s emotions or feelings about a particular product or brand constitute the affective component of an attitude. A person’s positive feelings about Disney ads might lead him/her to conclude that visiting Disney World will be a positive, pleasant, and good experience.

From a Marketing perspective, this means knowing how the customers feel about their product/service. This is very important for the marketer, whether the communication had been built successfully fosters a positive feeling towards the product so that people will be interested and come to Disney.

The behavior/conative Component is the specific action or behavior of an individual toward Disney World. This is referring to the active individual takes towards the object (Disney), people go to Disney with their family, experience all the facility in Disney or just an intention to take action about it (Disney) for example we are decided to go Disney land with our family by the end of this month to celebrate 2022 new year.

The question then is, which one is come first of these three components in the Disney case? Knowing, feeling, or doing? Attitude researchers developed The Hierarchy of Effects to explain the relative impact of the three components Each hierarchy specifies that a fixed sequence of steps occurs on route to an attitude (Solomon, 2018). Below is the variative on how attitude is showed by individual related to the nature of buying complexity and the nature of product what they will buy:

1. High-Involvement Hierarchy: 

Think → Feel→ Do; Cognition →Affect → Behavior (CAB)

This approach assumes that an individual approaches the product decision as the problem-solving process, their beliefs of the product based on their accumulates knowledge regarding relevant attributes as the driver of the decision-making process continues on the evaluation process that forms the feeling of the product then finally decides to buy the product.  In the case of consumer behavior towards Disney World, this model confirms that consumers decide to visit Disney (and enjoy the holiday there) driven by their knowledge of Disney which forms the belief that Disney chooses entertainment venues that can meet the needs and desires of himself and his children then formed emotions/likes about Disney and decided to vacation to Disney. Individuals who go through this stage may decide to vacation to Disney is a high involvement decision (because it is not cheap to vacation to Disney, the cost of tickets, plane costs, vacation time, etc. so it needs to be thought about carefully).

2. Low-Involvement Hierarchy: 

Think → Do →Feel/ Cognition → Behavior → Affect (CBA)

This approach assumes that individual doesn’t have strong preferences for one brand over another, instead, individual acts on the basis of limited knowledge and forms an evaluation only after they have bought the product. The attitude is likely to come about through behavioral learning, the as good or bad experience reinforces their initial choice. They are more likely to respond to simple stimulus-response connections when they make a purchase decision. Consumers are not motivated to process a lot of complex, brand-related information. Instead, they will be swayed by principles of behavioral learning, such as the simple responses that conditioned brand names or point of purchase displays elicit. In this case, people jump to action after they know What Disney does, they don’t have a strong preference for one brand or other/alternative resort to spend the holiday. They Just respond to simple stimuli when they make decisions about going to Disney.

 

3. The Experiential Hierarchy: 

Feel → Do → Think / Affect → Behavior → Cognition (ABC)

This approach assumes that individuals act on the basis of their emotional reactions. According to this perspective, intangible product attributes (such as package design, advertising, brand name, and the nature of the setting in which the experience occurs, can help shape the attitude our attitude toward a brand.  According to this model, the motives and desires of the people going to Disney World are driven by their feeling or emotion about Disney World. The motivation for consumption is more driven by emotional aspects.

 Chapter 3

Conclusion

Attitude is not formed from a single factor. The three attribute factors of an attitude consist of Cognition, Affection, and Behavior. What drive the consumption or consumer is coming from these three elements and how those elements process and interact will differ in each person's background or motivation towards his or her object. Understanding marketers how that behavior is realized and working are critical to determining how a marketer determines an effective and efficient marketing communication strategy.

