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Leaders are typically well-attuned to external complexity. However, the real danger arises when external complexity is met with internal complexity. The result is complexity squared (C2) and it can feel chaotic.
Internal complexity has major bandwidth implications, it drains time and resources. To prevent complexity from becoming chaos, requires greater speed, agility, collaboration and innovation. The temptation, however, is to become more rigid, rather than agile.
The Age of Complexity
Complexity is a byword for the modern age. Yet, the full extent of complexity can be difficult to grasp. While leaders are typically well-attuned to external complexity, many are blind to high levels of internal complexity and its implications.
External Complexity Is Obvious
Everybody ‘gets’ EXTERNAL complexity. It stems from market-related factors… Technology, regulation, competition, etc. At a time of accelerating change & market uncertainty, this external complexity is on the rise. Even once stable industries face changing customer needs, blurring industry boundaries and the emergence of new technologies.
Although it gets all the attention, the external environment is only one part of the complexity equation. Often overlooked but critical is: Internal Complexity.
Internal Complexity is Hidden
Internal Complexity derives from within the organization. It stems from the realities of working in a large organization incl. bureaucracy, hierarchy, silos, etc. and is rooted in an organization’s ways of working, planning budgeting, managing, reporting, etc.
Working within a large organization is inherently complex. As organizations grow in size, bureaucracy & hierarchy take over, slowing down response times & stifling innovation. That is a problem when the business environment demands speed, agility, collaboration & innovation.
In the transition ‘from the entrepreneurial to the organizational’, bureaucracy and hierarchy take over. The founder’s ‘just do it’ mentality is replaced by committees, planning cycles, budget approvals and sign-offs. The speed of response to any change in the market falls greatly, so too does the appetite for risk and the ability to innovate.
Internal complexity determines how well an organization can adapt or even profit from external change and uncertainty. That is because it determines the level of speed, agility, collaboration and innovation that is possible.
Internal complexity has major bandwidth implications, it drains time and resources. For example, busy executives complain that up to a third of the working week is spent on internal meetings (emails, IM, etc.) that add little, or no value. That is time that they could be spending on making it more difficult for people to get stuff done. In particular, more ‘strategic stuff’ connected to key priorities, projects and initiatives.
Internal complexity has major bandwidth implications – making it more difficult for people to get (strategic) stuff done.
High levels of external or marketplace complexity are not necessarily a problem. Indeed, they make present as many opportunities as challenges. Of itself, high levels of internal complexity aren’t necessarily a problem either.
However, combine high levels of external complexity with high levels of internal complexity, and it can start to feel chaotic or out of control. That is unless we respond with agility, rather than rigidity.
Typically, external change & complexity was seen as the enemy. Yet, external complexity, in the form of dynamic unpredictable markets, presents opportunities, as well as challenges. In Darwinian fashion, some organizations will adapt, perhaps even profiting from change and complexity, while others will not.
Internal complexity doesn’t just add to external complexity. It has a multiplier effect. The result is what we call C2 (or Complexity squared).
…combine high levels of external complexity with high levels of internal complexity, and it can start to feel chaotic.
This insight emerged from strategic conversations with business leaders on the requirements of delivering today’s performance & tomorrow’s transformation. It is part of our most exciting research yet:
When Complexity Feels Like Chaos
Problems arise when high levels of eternal complexity meet high levels of internal complexity. That is because high levels of internal complexity make it difficult to swiftly adapt to, and profit from, market change and uncertainty.
Although changing external conditions demand speed and agility, they find themselves tied up in knots. Or to be more precise, executives find themselves tied up in meetings, bureaucracy and paperwork.
“The problem is not with our organizations realizing that they need to transform; the problem is that organizations are using managerial frameworks and infrastructure models from past revolutions to manage their businesses in this one’.
Complexity Squared: Recognizing the Chaos
When an organization is operating at C2, things can start to feel chaotic. Here are some of the symptoms:
- People complain that it is difficult to get stuff done
- People are very busy and getting even busier still
- People are pulling in different directions
- There is a lack of clarity regarding priorities and even results
- There are lots of competing projects and priorities
- There is a scramble for resources
- People don’t have time to think and there is a lot of fire-fighting
- There is a lot of noise and interference
- Bureaucratic procedures and processes are on the rise
- The length of time required to make decisions and get approval is increasing.
Can you notice any of the above symptoms within your organization? If yes, then you are likely experiencing C2 levels of complexity. Your organization’s ability to adapt or profit from change & disruption is likely to be affected. Levels of speed, agility, collaboration and Innovation are likely to suffer.
Paradoxically, C2 is the scientific notation for the speed of light in a vacuum. However, nothing kills speed like internal complexity characterized by hierarchy, bureaucracy, silos and traditional ways of planning, budgeting and working.
‘The world has become more complex but that in itself is not the problem. The problem is the layers of complexity organizations have put in place to deal with it’.
Yves Morieux and Peter Tollman2
‘It is beginning to feel a bit chaotic around here’, said the member of the Leadership Team. ‘The busier we get, the more difficult it is to make real progress, and the more we seem to be pulled in different directions’, the director continued.
Read the full story here.
- Mik Kersten, ‘Project to Product: How to Survive and Thrive in the Age of Digital Disruption with the Flow Framework’, IT Revolution Press, 2018
- Yves Morieux and Peter Tollman, ‘6 Simple Rules‘, Harvard Business Review Press, 2014.