Eddie Cantor coined the phrase “It takes 20 years to become an overnight success.” His public debut was in 1907, singing in a music hall. Cantor spent a decade touring, refining his craft, developing new material and finally made his Broadway debut in 1918. It wasn’t until 1927, after another decade, that he reached notoriety with Kid Boots in 1923.
Gradually to suddenly applies to successful outcomes as well as devastating outcomes. This is the because the power of compounding affects our upside just as much to as impacts our downside. Seth Godin refers to how incremental daily progress is what actually causes transformation.
“Showing up, every single day, gaining in strength, organizing for the long haul, building connection, laying track — this subtle but difficult work is how culture changes.”
Seth Godin
The same is true for organizations. Some of the best, well known brands such as McDonald’s, Nike, and Starbucks all had their twenty years of success making.
Even looking at companies out there today; we can see them building their craft, refining their brand, and building customer loyalty. Peloton, the creator of the indoor, connected biking experience, is a great example. They are eight years into their journey and already have over 2.5M members and their members now regularly complete 1M workouts a day. They’re just getting started. For sure, Peloton has seen a bump in both members and workouts as a result of the lockdown(s) in the USA and UK but in April 2020, its debut ‘Live from Home’ ride broke the record for the largest live class. They had over 23,000 participants.
Peloton is looking to the future, aiming for 100 million subscribers, through broadening their product portfolio, expanding their geographic reach, and creating better experiences. People aren’t necessarily going back to the gym and Peloton may well provide an alternative to those looking for a competitive spin class experience at home. We are looking forward to following their success.
What Cantor and Peloton, and so many others, make so blatantly clear is the need for consistency and repetition. Whether it is singing a song or hosting an online class being consistent is really important. I’m sure Cantor sang to a crowd of a few on more than one occasion and Peloton had classes that were attended by only one or two participants. Consistency builds reputation, facilitates feedback, and allows you to refine your message and product. Repetition unlocks your value proposition and makes it available to everyone.
In the same way that gradually can lead to devastating consequences so too can it lead to success. The difference comes down to our values, beliefs, and attitudes. Or culture. It is up to you; success is within your reach. You too can become an overnight success!
A Google search of ‘how to run an effective meeting’ returns 555M entries in about 0.64 seconds. Hopefully that is sufficient to persuade you that there isn’t a shortage of instruction on how to lead a productive meeting. There are reportedly about 11M meetings a day in the US yet Harvard Business Review in their “Stop the Meeting Madness” article said that 71% of executives interviewed said meetings are unproductive.
It was hardly a surprise therefore that during our research on the topic of Complexity versus Simplicity a consistent theme from every single one of our interviewees was related to “too many meetings” and “unproductive meetings”.
Why then, with so much instruction available and a clear understanding of what good looks like are we still creating interactions that are unproductive?
To be fair, most people don’t attend meetings with the intention of making them unproductive. We approach them optimistically, forgetting quickly about the last time we met and hoping that we will do better this time. Good intentions apparently aren’t sufficient.
What meetings say about your organization
Poor meeting outcomes are signs of three underlying issues:
Lack of engagement – whether this is “it’s not my job to prepare the agenda” or “hey, they’re paying me to sit here” most staff are disengaged during a meeting and most likely before and after as well.
Lack of leadership – leaders need to insist on the appropriate process: objectives, agenda, actions, etc. This of course means that when leaders hold meetings that they lead with the appropriate process too.
Lack of accountability – if it’s OK to go from meeting to meeting with no real process or outcomes then there is clearly an accountability problem. If it’s culturally acceptable to have unproductive interactions quite often this is demonstrated in other parts of the organization.
The opposite of these signals is also true, in that where you have productive interactions, it is normally an indication of a positive culture with an engaged workforce, competent leaders, and acountability. Certainly, given the behavioral components of an effective meeting it isn’t unusual to find pockets of an organization where engagement, leadership, and accountability thrive. A lot comes down to the leadership style of an individual, department, or group.
Meetings continue to be an important way in which we collaborate, share ideas, and gain alignment. Moreover, they provide a human connection, a social connection and a place to further business and personal relationships. When conducted properly they are energizing. When we fail to bring the discipline, structure, and process to the interaction the result is fodder for the next Dilbert cartoon.
