VUCA to BANI: instability as a new paradigm

playlist image — VUCA to BANI: instability as a new paradigm

The World Bank's latest annual report describes the year 2022 as one of "uncertainty", citing a "convergence of crises". Climate change, galloping inflation, disruption of supply chains, military conflicts... Worldwide, 733 million people continue to live without electricity. This figure is still expected to be 670 million by 2030 - 10 million more than the previous estimate.

What if this state of constant world instability and fragility were to become the new normal? Is instability stabilising? The old VUCA (Volatility, Uncertainty, Complexity, Ambiguity) model, long used to describe the volatility of economic markets, no longer seems to adequately describe the current situation. Fragile and often anxiety-provoking, the modern world has become BANI (Brittle, Anxious, Non-Linear, Incomprehensible) - and those stakeholders quickest to adapt will be rewarded.

Cascading and intertwined global crises
The United Nations' Sustainable Development Goal 7 calls for universal access to reliable, sustainable and modern energy services by 2030 . An ambitious target, to say the least, given the many upheavals shaking the world.

Electricity pylon

BANI vs. VUCA: How Leadership Works in the World of Tomorrow
October 24, 2022
How to use the BANI model for your business

The world is on the move. Nothing is the same anymore. The VUCA model, which describes our world today, has had its day. It is being replaced by a new model: BANI. What does BANI mean? And what are the differences to the VUCA world? Barbara Stöttinger, Dean of the WU Executive Academy, explains the BANI model and shows you how you can use it for your business.

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Barbara Stöttinger, Dean of the WU Executive Academy, explains the BANI model and shows you how you can use it for your business.</p>\n<p> </p>\n</section>\n<section class=\"ce-text\">\n<p> </p>\n<section class=\"ce-text\">\n<div id=\"c76797\">\n<h2><strong>The VUCA world of the 2000/2010s</strong></h2>\n<p><a href=\"https://executiveacademy.at/en/news/detail/a-vuca-world\">The VUCA model</a> is a framework for understanding and addressing the challenges of a volatile, uncertain, complex, and ambiguous world.</p>\n<div> </div>\n</div>\n</section>\n<div id=\"c76753\" class=\"module-contentblock\">\n<figure><img class=\"img-responsive\" title=\"VUCA - Volatility, Uncertainty, Complexity, Ambiguity. Photo © Nikkorlai Tapan\" src=\"https://executiveacademy.at/fileadmin_synced_assets/images/01Content/00NewsEvents/Filler-gross/VUCA-01_.gif\" alt=\"VUCA - Volatility, Uncertainty, Complexity, Ambiguity. 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Description

How to use the BANI model for your business

The world is on the move. Nothing is the same anymore. The VUCA model, which describes our world today, has had its day. It is being replaced by a new model: BANI. What does BANI mean? And what are the differences to the VUCA world? Barbara Stöttinger, Dean of the WU Executive Academy, explains the BANI model and shows you how you can use it for your business.

The VUCA world of the 2000/2010s

The VUCA model is a framework for understanding and addressing the challenges of a volatile, uncertain, complex, and ambiguous world.

VUCA - Volatility, Uncertainty, Complexity, Ambiguity. Photo © Nikkorlai Tapan

The term was first coined by the U.S. Army War College to describe the challenges of operating in a post-Cold War world. From there, the acronym made its way into management and leadership literature and business school lecture halls at the turn of the millennium. After a few years, the new explanatory model got a little "facelift" and was extended by one or two "Ds" by renowned international scientists due to changing framework conditions.

The VUCA framework is a leadership model that was developed in response to the globalization and digitalization of the business world. This leadership framework emphasizes the importance of having a clear vision, understanding the ever-changing landscape, being adaptable and responsive to change, engaging in thoughtful deliberation, and effectively communicating with stakeholders.

Thinking about a VUCA environment is a useful tool for developing leaders who are navigating the increasingly complex and interconnected business world. The acronym stands for:

Volatile

Many areas, such as markets, stock prices, business models, and customer requests, are governed by extreme fluctuations. Companies need to react to these volatile circumstances with ever-growing speed.

Uncertain

Long-term forecasts that enable predictability have become difficult in the VUCA world, leading to instability and uncertainty in both organizations and people.

Complex

The VUCA world is getting more complex because globalization and digitalization create more connections between completely different players in the market. It’s no longer about simple cause-and-effect mechanisms; everything is somehow tied together and is becoming increasingly non-transparent.

Ambiguous

In a complex world, it’s never simply black or white, or clearly yes or no. Anything can be viewed and interpreted in myriad ways. It has become impossible to detect causes or estimate effects clearly.

Diverse

Companies employ a wide range of people with different world views and upbringings, shaped by diverse origins, genders, and socialization experiences. Corporations can benefit from these differences, using them as opportunities that bring forth more creativity and innovation power.

