The simplicity of complexity
Complexity is a huge issue among decision makers. The term "Increasing Complexity" gives more than 9 million hits on Google. Back in May 2011 KPMG published a report with the title: "Confronting Complexity". The report reflects the findings from research among 1,400 senior corporate decision makers from 22 countries representing seven main business sectors and it draws the following conclusions [I quote]:
- Rising complexity is an issue in all the countries surveyed, and in all sectors. But the experience of complexity differs around the world.
- Information management stands out as both a cause of complexity and a solution. It is a challenge for modern, international corporations to understand the range of enterprises they control. Outdated IT systems are a significant barrier to managing complexity.
- Complexity is not static. Its causes change as companies move through the business cycle and economies develop.
- The actions many companies take to deal with complexity are, at best, moderately effective. Improving information management, reorganizing the business or changing the approach to people management, are all popular responses to complexity. But less than half of the people who undertook them thought they were particularly effective.
- Opportunities do exist in complex situations. Most people think complexity provides opportunities for change, but companies in developing economies are more likely than those in mature economies to see complexity as an opportunity to develop new strategies and new products.
..... Broadly, there are two alternative strategies for dealing with complexity. Embrace it as a spur to innovation and change; or try and avoid it by keeping business processes simple. Executive teams need to decide which path is more appropriate for their companies. [...End of quote]
Interestingly enough, the report presents the approach to complexity as a dilemma. To be honest I don't see the conflict. The 2 proposed strategies perfectly go together. Anyone has all the reason to avoid complexity despite the fact that it can be 'a spur to innovation and change'. I think the 2 should go hand in hand under all circumstances. Just imagine the pace of change and innovation from a perspective of simplicity.
Just let it sink in... Less than half of the people who try to fight complexity are even moderately satisfied with the results. From my experience there are 2 reasons for complexity in any situation:
- People tend to compromise within a dilemma in stead of finding a breakthrough.
- Most measures taken to reduce complexity are counter-productive, because they are taken in isolation. They are focused on a symptom, not on the underlying cause and they don't take potential negative effects for other areas of responsibility into account.
Mastering complexity requires just a few, but very important steps:
- Abstraction; leave out everything non-essential. This is very different from ignorance. Abstraction assures that underlying symptoms are still included in a verbalization, because the root cause is made essential. It is not eliminating relevant information. It just separates the symptoms from the cause.
- Polarize: Translate the complexity into a dilemma. Define the good reason to want something and the good reason to not do it.
- Root-cause analysis: proof that all negative symptoms in your subject area are caused by the fact that you are compromising within the dilemma instead of truly solving it.
- Innovate: Introduce the innovation that would in theory solve the dilemma without any need for compromise (feasibility is no issue in this stage).
- Tactics: Now start thinking about the feasibility of the required innovation and initiate the steps towards implementation. Take potential negative effects and obstacles into account.
- Execute: Prioritize carefully. Save all available resources for running the existing business and the implementation of the defined tactical sequence. Do not accept lost energy on alternative (symptomatic) projects outside of the defined sequence.