The EFMD business magazine

The EFMD business magazine

Managing complexity: An idea whose time has come

Richard Straub explains why we now need to tackle the complexity of business.

We may have different visions about the future. Few, however, would doubt that the world has become more complex in recent decades and that it continues this journey at an accelerating and—for many of us—unsettling pace. With digitisation, the interconnectivity between people and things (software “talking” to software) has exploded. Dense, global networks now define the technical, social and economic landscape. This interconnectedness and interdependency brings about entirely new risks, as well as opportunities, at every level.

A scholarly interest in complexity, as a subject unto itself, began in earnest some 30 years ago. This was when, for example, researchers at the University of St Gallen in Switzerland developed a management model based on Systems Thinking. Popular literature propagated “complexity theory”— in particular, the notion of the “butterfly effect” by which a small event in a remote part of the world (such as the flap of a butterfly’s wings) could trigger a chain of events that would add up to a huge disturbance in the larger system (such as a hurricane many thousands of miles away).

With this, managers’ eyes were opened to the reality that organisations are not just complicated; they are complex. To be more precise, organisations are complex, adaptive systems because they are made up of humans with brains and, as such, possess learning capabilities.

Peter Senge’s landmark 1990 book, The Fifth Discipline: The Art & Practice of The Learning Organization, showed the potential for organisations to enhance their learning capacity at a system level and to increase their nimbleness and competitiveness. Senge’s bestseller resonated strongly around the world and unleashed a flurry of literature on what was described as a new kind of “learning organisation”.

But, in reality, little changed.

This wave of interest in complexity thinking led to few actual new practices being adopted among corporations. Why? There are, I think, five major reasons for the failure to affect management. At the same time, a deeper look at these impediments also suggests why this long-overdue shift may finally be poised to take place.

It is hard for managers to think multi-dimensionally

Where complexity exists, managers have always created models and mechanisms that wish it away. It is much easier to make decisions with fewer variables and a seemingly straightforward understanding of cause-and-effect.

For the full article, you can view the PDF.

Managing complexity: An idea whose time has come

See more articles from Vol.07 Issue 02 – ’13.

Richard Straub is Founder and President of the Peter Drucker Society Europe and of the Global Peter Drucker Forum.

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