Question

Planning for success in the new VUCA business world

Today we live in a constant period of uncertainty , fuelled by factors such as globalisation ,worldwide economic challenges and climate change, to name but a few. Many organisations and indeed, managers, are struggling to stay afloat and aligned in what is increasingly being referred to as the VUCA nature of today’s global business environment. Coined in the early 2000’s, this military-derived acronym stands for Volatility, Uncertainty, Complexity, And Ambiguity – terms that reflect our increasingly unstable and rapidly changing business world.

The “turbulence” this creates is ever present as we go about our daily jobs, tipping us this way and that as we attempt to navigate a safe passage and make important business decisions. Constant and evolving influences are putting pressure on decision-makers to act in much shorter timescales that most leaders would like. The ”interconnectedness” of business, driven by globalisation , means that something happening in one part of the world can have an immediate impact on organisations elsewhere, An event occurring in one country is instantly reported around the world and stories are accessible via the internet almost in real time. The net result is that there is frequently little or no opportunity for reflection before important decisions need to be made.

The challenge of the leadership is made more accurate by the modern day mantra of “doing more with less and quicker” which means that the outcomes need to be delivered with significantly fewer resources and show a much faster return, than would have been the case in the relatively recent past. Surviving the thriving in this environment demands a different mid-set and new attributes in today’s leaders.

Question:

Profile an organisation of your choice and assess their scope and challenges of management. Discuss strategies this organisation is employing to deal with challenges of:

1. Globalisation

2. Technological Advancements

3. Radical Transformation of the World of Work

4. Diversity Management

5. Increased demands and power customers

6. New Roles and Expectations of Workers

Answer 1

Lets take the example of Tesla Motors. Tesla is a classic example of an organization faced with the VUCA challenge. Their business in of manufacturing electric cars. However, their competitors are in Auto, IT, batteries, and solar energy sector. It has to deal with diverse set to challenges while doing the business. Lets look at them one by one.

Globalization-

Currently Tesla is only operating in the US market. However, its competitors are all over the globe. New technology is being developed from everywhere around the globe which progresses the automotive industry and the driverless transportation technology. There are electric battery manufacturers all around the world, which could compete with Tesla for their capacity of the battery. Similarly, the costs and benefits of manufacturing at a particular location in the world are to be considered when the company decides on the location of its factories.

Tesla has a global vision and is trying to get the best from all over the world which could help its manufacturing. Rather than competing with the companies in each of the sectors around the globe, it is partnering with them. the nature of their business is such that geographic location is very small limitation, only involved in the physical location of the plant. It can partner with technology companies, battery manufacturers and solar energy companies from all parts of the world and building the best results possible. It realizes its own limitations and hence, they are focusing on their niche rather than competing with the companies from around the globe in the competitors’ niche.

Technological advancements-

The technology involved in driverless transportation, electric vehicles, automotive industry, manufacturing are all important in Tesla’s case. Tesla on its own can not be the best in all these areas. There are newer and smaller companies, start ups which are coming up latest technologies. At the same time, the existing tech giants such Google and Apple have huge funding back up. they are also competing with Tesla on the same front.

The strategy Tesla is using is to leverage the speed and unconventional approach of the start ups and smaller companies in the respective industries. It is either buying the technology and patents or collaborating with the developers for its usage. Tesla also has its own tech R&D capability which is making break through progress. It is focusing on hiring world class talent and trying to be ahead in the research. The globalization has helped in this aspect by enabling them to hire the best talent from all over the world.

Radical Transformation of the World of Work

The way work is done in an auto manufacturing company is being redefined by Tesla. They are using robotics and automation extensively in the manufacturing process. The global connectedness has helped them to get the work done from a workforce located in different parts of the world. The approach of the company towards works and work ethics is suitable to the workforce. The technological developments in the company are being materialized by the younger workforce as compared to the traditional automobile companies. Hence, the org culture and work ethics are structured to be more suitable to the major workforce of the company.

Diversity Management
diversity in Tesla is in multiple aspects. It has diverse workforce in terms of gender, race, culture, location, and so on. Because of the global nature of their business, they have people of different backgrounds and cultures working together. The technology field has large participation from women as well. The strategic leadership is provided by the senior and more experienced people while the technologies breakthroughs are made possible by younger and unconventional workforce. It has adopted a very flexible, open and relaxed culture to be able to absorb all the diversity and harness a collaborative culture. The senior leadership is very sensitive of the differences and diversity in the workforce and has developed a culture where everyone feels accepted and is able to contribute to the best of their ability.

Increased demands and power customers

The customers Tesla has are very unique. Currently, it is serving to very small set of customers geographically and socially. Its product- electric cars are on medium to higher end of the price spectrum and are very advanced in terms of technology. The target customers are affluent, tech savvy, open to new experiences, environment conscious, and brand conscious. Since this is very small group, the customers have high degree of power. The new set of customers are not only looking for a product but a complete experience. The technology involved in the cars has to accommodate the demands and expectations, both explicit and hidden, in their product. The customers want a product as well as the service. Service at the charging stations, customer care support, technological help line are all required by the customers. Tesla is venturing in to a new business domain of electric vehicles. The world is not used to this product. Hence, tesla has a responsibility of getting the customers comfortable with the new technology as well as their product. Hence, Tesla is investing a large amount in developing the support system for their products. It is collaborating with the existing players in roadside assistance to build its own network of on road assistance and services such as charging stations. At the same time, it is developing its online support functionality to support the customers with online monitoring and diagnostics.

New Roles and Expectations of Workers

The workers in the current age have less emotional connection with their employer and they are aware of the value they add to the business. Hence, they are not afraid to demand for their worth from the company or leave when their needs are not fulfilled. This is a very skilled workforce and the skills they possess are very niche. At the same time, due to globalization, the company is able to employ talent from a global pool of workers which gives them a certain power as well.

The majors workers in Tesla are in the technology division and in auto manufacturing division. They all are expected to be open to new developments. The technology in both these divisions is changing rapidly and the skillset required by company from its workers is totally different from its traditional competitors. Hence, Tesla focuses on development of its workforce to be better suitable for the company’s needs. Its believes in developing its in-house talent and also on hiring the best from around the world. In return, the talented people employed by the company expect the company to take care of them. Non-monetary benefits such as cafeteria, day care centers, gym and health care facility and monetary benefits such as health insurance, stock options etc. are expected by the employees, whether or not they negotiate for these needs at the time of recruitment. The company is competing with its global peers in terms of taking care of its employees. These are the costs and benefits of globalization in terms of workers’ expectations for the company.