Monday, September 21, 2020

Art and Science of Complexity Management

Complexity is diverse, ambiguous, and dynamic with unpredictable outcomes. 

Organizations become complex as an evolutionary trend, 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.

 As a matter of fact, modern organizations spend significant time and resources to deal with complexity, is complexity good or bad, and how to manage complexity effectively?

Innovation vs. complexity:
There are at least two ways to look at complexity: The first is to try to analyze what the impact of complexity is on a system (a process, business, economy); the second is to look for the impact of removing some of the complexity by simplification. There are needed complexities such as design complexity that competitors cannot imitate easily, or the collaboration complexity that makes people more productive and business agiler to adapt to the changes. Usually, innovation either through a need seeker or technology driver is the key factor to weave such complexity in order.

Innovation is about reducing the unnecessary complexity and identifying those critical variables, which are context. In the end, innovation complexity has to be reduced to actionable, overriding variables, which must be managed. In order to make new things, you will need additional functionality (that depends on new staff, funds, and other resources), or to turn old functions into new ones. New functions can be simpler than old ones, but become more innovative.

The paradox of complexity: The business is complex, the people are complex, and the world is complex, there’s no such thing as absolutely good or bad, you just need to have the special eyes to discern it; the system mind to untangle it. The complexity question differs from one organization to another. For example, a local company is less complex than a global company: a company that operates only in the U.S. would probably be less complex than one that operates in several nations. When a business becomes overly complex and people get frustrated and annoyed by not being able to accomplish things easily, this drives the search for simpler concepts and methods, which is the need to take the innovative initiative. At the same time, however, over-complexity in a business may be hiding simple and innovative ways to achieve things because the people involved just don't get the time to step back from the complexity and hence, they continue to follow the old routine to do the things.

The optimization of complexity: Complexity has increased exponentially and has become the part of digital new normal. Imagine the complexity that comes in due to these characteristics such as less structure, rules and regulations, diversity, volatility, ambiguity, unpredictability, lack of linearity and increased flux working and impacting together. There are unknown interactions and very high inner dynamics in complexity.

It becomes complex if things do interact, particularly in the case of "nonlinear" interaction, you can't separate things properly or you cannot predict the actual effect of interaction straightforwardly. Companies that are skilled at managing complexity can gain advantages by pushing the boundaries of a more sophisticated business mix that provides opportunities to create inter-business value, differentiated digital capabilities and the unique set of business competency.

Complexity is diverse, ambiguous, and dynamic with unpredictable outcomes. A complex problem rarely has a simple solution. 'There is always a well-known solution to every human problem-neat, plausible, and wrong, to quote Russell Ackoff: “The only problems that have simple solutions are simple problems."


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