Complexity

There is a lot of confusion about complexity. Many people relate complexity to the amount of data that we need to describe the matter we're involved in. We tend to say 'we are in a complex situations'. Dr. Eli Goldratt stressed in many of his lectures the fact that the actual meaning of complexity is counter-intuitive. He used to draw the following illustration to clarify:

The left system is the simple system, because all cause-and-effect relations within the system are known. The relationship between input and output is fully clear and we know what to do to influence the output. In the right system the contrary is true. There are only few occurrences, but we have no clue what the relationship is. This is a complex system. By far the most important message of physics is that complex systems do NOT exist! If we run into a situation where the relationship between input and output is unknown, we simple do not understand the situation well enough. We need to investigate all connections between occurrences until we reach full understanding. This is what science is all about.

Managing a business is essentially the same. We need to understand the effect of our actions. The fact that we need many data points to describe a situation is no reason to be discouraged. The idea that there are no independent occurrences (everything has a cause), is widely accepted. This implies that any system, no matter how much data we need to describe it has the hidden potential for simplicity. At the end, when we fully understand it, we conclude that we only need to 'pull 1 string' to control the entire system. Therefor we should never accept compromises, nor complexity. These are just symptoms of lacking understanding of the situation we are in. Goldratt named this phenomenon "Inherent Simplicity". In our Entrepreneurial Leadership Program we guide our participant to truly master this concept to breakdown any superficially complex matter into the simplicity derived from full understanding of the dynamics of the subject matter.