The world of business keeps getting more and more complex, and we either learn to manage this complexity or become overwhelmed by it. At least that is the common explanation for why older and perhaps simpler ways of organizing business operations no longer yield the results they once did or when justifying why our organizations must endure yet another painful re-structuring.
We are hardly alone in feeling overwhelmed by complexity."
We are hardly alone in feeling overwhelmed by complexity. When IBM surveyed 1,700 global CEOs in 2012 on the challenges they face and their predictions for the future, an overwhelming 8 out of 10 reported that they anticipate their business environments to get more complex in the future, while more than half said they felt unprepared to deal with this change. All this discussion on increasing complexity opens up two central questions:
1) Is our contemporary business environment really that much more complex than that of earlier generations of business leaders or is this an illusion we have created for ourselves; and
2) If the business world really is increasingly complex, how should managers deal with it without getting overwhelmed?
To address the first question, we can look to the work done by Boston Consulting Group’s Institute for Organization. The Index tracks the number of performance imperatives a representative sample of international companies commit to in any given year. At the start of their tracking period in 1955, companies would typically commit to between four to seven imperatives, while in 2010 the figure was between 25 and 40. To manage all these strategically important imperatives simultaneously, organizations develop complicated coordination processes and control mechanisms, which further complicate managers’ lives. BCG found a 35-fold increase in the amount of time top management spends on coordination work for the same time period.
Complexity should be considered as a source for great novel ideas and healthier organizations."
So if continuously increasing complexity is the new normal for business, successful managers must find ways to deal with it in ways that help them get both clarity and new insights amid a confusing and disorganized world. In her work on mindfulness, Ellen Langer from Harvard University argues that by teaching yourself to actively notice new things around you and by forcing yourself to second-guess your own immediate reactions to new events, you can actually shift from seeing complexity as something to be tamed, but instead as a source for great novel ideas and healthier organizations.
Whichever way you or your organization choose to deal with complexity, keep in mind that the world is unlikely to get less complex any time soon.
We may as well make the most of it.
Mikko Laukkanen is Academic Director at Aalto University Executive Education Ltd. In his doctoral thesis he examined the challenges of modern-day innovation initiatives and reasons for their failure.