Organizational strategies for coping with complexity

In order to cope with, and manage, ever more complex business environments, companies have, themselves, become ever more complex.

From centralized hierarchical structures through divisional, matrixed, agile, and now networked models, business has layered system upon system upon system. Today, most companies are awkward amalgamations of several of these models operating simultaneously.

Yet in many ways, these are all still manifestations of a brute force approach, an attempt to resolve complex and blurry problems into an increasingly smaller series of simple and well defined components. It’s the application of industrial-era thinking towards solving post-(post-)industrial problems. Because while productivity and efficiency are no longer the aim of most businesses, these organizational structures are still fundamentally designed around those as the goal.

But, clearly it’s not working. In most large companies, the complexity of these structures is so overwhelming that new employees talk about “learning the system” and often spend months understanding how to get things done before actually doing anything. Even when the system is learned, the ratio of time spent managing and navigating the system is greater than the time spent on the core activity of the business.

The fix for this problem may require a complete overhaul of business but in the meantime, there are some principles which seem to be pointing in the right direction.

A fractal approach to company structure: Rather than looking at every part of the company the same lens, it’s more helpful to think about a company comprising self-similar patterns that repeat at various scales. Coherence happens at the highest level rather than the lowest which can require a willingness to endure some level of daily chaos.

Temporary internal organization: Internal structures are often only useful as long as a task is relevant. Many companies are shifting to temporary structures which emerge bottom-up in response to a need and then dissolve when that need is gone.

A rejection of process: Like an algorithm, process works well upon clearly defined variables and clearly defined inputs and outputs but few things in business deliver this kind of clarity. While rejecting process seems counterintuitive, it often results in people applying more thought and creativity towards solving problems which can dramatically improve the effectiveness and efficiency of the solution.

Organization around task not team: Fixed teams almost always contain members who are unnecessary or even harmful to the specific task at hand. Organizing around a task builds teams specifically for a goal and brings the added benefit or requiring the rigor of defining a goal before the team is assembled.

Employees tasked with a high level of intellectual autonomy: While there is a lot of rhetoric around empowerment, practice does not back it up. Most companies have subtle and not so subtle penalties for thinking too much about what to do and how to do it. This has led to a universal expectation that “someone else” is responsible for telling me what to do. Making it very clear to employees that they are required to figure it out and removing barriers such as structure, process and hierarchy can be liberating for some people and terrifying for others. Clearly this also requires a high-bar for and a non-traditional view of talent.

A strong, inspiring, emotional and clearly defined brand: While many of the above principles serve to deconstruct order within a typical company, the brand delivers coherence. increasingly the role of a brand, brand purpose and brand experience principles, are to guide actions and decisions inside a company more than to shape the perceptions of customers outside the company. A brand creates an emotional framework for understanding what is right and what is not within the context of how that company behaves. It establishes a higher order goal under which many smaller goals can and should live. It also creates a series of cultural conventions which bind employees together creating more alignment than can be gained through structure and process alone.

Presently, lots of work and attention is being devoted to re-wiring the corporation or to creating the operating system for the company of the future. Yet perhaps the above principles suggest that there is no wiring nor operating system required. Perhaps the companies of the future will resist this kind of infrastructure as strongly as the companies of the past depended upon it? What do you think?