Failed Approaches in Response to Complexity

The responses most organisations are making to the challenges of today’s commercial environment can be summarised as:

1. Doubling-down – more of the same
2. Short cuts – looking for quick fixes
3. “Long” cuts – investments to pay off later

In many cases, organisations are adopting all three responses at the same time:

However, as is already evident in most cases through the (lack of) results, these responses aren’t just sub-optimal: they actively make things worse and are doomed to fail.

Why? Because they fail to understand one or more (often all) of:

• Complexity – how it accounts for and explains today’s intensifying challenges and guides how to respond to them effectively, rather than trying to control or sidestep them.
• People – how to recognise and best support how they need to think, organise and work in this complex environment, and which people need to be on board to make change happen.
• Value – how it is primarily subjective (going far beyond price and cost), how it can be understood and managed, and why it is the only effective and appropriate principle by which to navigate complexity.

Conventional Approaches Don’t Take Complexity Into Account

Conventional approaches have their place: nobody is suggesting that contracts should go in the bin, that standards have nothing useful to say, and so on.

However, the way they are currently being used fails to recognise the reality of Complexity and attempts (but fails) to work against it – instead treating reality as “complicated”: 

This involves a set of fatal (albeit usually subconscious) misassumptions about the challenges faced:

• That they are knowable, and can be anticipated, mitigated against and “solved”.
• They can be clearly defined, are mostly tangible and remain static.
• They are the sum of their parts.
• That effectiveness in response requires prioritising efficiency and optimisation.  

We have got here for several reasons:

• Human beings prefer order to “disorder”: we want things to be predictable and controlled, and we like (and take pride in) resolving challenges.
• This basic human trait has been further accentuated by the scientific method – reflected in the business world by Scientific Management – and by the Industrial Revolution, where scientific advances led the world to be understood principally as a “machine”.
• There are absolutely times when this more “mechanistic”, “command and control” approach absolutely makes sense, e.g. where things are predictable and unchanging, with optimisation and efficiency paramount.

However, today’s environment and strategic relationships are dominated by the fuzzy and subjective, the unknown and the unpredictable, and by constant and rapid change.

Conventional Approaches Make Things Worse

Conventional approaches, as they are typically used, therefore create huge inefficiencies and waste:

• Standards and best practice guides: these are ever more detailed and to be implemented in full, by everyone – the assumption being that “a rising tide will float all boats” – but usually with little nuance for specific circumstances, such that resources are squandered. 
• Organisational hierarchies: these are fixed and create bottlenecks at the “top” through which everything must flow “down”, delaying and distorting flows back “up” from the ground.
• Formal processes and structures: these artificially constrain information-exchange, networking and action, all of which need to be dynamic and rapid to encourage innovation, change and agility.
• Behavioural training: this implies that it is the people that are at fault – not the approaches and tools in use, from which behaviours emerge – which misses the point and actively demoralises people.

Even the pursuit of technology usually involves a sense that all situations are ultimately reducible to a challenge of analysis and processing, with responsibility significantly “abdicated” to a “system” – both again missing the point and squandering the human intelligence available.

As a variant of the quote often attributed to Einstein puts it, “We cannot solve our problems with the same thinking we used when we created them”.

A new approach is needed to respond appropriately to Complexity – one rooted in Complexity itself by being centred on People, and led by Value.

That approach is Value Management.