Monday, December 1, 2014

The Multi-Faceted Complexity of Modern Organizations

Complexity is neither all good nor all bad, it is one of the key characteristics of digitalization.

Digital organizations become more complex due to the accelerating speed of changes; non-linear connectivity, information explosion and hybrid nature of organizational structures. So when speaking about organizations’ "being complex" or even "becoming more complex," which specific forms of complexity are you referring to? What is the digital nature of that environmental complexity? When you talk about environmental complexity, which specific forms of complexity are you actually pointing to?

Many shades of corporate complexity: So is there a selection of complexity dynamics at play which therefore lead one to think that organizations are becoming more complex. Quite specifically: 
- are they increasing in hierarchical complexity because they need to coordinate more cross-functionally? 
- are they increasing in information density complexity because of advance in technology and information processing? 
- are they increasing in some kind of fractal-like patterns of self-similarity? 
- are they increasing in network complexity because of the number of nodes and connections in the organizational environment? 

There is something more fundamental which plays a causal role in fostering greater organizational complexity. Organizations "become complex," not for their own amusement, they do it to respond to environments more proactively. And much of that environment is experienced through trying to get things done. One form of trying to get things done is the incredible daily difficulty of the creation of pathways for action.

Complexity vs. Complication. Within the organizational context, it seems to be useful to separate complication from complexity. The complicated things can be simplified in a certain way, but the desired complexity can become business’s competency because the competitors cannot copy such capability easily.  However, people risk talking about it as an abstraction rather than a grounded set of "reasons" that organizations become complex in the first place. Organizations clearly grow complicated as they get larger, specialized, offer more products, etc. But what makes them "complex"? Or, perhaps a better way to phrase it is what makes the interaction of people complex in the organizational environment. There are at least two components that are under-appreciated: 
(1). Self-organizing behavior - meaning the decisions and actions made at the local level under conditions of uncertainty and with unintended consequences for the larger system. 
(2). Path dependence - meaning the sequential process of making decisions based on prior decisions, without regard to their efficacy or rationalit

Hence, complexity is neither all good nor all bad, it is one of the key characteristics of digitalization, on one side, the greater organizational complexity can improve agility to adapt to the changes; on the other side, the undesired complexity can make things over-complicated to stifle the creativity. The leaders and managers just have to understand the multifaceted complexity and manage them systematically.


Which came first, the chicken or the egg? Do groups of people (organisations) generate knowledge as a natural course of being or do we become more complex as a consequence of the knowledge that becomes available to us. I suspect it's both.

Is complexity a personal thing? I work in the NHS and was recently discussing organisational complexity with a heart surgeon using Ralph Stacey's model. She considered the human dynamics around her as ranging from simple to complex. When asked about performing heart surgery, she saw it as generally being simple and occasionally complicated. So it's very much about perception.

Good or bad data. No doubt the increased availability and quantity of data can engender greater complexity. Therefore deciding upon what data to use is of itself becoming an increasingly complex issue.

Amateur or Professional. With more data, actors, diversity, unpredictability within systems excessive professionalisation could hinder organisational performance or in other words knowing more and more about less and less could distract managers or leaders from being effective.

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