Creating more familiarity with target audience with Social Media : Instagram & YouTube etc. ( case study: Telkomsel)

 

The term “social media” refers to the wide range of internet-based and mobile services that allow users to participate in online exchanges, contribute user-created content, or join online communities (Dewing, 2012). According to (Kaplan & Haenlein, 2010) social media is “a group of Internet-based applications that build on the ideological and technological foundations of Web 2.0, which allows the creation and exchange of user-generated content. (Kaplan & Haenlein, 2010) take the definition of social media from Wikipedia "Social media are media for social interaction, using highly accessible and scalable communication techniques. Social media is the use of web-based and mobile technologies to turn communication into interactive dialogue. (Kaplan & Haenlein, 2010) also state that At FredCavazza.net (2011) divided the Social Media landscape into10 categories: 1. publish (Wikia); 2. share (YouTube); 3. discuss (skype); 4. social networks (Facebook, LinkedIn); 5. microblog (Twitter); 6. Lifestream (FriendFeed); 7. live cast (justin.tv); 8. virtual worlds (Second Life, HABBO); 9. social games (pogo) and 10. massively multiplayer online games (World of Warcraft, Happy Farm).

Advances in internet technology and high internet penetration in Indonesia encourage the massive use of social media in Indonesia. Based on (We Are Social & Hootsuite, 2021) internet usage rate is 73,7% of the population (202,6 Mio) and penetration of social media can be reflected in the high daily time spent on media, for Indonesian People, the average time spent is  3 hours and 14 minute/day.

High penetration and time spent on social media indicate that social media becomes a communication medium that is intentionally and massively used by the people of Indonesia. In Indonesia, the most widely used or commonly used social media are YouTube, WhatsApp, Instagram, and Facebook. This can be seen in the report of  (We Are Social & Hootsuite, 2021) as follow:

Social media's strength in conveying information and its effectiveness and efficiency as communication media is a real manifestation of the power that can be offered by new media that have digital, interactive, hypertextual, networked, virtual, and simulated characteristics. (Duncan, 2008) also identified the strong internet is Mass and addressable, can be personalized, extremely low cost, and can be interactive.

Social Media likes Instagram, YouTube, Facebook and others are representation of the new media platform with these six main characteristics of new media and considered as the effective and efficient media to leverage more familiarity of the product to target audience and it help build brand preference for the product. The reach of social media communication is very wide because it is easily accessible without the limitations of place and time, and at the same time can be personalized because of its interactive nature. 

Telkomsel case:

Social media can be one of the effective and efficient customer touch points for Telkomsel to increase brand awareness and build brand preference. The power of social media as an internet-based media that is very broad and easy to access without the limitations of time and place, making marketing communication in building brand awareness and building brand preferences is very reliable as long as it uses it with the right combination of strategy and integrative.

Telkomsel can convey marketing communication thru 3 media channels or customer touchpoints, such as Paid, Owned, and Earned (Belch & Belch, 2018) :

In Paid Media, Telkomsel can build and convey marketing communication to Social media Ads, while for owned media Telkomsel can develop websites, microsites, Facebook, Instagram, YouTube, etc.

Telkomsel also can utilize the spread of marketing communication in earned media thru maximizing Public relations activity or encouraging word-of-mouth which can be optimized by social media (social media mentions, comments, shared videos, pictures, online reviews, etc.). And word-of-mouth we know has a high impact on conveying the marketing message. It can be described in the model below: 

Word-of-Mouth is an unexpected touch point. Therefore, the impact is higher than other touch points. Research generally supports the claim that WOM is more influential on behavior than other marketer-controlled sources (Buttle, 1998). According to Sheth (1971), WOM was more important than advertising in raising awareness of innovation and in securing the decision to try the product. WOM has been shown to influence a variety of conditions: awareness, expectations, perceptions, attitudes, behavioral intentions, and behavior (Buttle, 1998). Currently, word of mouth medium is digitalized by social media. The message conveys thru internet media as the mouth.

References

Belch, G. E., & Belch, M. A. (2018). Advertising and Promotion. An Integrated Marketing Communications Perspective. 11 ed. . New York: McGraw Hill Education.

Buttle, F. A. (1998). Word of Mouth: Understanding and Managing Referral Marketing. JOURNAL OF STRATEGIC MARKETING 6, 241-254.

Duncan, T. (2008). Principle of Advertising & IMC 2nd Edition. Irwin: McGraw-Hill.

We Are Social & Hootsuite. (2021). Digital Indonesia 2021. We are Social & Hootsuite.