VUCA, from the Cold War to Perpetual Disruption

Vulnerability Makes Strong Alliances More Necessary than Ever

For years, I’ve been using the term VUCA to describe the world’s growing tendency toward disruption.

VUCA is an acronym that stands for volatility, uncertainty, complexity and ambiguity. The U.S. Army War College coined the term in the 1980s when it was researching what the world might look like after the Cold War. Because for decades, the geopolitical stalemate between two superpowers, the United States and the USSR, defined world affairs. China played a complex, often secondary role.

When the Soviet Union collapsed, the world entered a new phase marked by shifting alliances and redefined power dynamics. So VUCA has long served as a lens we can use to view the unpredictable nature of global events.

Today, we find ourselves in yet another transitional period. This time, however, fallen empires aren’t driving change. The relentless rise of disruption is. And two key reassessments can help you translate the framework of VUCA into resilience:

• Volatility has evolved into vulnerability.
• Ambiguity has given way to alliances.

Vulnerability Makes a Personal Call to Resilience

From global pandemics to trade wars, from regional conflicts to the technological revolution, the world is undergoing seismic shifts.

So, I’m certainly not arguing that the world is not volatile. But such times of uncertainty, while unsettling, are a generalized state. The signals don’t necessarily drive action.

Vulnerability, on the other hand, is deeply personal and immediate. When a company faces volatile market conditions, it might prompt concern. But when employees hear their roles might be at risk, concern can turn into existential dead.

Vulnerability creates urgency – both for individuals and organizations – to build resilience and proactively adapt to challenges.

Consider the example of supply chains. Volatility might manifest as shifting consumer demands or fluctuating raw material costs. Your teams might be worried but have a lack of clarity about what direction to go.

But what if those shifts jeopardize the survival of key suppliers? What if they disrupt logistics networks or put entire operations at risk? Now you’re vulnerable.

Acknowledging vulnerability leads to strategic responses that build resilience. That strategic response must be ReGlobalization, a shift from relying on broad globalization to a more regional, resilient approach.

ReGlobalization emphasizes nearshoring, reshoring and friendshoring to create diversified, agile networks that mitigate risks that create supply chain vulnerabilities. This approach enables businesses to adapt to the changing realities of a VUCA environment while fostering sustainable growth.

Alliances Are Your Most Critical Asset

While ambiguity remains a factor in global decision-making, a ReGlobalized world requires new alliances.

In fact, I consider alliances with great partners your most critical asset. Partners with shared purposes certainly are a strength of Tompkins Ventures.

Because winning in this era demands alignment across a network of trusted partners. No longer can you win with just your company’s resources.

The ongoing trade war between the U.S. and China and Russia’s invasion of Ukraine highlight the strategic necessity of alliances. Countries and companies alike are rethinking their dependencies.

For the Americas, this means moving toward some version of a “3-plus” strategy. The three should be Mexico, Panama and the Dominican Republic.

Mexico is a growing manufacturing powerhouse with labor costs lower than China. But it struggles with logistics and supply chain – two of the many strengths of Tompkins Ventures’ partners.

Panama and the Dominican Republic can serve as logistics hubs, including transshipment and added-value manufacturing.

The plus, of course, refers to the rest of the world. You have a wealth of potential alliances out there.

Because these days, a company cannot rely too much on suppliers from nations engaged in adversarial trade policies or questionable practices. If so, you risk your long-term viability. Accusations of intellectual property theft, forced labor or environmental degradation risk your bottom line, not just your reputation.

Clearly, the right alliances are prerequisites for sustainability and success in the new VUCA world.

Reframing VUCA Leadership for the Future

Redefining VUCA as vulnerability, uncertainty, complexity and alliances aligns with the realities of today’s global landscape. Leading in such a VUCA world requires more than weathering disruptions. Your company must actively adapt and build systems that thrive on resilience and collaboration.

As the dynamics of ReGlobalization unfold, leaders who forge strong alliances and address vulnerabilities will win. Others will lag.

By embracing this new framework, organizations can navigate perpetual disruption with clarity, agility and purpose. The question is not whether disruptions will occur. The next one is right around the corner.

Instead, the question is whether you have the leadership skills, systems and alliances to respond in today’s VUCA environment.

Related Reading

• Embracing Labor on Demand in Today’s VUCA World
• Massive Tariffs Will Create Massive Supply Chain Disruptions
• Bulloney