Examining Complexity Management

It was Oliver Wendell Homes Jr. who said:

I would not give a fig for the simplicity on this side of complexity, but I would give my right arm for the simplicity on the far side of complexity.

Traditional management thinking evolved in the Industrial Age dominated as it were by machines, the linear mechanistic principle of cause and effect, and cast into management literature by the likes of Frederick Winslow Taylor in his treatise on Scientific Management. Management in this age was essentially reductionist in approach, that of decomposing complex problems into its elements and analyzing them in order to make sense of the whole.

However Complex Systems and organizations in the Knowledge Economy are non-linear, highly interconnected and interdependent demonstrating what is referred to as “emergent behaviour“, that is, the behaviour of a system that does not depend on its individual parts, but on their relationship to one another.

Emergent behaviour cannot be predicted by examination of a system’s individual parts (traditional reductionist approach). It can only be predicted, managed, or controlled by understanding the parts and their relationships – “the whole is greater that a sum of the parts.”

Individual parts of a complex system are arranged into a structure, which then determines the behaviour of the system. Systems analysis is thus a matter of identifying the relevant structure of the system and its most important parts.

Examples of parts are atoms, the parts in a machine, in people, and in nations.

Examples of structure are the social contract that people enter into to form a government or an organization, the molecular structure of a chemical compound like amino acids, or the way in which individual cells in the body are organized into a myriad of organs.

Examples of emergent behaviour then is, human life, the perfidies of the global financial system, dysfunction of communities (in demonstrating undesirable or criminal behaviour), the quirks of the economic models of nation states, as well as the impact of the environmental sustainability problem on the bottom lines of some large commercial organizations in sectors like Oil & Gas, Minerals, Metals, Mining, Fisheries, Energy, or even, Infrastructure.

The new prescription is that the more you step back and embrace complexity, the better chance you have of finding simple answers.

For example, in most organizations, sales is a frequent focus of financial objectives and concerns. When targets aren’t being met, and a business isn’t growing at the rate you hoped it would be, it’s tempting to assume that you simply need to drive more sales and for your sales people to work harder.

Their targets have been set, and they must achieve them. We even design incentive systems to reward those who simply achieve their target without reference to any other dimension of their work.

However, this can be a simplistic and naive outlook. For there may be a whole host of other factors that might be influencing this outcome.

It may be that your target market is declining or your market has shifted such that your product or service no longer meets the needsof your audience. A new competitor or a substitute product/service may have appeared in your marketplace making it difficult for you to compete.

Your marketing may be failing to generate an adequate number of leads or to encourage trust and loyalty to your brand. Your branding and positioning may have become outdated or may no longer be relevant to your market. Or it could be that your sales targets are in fact inaccurate.

And that is just a handful of the factors that could be involved. By focusing only on the sales and finance ‘nodes’ in this situation, you risk missing the fundamental root cause that is in reality your key to success.