The cultural norm in business today is all about building consensus before making a decision. Sounds lovely but building consensus is an art and it frequently creates so much complexity. The simple reality is that the goal of decision making should be for leaders to review the facts and relevant opinions and then make a quick decision. The science of decision making. The truth is that good decision making is both an Art and a Science. You won’t really know what the right decision is until after you have actually made it. All you are doing is making a choice from a series of options. The hard part comes after your choice; making it work.
Leaders are responsible for creating and sharing an organized decision-making process. That sounds somewhat formal, but it doesn’t mean that it has to be rigid, cumbersome, or time consuming. It is simply an understandable framework for the organization to establish the basic “rules of the road” when it comes to making decision. Decision rights, delegation of authority, and RACI (Responsible, Accountable, Consulted, Informed) Models are all considered as great tools to avoid chaos and confusion.
Having a decision-making process is crucial for all organizations. However, if it is too cumbersome and time consuming it will stall the organization. Too simple and you run the risk of making the wrong choice. In both cases the impact shows up in outcomes, engagement, and overall effectiveness.
Any decision-making process should include clear objectives about the situation and incorporate input, insights and knowledge from key stakeholders. In thinking about key stakeholders keep it simple by considering three groups of people; Who cares about the decision? Who has knowledge about the issues and alternatives? and who needs to agree to the decision?
These three groups of stakeholders not only help you make the right choice, but they also help in making sure that the decision is implemented. Their participation in the process engages their commitment to see it through, which is probably more important than the decision itself. As they say, an average choice well executed is often better than a good choice poorly executed.
Making choices and executing them go hand in hand. What is important is the commitment to the decision. Commitment is different from consensus. Consensus is a general agreement, shared by all the stakeholders, about a decision. Commitment is a promise to make the decision a success. Commitment is saying, whether you agree with the choice or not, that you will personally do everything you can to make it a successful.
Engaging the three groups of stakeholders to gain commitment can be difficult. We use four exercises to help with the visualization and ownership of the decisions to be made. The first is to imagine and share as a team what success looks like for of each decision alternatives, post implementation. Think in vivid color. Make it the art of the possible. The second is to think about the unintended consequences of the choice. What might be the second and third implications of making the decision. Consider the impact on customers, employees, standard operating procedures, technology, etc. A third exercise is to think about failure. How could this decision make things worse, what could go wrong, what would be the implications? By articulating the failure scenario, we begin to understand potential risks, develop balance in the execution, and gain clarity on the path forward. Finally, we use an assumption-based exercise to help build commitment. Asking the question “What would need to be true in order for this choice to be a success?” This is a simple yet effective way to work through assumptions that stakeholders are making when considering the options in front of them.
Using our three stakeholder groups and four exercises can help to build commitment. Even when making unpopular decisions this method allows for due process; listening, inclusion and consideration of alternatives which leads to better choices and improved execution. Moreover, these techniques keep the decision-making process relatively simple and avoids a complex consensus driven approach.
The final takeaway: The cultural norm of today may be to gain consensus but that doesn’t equate to successful and actionable decision making. What does? Commitment to support a decision once made, regardless of personal views and doing all that needs to be done as a team to implement that decision is the key to success.
Complexity is not particularly difficult to recognize. Most of us know it when we see it. The hard part is putting it into words and being able to discuss it in a way that is productive. The lack of a widely used framework prevents us from really tackling complexity head on.
Our recent research on recognizing, unraveling, and replacing complexity has begun to shine a light on how leaders think about complexity and how they recognize complexity in their organizations.
During our research we specifically asked executives how they recognize complexity in their organization. At a high level, they all made reference to the lack of speed in decision making and desired outcomes as being evidence of complexity. The analysis of their answers created five indicators that led executives to their conclusion.
Business performance – the ability to achieve results is a signal of a high performing organization. Of course, meeting your objectives does not necessarily mean that the business is not complex. On the other hand, continuously missing deadlines, key performance metrics, or even just your commitments are a signal that complexity is working its way through the organization.
Ambiguity – The lack of clarity slows down decision making and increases the number of interactions between people and departments. It opens up the opportunity for misunderstanding, interpretation, and misalignment. Creating clarity and building alignment was seen as key to success to many of our interviewees.
