What VUCA Means for Corporate Real Estate


What VUCA Means for Corporate Real Estate

Over the past few years, we have been living in a very fast-paced, unpredictable world. From advances in technology such as the rise of social media to global events such as the COVID-19 pandemic, there is no doubt we live in a VUCA world. 

What is VUCA? 

VUCA is an acronym for volatility, uncertainty, complexity, and ambiguity. The term was first used by the U.S. Army War College to explain the state of the world after the Cold War. Author Bob Johansen looked at VUCA from a business perspective in his 2009 book, Leaders Make the Future. He argued you need new skills, approaches, and behaviors to manage, in the face of VUCA threats.  

Volatility describes the speed of change in the industry or the world. The more volatile, the quicker things change. While this is often seen as negative, it can bring unexpected opportunities as it breaks up existing routines.  

Uncertainty describes the ability to understand what is going on and therefore predict the future. We saw a lot of uncertainty during the height of the pandemic as restrictions and guidelines were constantly changing. Both the present and future were very unpredictable. 

Complexity looks at all the factors contributing to the situation and the relationship between them. As we see more factors of different varieties, and their connections to each other, the more complex the situation is. Complex changes are very disruptive, making it more difficult to reach a conclusion.  

Ambiguity refers to the lack of clarity due to incomplete or inaccurate information. Therefore, making it harder to interpret and make concise conclusions.  

In a VUCA world, it is not uncommon to feel a loss of control due to the turbulence and disruption of normality. 

Corporate Real Estate and VUCA 

The COVID-19 pandemic created a lot of volatility as everyone had to quickly adjust to working from home. Current trends show offices are no longer being used for heads-down desk work and are serving as a space to collaborate with your team. The uncertainty in the financial market has changed lease structures, giving flexibility for businesses returning to in-person and hybrid work models. Questions such as “what will the office space look like as we return to the new normal?” arose, as remote working accounts for 40 to 50 percent of workers, compared to 10 percent before the COVID-19 pandemic. As glimpses of life before COVID appear, giving us hope for the new normal, a recession is set to rise, adding to the uncertainty of the economy and the workplace.  

The pandemic changed everything. Corporate real estate leadership teams have come together to ensure the physical office space now aligns with the health and safety of their employees. Whether these changes were modifications in the office space, mastering modern technology, or implementing health measures, organizations had to beat the complexity to innovate. We have seen many ways organizations plan to return to the office. We must be ambiguous, as there is not a perfect plan that fits every business. 

These challenges have led leaders to rethink real estate modules and make changes for short- and long-term success. 

Change Your Mindset 

We need to accept these changes and continue to be flexible as VUCA represents everything in our industry as well as our world. Rather than looking at VUCA as a setback, we should look at it as an opportunity to grow. In a positive VUCA world, volatility becomes vision, uncertainty becomes understanding, complexity becomes clarity, and ambiguity becomes agility.  

To learn how RefineRE can help you make good real estate decisions during this time for VUCA, contact us for a complimentary consultation.  

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