What are VUCA and BANI?

The philosopher Heróclito de Efeso is credited with having stated that “the only constant is change”.

VUCA and BANI are two sets of acronyms that can be useful to us as leaders was we guide our organisations and teams through periods of significant change.

VUCA is the oldest and arguably the better known of the two acronyms, but the use of BANI has gained considerable pace in the last few years. While some commentary suggests that VUCA is outdated and should be replace by BANI, I believe there is merit it considering both and drawing from each that which is most helpful to us in our own contexts and circumstances.

VUCA

The term VUCA was coined almost 40 years ago by Warren Bennis and Burton Nanus in their publication “Leaders: Strategies for Taking Charge” and was adopted and made popular by military strategists.

VUCA stands for:
Volatile – liable to rapid and unpredictable change
Uncertain – difficult to predict and liable to change
Complex – composed of many interconnected and interdependent parts
Ambiguous – lack of clarity and open to multiple interpretations

Together, the four elements of VUCA are designed to present how we can view both the present state of our environment and the future state of our environment.

Although VUCA originated within the military context, each of its four elements can be applied just as readily to a business context.

There are three steps to applying VUCA effectively:

1. Assess the volatility, uncertainty, complexity, and ambiguity of the environment in which we are operating
2. Develop strategies and tactics that will enable us to move from where we are (our current state) to where we want to be (our desired future state) that take into account our VUCA analysis
3. Continue to evaluate our VUCA environment and the effectiveness of our implemented strategies and tactics so that we can adjust our intended future strategies and tactics.

Why care about VUCA?

Operating in an environment that is volatile, uncertain, complex, and ambiguous can present a multitude of problems for organisations, the teams and individuals within those organisations, and ultimately for their leaders.

At the extreme, perpetual operation in a VUCA environment can feel like experiencing a trauma, which can lead to the classic trauma responses – fight, flight, freeze, or fawn (i.e. protection through conflict, escape, dissociation, or placation).

The following list is not exhaustive, but represents some of the challenges we need to overcome in a VUCA environment:
 • Feeling de-stabilised
 • Feeling de-motivated
 • Feeling fatigued
 • Over-analysis
 • Decision paralysis
 • Over-simplification
 • Falling back on the tried-and-tested
 • Adopting a victim mindset
 • Succumbing to decision-making traps

VUCA itself only helps us to describe the environment in which we are operating/seeking to operate; we need to go beyond VUCA to develop effective strategies and tactics.

VUCA 2.0

Bill George, a senior fellow at Harvard Business School, built on VUCA by developing what he termed “VUCA 2.0”. Keeping the same acronym, but assigning new terms to each letter, VUCA 2.0 identifies four key qualities that leaders can adopt to best respond to a VUCA environment.

VUCA 2.0 stands for:
Vision – be clear on your vision & values and use these to guide your strategy setting and decision making
Understanding – be clear on your strengths & capabilities and leverage these when you design and implement your strategies and tactics
Courage – leaders may need to take quick and decisive action – courage can be a useful asset when leading teams and organisations through times of change
Adaptability – adaptability, flexibility, and agility, particularly in the execution of tactics, can help to ensure effective action in response to changing circumstances

BANI

The term BANI was coined by Jamais Cascio, Distinguished Fellow at the Institute for the Future, that he presented in 2020. In Cascio’s view: situations are not just unstable, but in some cases chaotic; situations are not simply hard to predict, but in some cases impossible to predict; and situations are not just ambiguous, but completely incomprehensible.

As opposed to VUCA, which seeks to describe the environment in which we are operating, BANI seeks to better understand the core elements of the challenges we face.

BANI stands for:
Brittle – potential for systems and structures, which appear to work sufficiently even under increasing levels of stress and pressure, to break completely after experiencing a significant shock or when the stress and pressure exceeds a (previously unknown) breaking point
Anxious – potential for emotional and psychological toll that uncertainty and unpredictability can have on individuals and organizations
Non-Linear – contrary to how we normally view the world, cause and effect can become seemingly disconnected and/or disproportionate
Incomprehensible – it can be increasingly difficult to make sense of why things are as they are and what we should do next – this is despite (and sometimes as a result of) the large amount of data points available to us

In addition to the acronym, Cascio also proposed ways in which we can best respond to each of the four challenging elements:
 • Resilience and Capacity can help protect against Brittleness
 • Empathy and Mindfulness can help protect against Anxiety
 • Flexibility and Context can help counteract Non-Linearity
 • Transparency and Intuition can help counteract Incomprehensibility

In short, BANI helps to highlight: our vulnerability to rapid change; our anxiety in the face of uncertainty; the non-linear nature of cause and effect; and the difficulty we can encounter comprehending why things are as they are and what we should do next.

So What?

As leaders, however we choose to make sense of the world around us and the environments in which we choose to operate, we need to be open to developing new ways of thinking and operating in order to continue to adapt.

VUCA can still be helpful in describing the environment in which we are operating. BANI complements this by eliciting more of the human experience of living in a VUCA world.

There is no simple “solution” to dealing with volatility, uncertainty, complexity, ambiguity, brittleness, anxiousness, non-linearity or incomprehensiveness, but a good place for us to start is with our own mindsets. As leaders, we need to continue to be curious and ask good questions to increase our knowledge and awareness; we need to be open to new ideas and not be afraid of implementing change, even when that means adopting novel ideas or re-visiting ideas we previously ruled-out, but that may now prove beneficial; and we need to adopt and maintain a growth mindset that will help us identify all the positive steps we can take.


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