Employee engagement – Complexity creates a degree of frustration for employees. When complexity gets in the way employees find it difficult to understand why the organization doesn’t resolve the complexity and how the organization wants them to move forward. Complexity undermines individual employees in terms of understanding, empowerment, and learning.
Meetings – The issue of meetings was raised by almost all of our interviewees. Too many meetings, meetings to prep for meetings, and too many people are involved are felt to be indicative of complexity. Many of us have been in back to back meetings and wondered when am I supposed to get any real work done? In addition, the number of organizational layers in a meeting was called out as creating complexity along with poor meeting discipline, as this creates ambiguity and reduces clarity.
Accountability – The lack of accountability in organizations whether created by roles, organizational structure, or individual behavior adds to complexity. Siloed functions, combined with risk aversion, the fear of being wrong, and knowledge in the hands of the few are all indicators of complexity.
None of these indicators are evidence of complexity when experienced individually. It is when we notice multiple indicators that it becomes more of a signal than just a noise. Even then, the lack of a framework to discuss complexity makes it difficult for people to raise it as an issue, difficult for executives to take action, and difficult for the organization to adopt new ways of working together.
If you notice any of these indicators in your organization, or you have experienced them first-hand, please join the conversation and share your perspective.
Final Thought
As we discussed on LinkedIn recently, complexity is best evidenced by three things: how long it takes to get stuff done, how hard it is to do stuff, and how frustrating it is to be part of the process.
Most organizations go through a formal decision-making process when they allocate resources to a particular initiative or when they develop an annual capital plan. Whenever we chose to allocate money or people to something, organizations typically follow a familiar three step process.
Learn
During the learn phase we are gathering data, building knowledge, and curating information on both the problem at hand and potential solutions. Our goal is to articulate the problem, offer a series of potential solutions and maybe articulate a recommendation or a preferred option.
To achieve this, first we spend time to learn about the presenting issue. We conduct extensive research, do analysis, run focus groups and interviews to make sure we fully understand the issues and problems that need to be solved. In a nutshell, the goal is to figure out who our customer is, what needs they have, and how best can we serve them.
Second, once we have identified the issues, we can begin to look at alternative solutions. We analyze the various merits of each solution and develop a cost benefit analysis of each option so we can think about how to best make a recommendation. If our solution includes a third party, for example a piece of technology or software, we will likely do additional diligence to measure things like functionality, integration, and relationships. We’d be inclusive of different stakeholder groups so that we had the opportunity to obtain a broad set of inputs on the final set of answers.
Finally, we prepare our presentation with our findings and recommendation.
Decide
Decision rights for capital spending typically sit with an executive team or a subset thereof. The team doing the “learning” will make their presentation to the executive team and make their recommendation. Usually there is some back and forth discussion, maybe the team has to go away and answer some additional questions but eventually the decision is made to either support or not support the capital allocation.
Act
Once approval has been obtained the team can then move onto the implementation of the solution. The work to solve the problem can now begin.
The Problem
As you can imagine this governance and decision-making process takes a significant amount of time. There are four distinct problems with this approach.
First, with a fast-paced business environment and innovation driving new ways of working, new technologies, and new possibilities it’s more than possible to create capabilities that don’t meet future needs.
Second, the learn phase never quite achieves what you intend it to. There always seems to be a series of “gotchas’ during the act phase. These lead to budget overages, time delays, and the reduction of scope. This is because we don’t know what we don’t know and only through experience can we solve this paradox.
Third, the learn phase doesn’t typically consider the difficulty in driving adoption of a new capability. Skills may need to be developed, behaviors changed, and reliance on old operating procedures need to be undone.
Finally, according to the National Training Laboratory, action-based learning results in three times the retention and understanding as passive based learning, Acting therefore contributes more to learning than simply reading or researching.
An Alternative
One of our principles is to move into action sooner rather than later. We encourage clients to learn by doing so they can better understand the presented issues, potential solutions, and behaviors that will need to be changed to drive adoption of the new capability.
Another principle we live by is to break down a problem into more manageable chunks and work to solve each of them over time. This is grounded in the fact that you want to avoid any kind of “Big Bang” implementation. Better to implement a series of smaller changes rather than one large one.
We prefer a series of small success rather than a death march that results in mediocrity.
