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Complexity Management

Although this title can seem a little absurd, this article aims at understanding better the principles of complexity management. In effect, complexity is a large concept, which usually seems unmanageable for most managers. Let us start with the pillars of complexity management for businesses.

Strategy Alignment

Most projects fail because this condition is not respected. In many organisations, departments and their people often act and make decisions for themselves. They do not pay attention to the business strategy. Each one wants the best results for its department. However, managers should understand that their decisions also impact on the rest of the business. For this reason, any project must involve a team project formed by people from all the departments and functions in the company. This team project should think and act according to the common interest of the business. Thus, all the strategies have to be aligned with the business strategy. In effect, interactions and complexity will be easier to manage if all the strategies are pointed towards the same goal.

Transparency

Nowadays, we think that all the information is accessible to anyone but this is not entirely true. Although there is a lot of information in organisations, everyone tries to keep it for himself. Information is synonym of power and nobody wants to share it, for fear of losing power of decision in front of others. However, any decision should be revealed to the entire organisations, so all the departments are aware of what is actually happening. This will enable them to make decisions, which will suit to the business strategy. Thus, the conclusion is that information must be available easily to avoid useless interactions, which will cut complexity.

Sustainability

When starting new projects, organisations must beforehand make sure that it is not a precipitated decision and that it is suitable for this kind of organisation. In effect, all systems are not good and effective for all businesses. Organisations have different needs and requirements, which should be satisfied by different and suitable decisions and implementations. Preparation is a key factor for sustainability of any project implementation. Sustainability enables to have less complex systems. In effect, sustainability involves long-term relationships, which imply less multiplication of interactions and then less complex systems. Complexity can be easier to manage through smaller units. In effect, large systems imply a tremendous amount of interactions whereas smaller units are more manageable. Using modular systems is the key to implement projects successfully and outstrip complexity. Although interactions still exist, they are easier to manage through modular systems because any other can replace them at any time. Complexity is not a threat anymore if you control it with modularisation. The concept of modularisation is developed into a chapter of Vivek Sood’s book, The 5-STAR Business Network (http://bit.ly/5-STARBN), and will be even more deeply analysed in his next book, Outsource, Outsmart, Outprofit. Therefore, these four elements are the most important pillars in complexity management. If you understand how to use these pillars, complexity management will be made much easier for you business. Although complexity can be helpful, it is not worth it to let it control your business. Complexity will certainly beat you. However, you can learn how to be able to manage it and tame its interactions, by using these few elements above. You can find a more detailed approach in the book The 5-STAR Business Network, by Vivek Sood.

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  • Watson SC Executive says:

    I believe that some complexity is necessary and even advantageous. For example, customers like to have some choices–and different segments have different needs; country or regional business units can be closer to the ground than headquarters and are more likely to know what customers want in their areas. However, if not carefully managed, the new interfaces and modes of interaction can lead to bureaucracy, conflict and wasted energy. The key is not to eliminate choices and autonomy, but to consciously manage the benefits and costs of optimizing customer offerings, decision and operational processes, business and organizational structure, and the IT systems that support it all.

    Complexity is a natural consequence of a company’s success. As companies grow, they enter new markets, expand their product lines and set out to conquer new customer segments. And on the way, they build up their organizational, process and IT infrastructure to support that growth. Taken individually, each decision makes rational sense, but in aggregate, they create exponential growth of the “nodes”–points where business units, functions, geographies, and layers of management have to interact to make and execute critical decisions. This often becomes the root cause of sluggish growth, high costs, and poor returns.

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