Researchers at IMD identified four sources of complexity, all feeding into each other, which leaders had to reckon with: increased diversity inside the organisation (through its global workforce, and multiple organisational layers); interdependence (companies are more exposed to events and actions taking place outside of their usual circle of activity); ambiguity (information overload and difficulty to interpret that information); and an ever faster pace of change which researchers call flux, whereby today's solutions may be outdated tomorrow.
Companies have responded with a confused mix of simplification techniques and new levels of complexity within organisations. But IMD researchers suggest that establishing simple principles in a few well chosen areas might be the solution to make sense of, and cope with, complexity elsewhere.
Purpose and values is the first one: the guidance that such clarity will provide will be a critical tool to avoid the pitfalls of complex environments. Core processes, those used by the entire company, should be standardised to leave room for adaptations at the subsidiary level. Managers should also set clear limits to the amount of complexity allowed in their organisation, and contingency plans for when things get out of hand.
Finally, leaders working in complex organisations should adopt a mindset whereby they rely on the creativity and initiative of their team members and help the different parts of their organisation to work together to create value.
Once these four key issues are clear and consistent throughout, managers in different parts of the company can respond to complexity according to their own needs and capabilities.
Source: Mastering global complexity
M Maznevski, U Steger and W Amann
Real Learning @ IMD
Review by Emilie Filou