Our suggestion therefore is to change the governance and decision-making process to help improve adoption, reduce risk, and create momentum
With the overall goal in mind, work towards taking smaller steps, learn as you go, and then decide which appropriate steps to take next. This iterative approach allows you to uncover and resolve what you don’t know about what you don’t know.
Implementing a change in technology in an organization is never an easy thing. It is a complicated process which involves coordinating many moving parts, clear communication, and effective change management. As we discussed in our July 3rd blog post, Complex Versus Complicated, this type of business issue, whilst complicated, should not be complex. Why is that? The reason is that there are clear processes and tangible goals involved in transitioning a company from one technology system to another. Complexity is added only once people are factored into the equation. Let’s dive into this and see how people and more specifically behaviour add complexity.
Let’s take a real life example of this, the actors remaining nameless of course! A medium size international perishable foods production and distribution company had seen tremendous growth in the past decade with revenues and international presence expanding rapidly. In cases like these, it can be difficult for all parts of an organization to keep up. In this case, the company’s waste tracking system was left behind. Tracking waste during production gives an estimate as to how much actual inventory a company has post-production. Initially, the company’s original system would estimate how much waste occurred during production by using relatively simple, general projections based on previous years’ data. However, as the company expanded, it was no longer able to produce accurate estimations of how much inventory was actually available and was consistently underestimating the amount of waste during production. More production locations, more workers, more machines, more storage locations, and more transportation services all provided opportunities for increased waste.This consistent inaccuracy had implications throughout the organization, production orders were too low and profit projections were too high. This was the business imperative that resulted in the company identifying and implementing a new waste tracking and inventory estimation system. The new system, WasteTracker, would help identify and accurately measure specific points of waste along the production line. Working hand in hand with WasteTracker, the company began to integrate the new system. This was not a simple undertaking, as employees had been using the old system since before the company experienced its rapid growth.
Integrating the new system meant switching from relying on relatively simple overall projections to operating a more sophisticated program which identified waste points along the production line in detail. This meant employees needed to be retrained. Programs needed to be installed. Projections would have to be recalculated. These tasks, however, could be approached intuitively and methodically.
The transition to a new technology system as described above is clearly complicated, but it is not necessarily complex.
The complexity began once the change in systems was introduced to the people that would be using it without clear communication about its purpose. In this case, management did not allocate sufficient time and resources to ensure effective communications as well as a change management process to streamline and accelerate user adoption. Without proactive management, human behavior will often certainly lead to questions without clear answers.
Whenever you introduce new technology, employees face difficulties and challenges. In our example, some employees struggled to learn how to use the system, others were fearful that they would become redundant, and others were simply mistrustful of the technology. This is when and how complexity begins to materialize.
Key questions that arise from this example that we can all learn from.
How might management have helped employees to adopt to the new system, processes, and procedures?
For those employees whose role was changing, how should this have be handled productively and proactively?
In what manner can management enforce the use of the new technology?
What could management have done to address change management issues well in advance of implementation completion?
While these questions may be frustrating and time consuming to deal with in the midst of a large technology implementation, it is far more costly to leave them unanswered or simply hope things will sort themselves out. An employee struggling to learn and use a new system means they are completing work much less efficiently than they are otherwise capable. An employee fearful for their job may become less focused on their work. They might also, unconsciously, or consciously, spread their doubt to others. A worker still completing their work the ‘old way’ will be desynchronized with the rest of their team. Time will have to be spent reconciling their work with the new system. While installing a new system may be a straightforward exercise, getting employees to learn and adapt to a new system can quickly become complex.
Initially, the implementation of the new system was complicated, not complex. This was because there were straightforward processes and tangible goals. Complexity quickly emerged once human behavior was introduced without any mitigation from project leaders and management.
Lesson learned: introducing people problems, unless managed and proactively guided, causes complexity that can derail success.
Does change management exist in your organization and what does it look like?
Last week’s blog post focused on the differences between complicated and complex. Our view is that the distinction is useful when approaching issues, designing solutions and driving adoption. Complicated and complex issues require different skill sets, approaches, and techniques to solving them.
This week we thought we would address the other side of the continuum; simple versus simplistic.
