Why systems thinking is needed for projects in VUCA environments

The number of projects undertaken in volatile, uncertain, complex or ambiguous (VUCA) environments is forecast to increase, but standard project management methods are often unsuccessful for these. This blog considers why systems thinking is needed to successfully manage projects in VUCA environments.

How do VUCA environments impact projects?

VUCA environments impact projects in some or all the following ways:

• Volatility: Definitions of problem scope and/or solution objectives change unpredictably.
• Uncertainty: There are conflicting views of problem scope, solution objectives or project approach and it is not clear how to resolve them.
• Complexity: Unexpected behaviours are seen, apparently unrelated to previous or current events.
• Ambiguity: There are multiple interpretations of problem scope and solution objectives and it is not clear how to decide which is correct.

The success criteria for projects in VUCA environments are the same as for those in non-VUCA environments; clear goals and objectives, committed sponsors, a suitable approach and effective governance.

Why is systems thinking needed in VUCA environments?

Standard project management methods are ‘systematic’ with solutions developed using top-down decomposition, starting by defining the problem and the solution purpose, with further definition flowing from this. Decomposition continues until components that can be built are defined. These are built and integrated at increasing levels to produce the solution. In VUCA environments it is often not clear, or agreed, what the solution purpose is, how it should be decomposed, or the approach solution development should take.

Systems thinking is ‘systemic’ with problems considered holistically in terms of their structure and the interactions between components and their environments. It complements top-down thinking and views emergent VUCA behaviours as inherent to many types of problem.

Using systems thinking principles in VUCA environments

Systems thinking applies the following principles summarised in the diagram and described below.

1. Understand the bigger picture: rather than considering specific events, frame problems as patterns of behaviour by identifying trends as inputs, outputs and the environment change:

• Understand problems in their contexts to characterise the VUCA aspects; see how far they extend, which aspects are most prevalent and what drives them.
• Identify if uncertainty drives ambiguity or volatility, or ambiguity drives uncertainty or volatility and/or if volatility drives uncertainty or ambiguity. Is there a clear source of the volatility, uncertainty or ambiguity?
• Consider whether changing the scope of the problem or the solution, or including additional stakeholders changes VUCA aspects.

2. Recognise that structure generates behaviour: describe the problem structure, its elements and their inter-relationships:

• Identify feedback/feedforward loops and their lags to help understand what drives VUCA aspects.
• Define cause and effect relationships and appreciate how operational policies drive behaviours. It may be useful to run experiments and gain insight by talking to stakeholders.

3. Make assumptions explicit and test them:

• Consider assumptions made by stakeholders to identify if the VUCA aspects come from these or are inherent in the problem. Would changing assumptions reduce the VUCA aspects?
• Appreciate that models are representations with specific applicability. Test any models used for validity in the current situation.
• Projects often assume there is a ‘problem’ to be resolved with a ‘solution’. This is not always the case in VUCA environments. The need may be for a project to identify ‘issues’ and address them with ‘accomodations’.

4. Change perspectives to increase understanding:

• Aspects that are volatile, uncertain, complex or ambiguous from one viewpoint may not be from another. Consider the perspectives of different stakeholders to understand why they hold their views and/or cannot agree on the problem or its solution.
• Regard causality as uncertain and don’t assume it only runs one way. Consider different perspectives to identify broader causes and relationships to hep understand the VUCA aspects.

5. Appreciate that mental models/mindsets define current reality and expected futures: mental models/mindsets are the attitudes and expectations used to understand the world and filter problems and their solutions.

• Mindsets are similar to assumptions, but harder to make explicit. Consider the mindsets stakeholders bring when they look at the situation.
• Mindsets can ‘misrepresent’ problems or their solutions if they are incorrect or incomplete. Could the mindset(s) of some stakeholders be driving the VUCA aspects?

Note that in VUCA environments, the project manager and project team are often part of the context and their mindsets may affect the definition of the problem or its solution.

6. Resist the urge to jump to quick conclusions:

• Analyse and understand the problem before coming to conclusions and ensure all assumptions are stated and are reasonable.
• Undertake experiments or tests to confirm the analysis and problem definition. Using gate reviews to get assessments from a broad range of independent and knowledgeable people may be beneficial.

Conclusion

Standard project management can be unsuitable in VUCA environments as it assumes clear goals at the start and applies serial decomposition form this. These are usually not possible in VUCA environments and additional techniques such as systems thinking are needed to understand and address the VUCA aspects. In summary:

• The standard project management mindset is oriented to goal-seeking and considers ‘problems’ and ‘solutions’, while the systems thinking mindset is oriented to learning and considers ‘issues’ and ‘accommodations’. Both are needed to succeed in VUCA environments.
• In VUCA environments, the project manager and the project team are part of the context and their activities may impact the problem and its solution. This can be alleviated by considering different perspectives and mindsets.
• Systems thinking complements standard project management methods such that organisations can leverage their existing project management methods into VUCA environments by adding systems thinking.

 Share your thoughts

Please share your thoughts and examples of where systems thinking has made a real difference to your projects by joining the discussion using the comments section below, joining the APM Systems Thinking SIG community or via the contact section there.

Further reading

• Applying systems thinking to project management

• How Portsmouth council used systems thinking to deliver a better service and reduce costs

• How to carry a project through VUCA chaos

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