Saturday, June 13, 2020

The Variety of Complexity

Individuals, organizations, or societies "become complex," as an evolutionary trend, not for their own amusement, but do it to respond to environments and drive progress proactively. 

Change is overwhelming, and complexity is inevitable, but they are both facts that are happening all the time and a faster pace than never before. Complexity means increased uncertainty in things outside our control and uncertainty in the results of implementing strategies. Complexity is diverse, ambiguous, and dynamic with unpredictable outcomes.

Considering there is no universally agreed definition of complexity, and imagine the complexity that comes in due to the very characteristics such as volatility, unpredictability, ambiguity, nonlinearity, or increased flux, etc. In the corporate scope, there are varieties of complexity such as hierarchical complexity, information complexity, fractal complexity, network complexity, governance complexity, etc. Complexity management takes multidimensional thinking and multidisciplinary approaches.

Hierarchical complexity - are they increasing in hierarchical complexity because they need to coordinate more things? Traditional organizations with overly rigid hierarchy are complicated systems that often do not have the requisite agility to respond to a dynamic business environment. Organizational bureaucracy inherited from overly rigid structures, redundant business processes, or the traditional management disciplines are criticized by the lack of system perspective, with characteristics such as inflexibility, ineffectiveness, silo, stagnation, unresponsiveness, or lack of creativity, etc.

The essence of digital management discipline is to eliminate complications or unnecessary complexity but enforce greater desired complexity such as highly-productive complexity, design complexity, or value/cost/risk ratio complexity. The hybrid organizational structural models will integrate the physical structure with social process models (both structured and unstructured social processes); chaos theories and the complex adaptive system will integrate with developmental processes, with the goal to improve adaptability and speed up strategy execution

Information complexity - are they increasing in information density or complexity because of advances in technology and information processing? Information permeates everywhere in the business and the data environment is often fraught with inconsistency, redundancy, and incoherent or broken business processes result in significant information inconsistencies.

To deal with information complexity, a powerful information management discipline with standardization of information management processes is an essential prerequisite to providing effective information refinement and integration solutions for achieving information fluidity and synchronization. Real-time, high-quality information can bring business insight and enable organizations to see the future clearly; and build business competency effortlessly.

Fractal complexity - Are they increasing in some kind of fractal-like patterns of self-similarity? Enterprises are inherently and intensely complex. They act as complex and unpredictable systems, amplify, or ameliorate the effects of others. Technically, the complexity of aggregate layers of every internal system is a burden that often causes conflicts. A pattern language helps to see connectivity and interdependence of business systems. In fact, understanding patterns and fractal complexity enables the business management to explore the “rules” behind the scenes for unlocking the performance of the business.

From a problem-solving perspective, behind every problem is a relationship dynamic out of the alignment. Handling them well is important for both diagnosing the real cause of problems and solving them in a structural way. It will take practice, practice, and practice more when promoting thinking about the systemization of the effects of patterns when patterns are operationalized as systems.

Network complexity - are they increasing in network complexity because of the number of nodes and connections in the organizational environment? The black and white boundaries continue to diminish in the 21st century due to the occurrence of increased economic integration across geographical borders, industry boundaries, and people's movement across cultures. Actually, there are two things that serve to make modern complexity a different situation: the speed at which things happen and the connectedness in networks in the business environment.

Analogically, every organization is like the switch connected to the ever-expanding business ecosystem. Individual enterprises and the eco-systems they operate in are both complex adaptive systems. Such systems do not operate in a linear, predictable way and such systems also have the added complexity of not just dynamic relationships but also dynamic nodes. To deal with network complex complexity, it’s crucial to invite customers or the various ecosystem partners into broader conversations, bring different perspectives, and generate the flow of ideas. Be alert: our boundaries might have changed based on open conversations and taking the time to thoughtfully think about the specific issue of boundaries, and deal with complex problems systematically.

Governance complexity -are they increasing in governance complexity because the management discipline and GRC practices are interdependent than ever? Fundamentally, sound governance is to eliminate risks and do the right things. Both over governance and under governance stifle change. There is governance complexity because sometimes governance "standards" can be taken too far and become their own bureaucracy. Further, unpredictability, uncertainty, and the probability of surprising emergent properties increase with the complexity of the systems cause the complexity of governance as well.

Given many organizations that get stuck at the lower level of maturity don't view governance as "decision-making optimization," their governance efforts usually devolve into time-consuming, costly, bureaucratic constructs. Also, the problem with governance is that people enforcing governance normally have a frame of reference based on their own experiences and a view of the organization's existing capabilities. An effective governance discipline helps businesses manage complexity and improve resilience smoothly.

Organizations "become complex," as an evolutionary trend, not for their own amusement, but do it to respond to environments proactively. Managing a variety of complexity is both art and science. Complexity Management is the methodology to dig through the root cause of the issue or the chain of business problems, minimize value-destroying complexity, encourage and enhance value-adding complexity in a cross-functional approach to accelerate organizational performance and unleash its full potential.


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