Merriam-Webster defines the word “simple” as “not hard to understand or do.” Simplicity can be described as clear and lacking in pretense. The adjective “simple” means plain, easy, ordinary, or uncomplicated. A simple solution to a problem is usually a good solution….It’s probably no shock to you that we are big fans of the acronym KISS.
“Simplistic,” meanwhile, is defined as “too simple” and “not complete or thorough enough.” The adjective “simplistic” generally has a negative overtone generally meaning “ overly simplified”. The important nuance being that it is characterized by extreme and often misleading simplicity. As we have been digging through this topic it struck me that people use the two words interchangeably these days.
Simplicity before understanding is simplistic; simplicity after understanding is simple.
Edward De Bono
Simplistic sounds so much fancier than simply saying “simply”!!! Yes, both “simple” and “simplistic” come from the same root, but the latter is considered an excessive example of the former. In other words, too much of a good thing! It’s really important to understand that they could not be more different. We are working with that realization because it is core to our mission at Occam’s. When you weave the understanding of the difference between simple and simplistic into your behaviour it will result in enhanced personal and professional interactions and relationships.
In terms of individual behavior we typically see examples at different ends of the Simple vs Simplistic spectrum as well as all the way across the spectrum.
Let’s start with the Simplistic end of the spectrum. Simplistic statements and behaviour are shallow with no depth. Descriptions and statements are broad and generic, quickly articulated and also easy to understand. Take a moment and put yourself in a scenario where you were delivering a message or action and you oversimplifed both the issue and the potential solution. I’m going to ask for some soul searching and self reflection with this next question. In those instances did you feel that you stepped into the situation where you were basically “winging it”. The reasons for it could be one or more of many: as a lack of comprehension or understanding of the facts, driven perhaps by prioritization, time constraints, and inexperience? Alternatively, you receive updates and requests from others that leave you with the sense that its now up to the rest of us to go figure it out!!
If you can’t explain it simply, you don’t understand it well enough.
Albert Einstein
The higher up you go in the career ladder the easier it becomes to slip into the art of being simplistic without even realizing it. When interacting with others its easy to slip into the excuse that your time constraints don’t allow you time to dig into the details or debate something. As a consequence it’s inevitable that you begin to come across as shallow or even dismissive.
So let’s reset with this thought: It’s not easy to be simple, but it’s unbelievably effective. On the other hand it is easy to be simplistic. The two are very different and should not be confused. However, how do you get from simplistic to simple? Because the reality is whilst you do have to start with being simplistic the reality is that you can’t end there.
Make it simple but significant.
Don Draper
The trick is to invest time in yourself. In every area of what you do and what you aspire to be you have to go from the simplistic level to a deeper dive so that you become real and credible. After a while this process becomes an integral part of who you are and how you operate and this results in a level of credibility, trust and influence that becomes part of how you are perceived and respected.
How would you self assess your behaviors on the simplistic to simple continuum?
We are a firm focused on recognizing and unravelling complexity in favor of simplicity. We analyze the tenets of success and outcomes and identify ways in which human behavior helps drive, or hinder, adoption and overall success.
A fundamental belief that we hold is that complex and complicated are two different concepts. Most executives bring the same set of skills to the table when dealing with both types, not understanding that they require different approaches.
Overall success and adoption of a new process, idea, or technology depends on your behavioral approach to solving the problem. So let’s sort this out once and for all.
Complicated is defined as ‘the state or quality of being intricate or involving a lot of different parts in a way that is difficult to understand.’
Complicated problems can be hard to solve, but they are addressable with rules, recipes, and algorithms. They also can be resolved with systems and processes, like the hierarchical structures that most companies use to manage work, employees, and outcomes.
Complicated is relatively intuitive and follows most normal scientific rules. Whilst experience helps in resolving complicated problems, logic, a process orientation, and an ability to research a topic are mostly what is required.
Complex, however, is defined as something ‘consisting of many different and connected parts and not easy to analyze or understand; complicated or intricate.’
Complex problems involve too many unknowns and too many interrelated factors to reduce to rules and processes. A technological disruption like blockchain is a complex problem. A competitor with an innovative business model, an Uber or an Airbnb, is a complex problem. There’s no single strategy that will tell you how to respond predictably everytime a new competitor enters your market.
