Why We Shouldn’t Be Surprised That Managers Don’t Embrace Complexity

Why We Shouldn't Be Surprised That Managers Don't Embrace ComplexityBack in the 15th Century, Leonardo da Vinci, the great genius of the Middle Ages, said that “simplicity is the ultimate sophistication.”  Most modern managers would agree. Every good operation works hard to streamline its processes down to the barest essentials.

However, the world is a complex place and it’s only getting more so, which is why many management thinkers have been urging businesses to embrace complexity, to become, in effect, system thinkers rather than reductionists.

As Richard Straub noted in a recent article in HBR, that effort has largely failed and we shouldn’t be surprised.  Executives are paid to be accountable and are understandably reluctant to give themselves up to the complexity Gods.  In truth, complexity is not something we need to embrace, merely something we need to accept and manage.

What Is Complexity?

Before we can manage complexity, we first need to understand it and much of the literature on the subject obscures more than it reveals.  In actuality, the term is used to refer to three very different things and if we are to understand complexity, we need to account for all three:

The Complexity of an Entity: Technically known as Kolmogorov-Chaitin complexity, the complexity of an entity is defined through the amount of information it takes to describe it.  So a huge entity like the number googol (i.e. 1100) can, in fact, be much simpler than a relatively small prime number (like 842,293)

Good managers have an intuitive feel for this type of complexity and work hard to reduce it.  Operational excellence is strongly correlated to the ability to simplify complex entities.

Nonlinearity: Most of the things we deal with in operations are linear.  If we sell 10 widgets a month, we expect to sell 120 in a year.  However, many important aspects of business are non-linear and that’s hard for many managers to accept, especially with respect to accelerating returns.

Nonlinearity can be extremely dangerous for an incumbent company faced with an disruptive competitor.  What looks relatively small and inconsequential can get big in a hurry and upend even the most dominant of firms.  Innovation researcher Tim Kastelle recently wrote a great post about this phenomena in connection with electric cars.

Emergent Complexity: This is probably the most confusing form of complexity, because unlike nonlinearity, it’s not simple matter of accounting for rates of change, but of understanding how interactions between entities (even simple ones, such as transistors or neurons) can give rise to something completely unexpected (like intelligence).

I think it was this type of complexity that Mr. Straub was referring to in his article and he points to some good reasons why managers haven’t embraced it.  Namely, that managers like to be in control, the tools we’ve had haven’t handled complexity well and that the new technologies of non-human decision making are unnerving.

And he’s right, managers have not embraced complexity and I strongly suspect many never will.  So rather than expecting executives to embrace complexity, what we should be doing is coming up with strategies for managing it.

Managers vs. Executives

Most managers didn’t start out by managing.  They worked their way up and got noticed because they were able to execute.  This often entailed mastering complex information and working within a specific context of people, processes and competitive environment.  Not surprisingly, they feel confident in their ability to bring order to chaos.

However, managing is different than executing.  To manage effectively, you need to account for that which is beyond your understanding.  You have to lead people who have expertise that you don’t, operate in market situations that you did not foresee and evaluate opportunities which are uncertain.

So the first step toward managing complexity is to think like a manager rather than an executive (unfortunately, many never actually make that leap).  Simply getting a promotion does not make you a manager.  Until you are ready to take responsibility for that which you cannot control, you are just someone with a title, not a leader.

Micromotives and Macrobehavior

A particularly unnerving aspect of emergent complexity is that interactions between factors under our control can often lead to phenomena that is difficult, if not impossible, to foresee.

Nobel prizewinning economist Thomas Schelling was probably the first to identify this problem with his segregation model, in which even those who prefer to live in mixed neighborhoods (but not to be outnumbered) can give rise to extreme segregation.

Another example is the Mandelbrot set, which uses a simple formula to create almost unimaginable complexity as does Stephen Wolfram’s Class IV automata.  There is no evidence that working with simple, understandable elements gives us any more control, only perhaps the illusion of control.

So another thing that managers will have to accept is that their job is not about nodes, but about networks.  Just because they are adept at managing entities doesn’t mean they understand the interactions between them.

Becoming Less Wrong Over Time

Managers are trained to deal in “hard facts,” to be data driven.  They are supposed to research the market thoroughly, analyze with statistical rigor and make informed, rational decisions.  Good managers know their numbers.

Unfortunately, our numbers are always wrong.  They tend to be backward looking, based on small samples and are often gathered in a shoddy manner.  In fact, a recent study in the journal Nature found that a majority of cancer research could not be replicated.  If that’s true of matters of life and death, how accurate do you think marketing studies are?