Dynamic

Rapidly changing and dynamic markets create new challenges for companies, requiring them to become faster and more versatile. Away with the old hierarchies and silos – agile organization forms and work processes are all the rage.

The VUCA model can be used as a tool for companies and organizations to master the challenges of the modern world. It can also help leaders develop strategies for dealing with uncertainty, complexity, and ambiguity.

What if this state of constant world instability and fragility were to become the new normal? Is instability stabilising? The old VUCA (Volatility, Uncertainty, Complexity, Ambiguity) model, long used to describe the volatility of economic markets, no longer seems to adequately describe the current situation. Fragile and often anxiety-provoking, the modern world has become BANI (Brittle, Anxious, Non-Linear, Incomprehensible) - and those stakeholders quickest to adapt will be rewarded.

Cascading and intertwined global crises

The United Nations' Sustainable Development Goal 7 calls for universal access to reliable, sustainable and modern energy services by 2030 . An ambitious target, to say the least, given the many upheavals shaking the world.

Electricity pylon

An economic and social crisis

According to calculations by the International Monetary Fund, the prospect of a global recovery remained remote as we approached the end of 2023. The long-term effects of tighter monetary policies were beginning to show. Differences between different world regions were widening :

Description

The BANI model describes a new world in which the old values and rules no longer apply. In the VUCA concept, everything is volatile, uncertain, complex, and ambivalent.

The old acronyms used in the first twenty years of the 21st century can be put out to pasture if Jamais Cascio has his way. In his essay titled “Facing the Age of Chaos,” the American futurist described a new paradigm at the beginning of the COVID pandemic: an escalation of VUCA(DD), fit to match the reality of an increasingly chaotic world - BANI

Brittle

Brittleness is not just about volatility anymore, it is about a sudden and unforeseen shock to or even the destruction of a seemingly stable system, which may lead to a global ripple effect.

Anxious

With increasing brittleness, the world is also becoming more terrifying. This can lead to feelings of power- and helplessness, turning people rigid with fear. Anxiety can also be triggered by misinformation and fake news spread online.

Non-linear

In a non-linear world, the author writes, there is no more law of cause and effect – these things are either completely uncoupled or disproportionate. The most minor issues may have unfathomable and complex consequences – that might not be detected until much later. Thus, it becomes difficult to deduce causes.

Incomprehensible

The human mind is no longer able to grasp the complexity of information and occurrences in their entirety. Everything influences everything else on various levels.

The BANI model can be used as a tool for effective leadership within the challenges of the modern world, which is characterized by global warming, the pandemic, the consequences of war, and ambiguity. It can also support the leader's ability to develop strategies for dealing with uncertainty, complexity, and ambiguity.

Description

Both terms describe the challenges of operating in a rapidly changing world, but there are some important differences between them.

The VUCA concept has long been used to describe the volatility that has become the norm in the business world. However, the BANI model goes a step further and helps companies consider the chaotic and completely unpredictable impacts that can have a major impact on their operations. From Corona and climate change to inflation and armed conflict, companies must put more focus on to cope with completely unpredictable crises.

By understanding and planning for this new normal, companies can be better prepared when they occur. As the business world becomes more volatile, models like BANI will become increasingly important for managing companies that want to stay ahead of the curve.

The leadership behaviors that are most likely to lead to successful organizational change are those that promote exploration and learning, encourage risk-taking, and foster a climate of trust and openness to identify their weaknesses and create structures to address them.

Finally, the model provides a way of thinking about organizational development that is fundamentally different from the traditional linear model. As such, it provides a valuable tool for managing in a chaotic world.

Leadership Positions in the BANI World: are We at the Mercy of Chaos?

Barbara Stöttinger does not share this pessimistic view: “BANI can be answered by the skills that we call ‘pioneers’ qualities’ in our Senior Leadership Program. Successful leaders must face their own emotions and anxieties to prevail.” Stöttinger stresses that leadership styles for the future will need to combine courage and openness towards new things to deal with the adversities of the BANI world.

Barbara Stöttinger

Dean of the WU Executive Academy

Or, as Winston Churchill put it: “Fear is a reaction. Courage is a decision”. Authentic leadership, empathy, intuition, appreciation, and focus are just as important when it comes to management skills for the future.

And another essential factor for more resilience in BANI times, according to Barbara Stöttinger, is accepting responsibility. “This is essential for people in order to stop reacting and freezing with terror and, instead, show courage and get into the driver’s seat of their own (professional) life.

Management in the Bani world requires intervention where necessary. A woman stops wooden dominoes from falling over with her hand. — In times of Bani, it is important to take personal responsibility, not to remain rigid and to actively intervene when necessary. Photo © shutterstock - alphaspirit

Nobody can do this alone, though. In today’s business world, we need to pull together, create a fruitful exchange among the like-minded, and generate crowd intelligence. This is exactly why lifelong learning will play an even more vital role for effective leadership than before.