Complex issues are more difficult to diagnose and harder to understand. There is no apparent reason for a complex issue, they result in different outcomes, and they don’t follow any recognizable rules or scientific basis. With individual characteristics of the problem interacting in unpredictable ways, solving a complex issue is demanding.
Most of us use the two terms interchangeably and without realizing that they are, in fact, quite different.
By way of example, consider the flight of Apollo 13 in April of 1970. Flying to the moon and back is a complicated issue, but it isn’t complex. The objective can be broken down into its relevant component parts and each solved based on logic, calculations, and rules of nature. Space flight is repeatable and, for the most part, predictable.
The accident, that occurred two days into the flight, which involved the failure of an oxygen tank in the service module, was a complex issue. Faced with insufficient oxygen for the remainder of the mission, the lunar landing was aborted and the crew and mission control began to work on procedures to bring the crew home alive.
All of a sudden NASA had to switch from a complicated problem to a complex problem. The data they were receiving about the issue and possible implications were unpredictable and variable. There was no clear path to safely make the return journey to earth. They had enough oxygen for two people for 45 hours when they needed oxygen for three people for four days. Cooperation between ground and crew, innovative problem solving and the trust between astronauts, operations, engineers, and designers were just some of the reasons attributed to the successful reentry and splash down in the Indian Ocean.
Most of us are accustomed to solving complicated issues. Grade school, College, and Graduate School all prepare us for primarily solving complicated issues in the workplace. When we arrived, there were plenty of problems for us to tackle. But during our lives and careers, these complicated issues have morphed into complex ones.
Today, leaders and future leaders have to worry about both running the business and reinventing it at the same time. Change approaches our organizations at a frightening pace and, as it gets closer, it brings with it new expectations, experiences, and assumptions. There is no indication that in the next decade or so that this change will slow down. If anything, it will become broader, deeper, and faster. It’s not going away.
Attribute
Attribute
Complex
Context
Recognizable, break/fix, Inside out
No clues, broader, behavioral, outside in
Relationship
Linear cause and effect relationship
Multiple unrelated inputs and disproportionate outcomes
Predictability
Predictable, logical, and repeatable
Unpredictable and variable
Control
Easy to diagnose and control
Manage and iterate
Ambiguity
Straight forward
High degree of ambiguity
Approach
Learn. Decide. Act.Experience and judgement
Act. Decide. Learn.Diverse team and experimental
Techniques
Process engineering, segmentation, root cause analysis, Right to left thinking
Scenario planning, what if analysis, pattern recognition, multidiscipline, hypothesis driven
Skills
Process orientated, Analytical, Technical, Functional, Project Management, Common sense
Adaptability, Collaboration, Critical thinking, Empathy, Innovative, Sensing, High EQ
Learning to unravel complex issues requires a different set of skills and the ability to ‘switch’ between two different types of problems. Complexity tends to be holistic in nature, it may involve different departments, business units or even business entities. The ability to engage, collaborate, and co-create is of paramount importance. Complex isn’t about getting better at something, it’s about changing the way you achieve something.
Spending time determining the right answer to a complex problem is unlikely to be a winning strategy. In dealing with complicated issues, there is often a high degree of alignment to the solution and the solution has a high degree of certainty or predictability. Complex is the opposite. Complex problems may have more than one answer and multiple ways of getting there.
When thinking about preparing your organization for the complex challenges ahead consider the following:
Recognize and understand the difference between complexity and complex problems
Develop skills to support both types; either individuals or teams
Create a diverse workforce with different backgrounds and experiences
Provide guidance but don’t constrain
Begin to unravel existing complexity in your organization
Find opportunities for your team to practice
Put in place a sensing and scenario planning group
Launch experiments and learn
No doubt the business and commercial environment is going to substantially change over the next decade. With that comes opportunity. Standing still while the global business environment changes around you carries more risk than grasping the opportunities. Taking small steps, building capability to unravel complex issues and learning as you go will help you build competence, confidence, and ability so that when you need to you are already prepared to take action.
We’d love to hear from you.
Do you approach complicated and complex issues differently? How are you preparing for the future? We’d love for you to share your reflections.
Organic growth increases the number and types of customers, products and suppliers within an organization. This adds both revenue and cost to the operating model but does so in a way that is consistent with the operations of the business. This type of growth maybe complicated but it isn’t necessarily complex.