I’ve suggested that we take a more Bayesian approach to strategy, where instead of assuming that we have the answers, we strive to become less wrong over time.  Good strategy is never being, it is always becoming.

Seek Simplicity, But Distrust It

So while I agree with much in Mr. Straub’s article, I don’t believe managers will ever embrace complexity to a great extent.  Complexity, is messy and uncomfortable.  It’s fine and well to enjoy thinking about complexity as an intellectual exercise, but when you are accountable for results, it’s a nuisance.

However, while embracing complexity may be quixotic, ignoring it is not an option.  We can factor down entities to make them more manageable, account for a wide variety of variables in our analysis and even deploy the latest big data technology to ensure the most robust examination of known facts possible, but we’ll still come up short.

So we should, as Alfred North Whitehead suggested, seek simplicity, but distrust it.  We need to take a network view, manage what we don’t understand and become less wrong over time.  Simplicity, after all, is not so simple.

In order to manage effectively in the modern world, we must not only hold ourselves responsible for those things that are within our control, but also account for that which is not.

image credit: pstracks.com

Clearworks

Wait! Before you go.

Choose how you want the latest innovation content delivered to you:


Greg Satell is an internationally recognized authority on Digital Strategy and Innovation. He consults and speaks in the areas of digital innovation, innovation management, digital marketing and publishing, as well as offshore web and app development. His blog is Digital Tonto and you can follow him on Twitter.

This entry was posted in Culture & Values, Innovation, Leadership & Infrastructure, Management, People & Skills, Processes & Tools, Profiles of Innovators and tagged , , , , . Bookmark the permalink.

4 Responses to Why We Shouldn’t Be Surprised That Managers Don’t Embrace Complexity

  1. Pingback: Why We Shouldn’t Be Surprised That Manage...

  2. Ton Jorg says:

    This is a nice analysis of the problem of what may be called “the problem of complexity” for those involved in managing complexity in their company or organization. This problem of complexity is actually the condition of the crisis we are still in. Simplicity is not the solution indeed. For solving the problem of complexity you need new thinking in complexity. To face complexity you need complexity. First of all, you need to understand complexity as dynamic, generative complexity, operating within networks that operate as dynamic networks over time. This is the ‘simple’ message of embracing complexity, but hard to understand and even more hard to execute by managers, who never learned to think in a new way about complexity. It can be shown that dealing with the problem of complexity can actually be at the same time the ‘solution’. But this solution is never certain. Actually, it is ever-evolving over time. Interestingly, there is a parallel between complexity and quality. Many factors are playing a role in a rather diffuse way. You really have to explore the unknown in both cases. The quality at the end of the process is however clear. This parallel is shown in how Steven Jobs was operating at Apple. He was more of an intuitive thinker than a complexity thinker. But he knew pretty well how to go on in uncertain times, and to manage the complexities involved in producing what was unknown before. It was quality for sure.

  3. There is a difference between complexity in the problem space and complexity in the solution space. The problems we are dealing with are definitely getting more complex. But that is no excuse for the solutions getting more complex. The only effective antidote to complexity is simplicity. Throwing complexity at complexity is like throwing gasoline at a fire.

  4. The world doesn’t become more complex, people have become better at operating in system thinking. Because they have become better, the limitation that once existed due to non-system thinking disappears and a new limitation emerges: complexity. System thinkers are not good at operating in complex environments (don’t confuse complex with complicated). System thinkers are cause-effect thinkers, always aiming to close the gap that exist because of a predefined goal. In complex environments the goal, if it exists at all, is subject of being emergent due to the interactions. Important to take Dave Snowden’s work into account: complex = exploration, complicated = exploitation. There is a ongoing interation between exploriation and exploitation. Bad ‘managers’ only have a eye for one. However, very very few people excel in making the exploitation and exploration work all the time …each require a different style, different attitude of both the manager as the stakeholders …and this is not even taking into account the transition between the two states back and forth.

Leave a Reply

Your email address will not be published. Required fields are marked *

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Keep Up to Date

  • FeedBurner
  • LinkedIn
  • Twitter
  • Facebook
  • Slideshare
  • Email
  • YouTube
  • IPhone
  • Amazon Kindle
  • Stumble Upon

Innovation Authors - Braden Kelley, Julie Anixter and Rowan Gibson

Your hosts, Braden Kelley, Julie Anixter and Rowan Gibson, are innovation writers, speakers and strategic advisors to many of the world’s leading companies.

“Our mission is to help you achieve innovation excellence inside your own organization by making innovation resources, answers, and best practices accessible for the greater good.”