Complicated issues are defined as ‘the state or quality of being intricate or complicated.’ Complicated issues are intuitive, have patterns and follow a set of rules. They can be resolved by breaking down the problem and understanding the cause and effect and implementing a solution. You can solve complicated issues in a repeatable manner.
Complex issues, however, are defined as something ‘consisting of many different and connected parts and not easy to analyze or understand.’ Complex issues are more difficult to diagnose and may have no rational explanation. They don’t follow any set rules or laws and are unpredictable in terms of outcomes. Examples of complex issues would include managing employees, merging two companies, or adopting a diversity and inclusion program.
As an organization grows it may become more complicated but it shouldn’t become more complex.
If you are a chocolatier, you’re operating a pretty simple business. Chocolate typically has five basic ingredients; Even when you make different chocolate varieties and different packaging for seasons, size etc it may become complicated but it isn’t complex.
Growing your chocolate business by acquisition on the other hand can become fairly complex. Your target acquisition needs to be receptive to the idea, at a price and terms you both can agree on. You need to agree on the benefits of joining forces and be able to persuade shareholders, customers, employees, suppliers, and regulators that it is a good idea. The successful pursuit and integration of an acquisition is a complex issue. Think about trying to grow this business by acquiring Artisan chocolate makers, which these days is so often the case for the major chocolate manufacturers!
Let’s switch gears and look at the US airline industry. Southwest Airlines began services on June 18, 1971, with three Boeing 737 and has predominantly operated the Boeing 737 for 49 years. Their strategy of operating only one type of aircraft for 49 years helped reduce the impact of complexity of their business and helped keep their operating costs one of the lowest in the industry. Even after acquiring AirTran Airways, Southwest chose to lease Airtran’s fleet to Delta rather than create variation in their flight operations.
Compare them to American Airlines who operate 20+ aircraft from four different manufacturers and you begin to see the difference in complexity between the two business models. Activities such as hiring, training and re-certifying a pilot to operate an aircraft may be complicated but it isn’t onerous. Even assembling and distributing safety manuals isn’t difficult. However, the operation of a business model which involves so many different skills, pay scales, seniority, operational procedures, and aircraft and you begin to see how complicated becomes complex.
Leaders, like Herb Kelleher, Southwest Airlines founder, make choices grounded in simplicity. Other leaders, over time, make choices that impact the shift from complicated to complex. In moving from complex to complicated we are adding future costs to our organization; costs that are not necessarily variable and certainly difficult to manage.
CASE STUDY – COMPLICATED TO COMPLEX
A large fresh produce distributor managed their entire revenue cycle on Excel. Developed by an excel guru when the business was small, this sophisticated set of worksheets continued to track orders and sales even as the company grew exponentially over a five year period. While perhaps not the best option, it worked. For a while. With no significant change to the revenue management system the spreadsheet soon became difficult to open and even harder to navigate. Only one person, the original creator, fully understood the mechanics of the reporting tool. Complicated had become complex and the business created a single point of failure as financial reporting became increasingly dependent on a single employee. What would happen if he were to leave? How would someone new be able to learn the intricacies of the spreadsheet? How long would it take? In the meantime, how is management able to effectively rely on, or judge, the insights without any ability for review?
As organizations become increasingly complicated we need to watch our for shifts to complexity. These shifts often create risk, add future costs, and reduce reliability.
Complexity is also one the largest sources of disengagement in the workforce. Complex operational issues make it increasingly difficult for employees to be successful. Complexity leads to ambiguity, misinterpretation, and misunderstanding which in turn results in a ‘me vs we’ attitude. In addition, complexity leads to a culture of restraint and mediocrity which negatively impacts productivity, efficiency, and effectiveness.
Leaders should consider not only how they are building their organization but how to do so with a view to minimizing complexity. Often we respond to growth by simply layering on top of our existing procedures a new set of activities and responsibilities. We don’t look at the organization and ask what was necessary before that we no longer need today. Looking at the organization with a view to unravelling the complexity that was previously laid down will go a long way to help improve bottom line results as well as employee engagement and job satisfaction.
Four tips to help unravel complexity in the moment
We use cookies and other tracking technologies to personalize content and analyze our site traffic.
More information about this is in our Privacy Policy. You can control third party cookies by adjusting your browser settings.
This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
