FINDING THE COMPLEXITY LENS

When it comes to discussing the complexity lens, I find it is wise to start with examples of practical applications because the concepts behind it are born out of natural science, mathematics and physics, and many managers struggle to see them as anything more than theoretical and not relevant in the “real world” of business. This is an understandable but unwarranted view.

My introduction to many of the key principles came during my first job out of graduate school. The position was with a technology infrastructure company. I was assigned to a division that provided an ancillary software product that’s purpose was to increase client loyalty. The reality was just the opposite. Thanks to this “strategic” product:

  • The CEO experienced calls from irate clients at 4am
  • The business was constantly in a firefighting mode
  • The company spent thousands (if not millions)
  • servicing client issues
  • The divisional leadership changed annually
  • Employees wanted to transfer the minute they arrived
  • No one truly believed in the product despite the fact
  • that it was pretty good

When I arrived, I was immediately unpopular. It was not personal but an example of how messed up the situation was. The group had requested a web developer to assist with product enhancements and received a useless MBA-type instead. When the newest VP was assigned to the division, I ranted that a full change management program was necessary. Things were clearly broken and there was no easy fix. To my dismay, he agreed and put me in charge of the effort (oops).

I will not go into the details of the very painful process, but the essential problems we identified were:

  • The product was very complex: It was tasked to fit all the needs of clients no matter their size or needs. For most clients, it was overkill.
  • Top tier clients demanded custom solutions: Each customization added additional processes and created unending product variations.
  • The support processes were inflexible: They were the same no matter the situation and, therefore, inadequate in most cases.
  • The culture was stuck in firefighting mode: The most positive praise that a person received was that they exhibited “superhuman” effort to resolve client issues and went “beyond the call of duty.” People were frustrated and exhausted.

After a long effort, much debate, and many failures, we decided to distribute the effort into four groups based on client segment. Each group developed their own approach to meet the clients’ needs and their own work preferences. Here is a quick summary of the resulting self-organization:

  • Group A managed the top ten clients. It consisted of seven volunteers who were among the most capable, flexible-thought leaders in their functional areas. They called themselves a SWAT team because they were ready to leap into action, travel anywhere, and work in all conditions. Along the way, they customized solutions for clients which would then drive product development for the rest of the organization.
  • Group B, the largest, managed the majority of clients and the standard product “shrink wrapped” offering. Support remained at the HDQ and was staffed according to expected volumes and tooled to resolve issues remotely. New applications developed by the SWAT team were assimilated in the standard product when appropriate.
  • Group C intended to manage the Mom and Pop clients, but in the end, they decided to set up a referral desk that sent clients to an outside vendor who better met their needs. The group consisted of just four people who worked in shifts.
  • Group D, the central team, focused on administration, reporting results, getting groups A-C the tools they needed, and creating a knowledge bank of best practices for everyone’s reference.

The result was a transformed organization:

  • Late night calls to the CEO stopped almost immediately
  • 84% improvement in measureable customer satisfaction in year one
  • Attrition rate of employees slowed by half
  • A new mid-tier solution was developed from solutions created by Group A
  • The company purchased their top referral partner for Mom and Pop clients

I would like to say that these results were due to a deep knowledge of applied complexity theory, self-organization, and emergent behavior. The fact is, these solutions were born out of frustration. We had labored long and hard to make changes with little result. So, rather than continue in the same vein, we changed course and delegated the work to the four groups. We gave them their goals, a few parameters and some tools and set them on their way with our fingers crossed. We did not manage them.

They created their work environment and methods. Of course, this is not a perfect example because we were working without knowledge of the principles we were applying. Moreover, what we accomplished is akin to a controlled lab experiment. This division was able to adopt these changes because it was largely isolated from the rest of the company and in a desperate do-or-die situation. We could have tried anything and it would have been accepted. We did not manage them. They created their work environment.

There are many other examples of practical success stories employing the principles of Complexity Management. In researching this article here are just a few that I discovered.

In his book Complex Adaptive Leadership, Nick Oblensky lists several examples including:

  • Revco Drugstores applied self-organization and emergent behavior in their warehouses and saw a 34% increase in productivity
  • General Motors uncovered $1.4M in their paint operations through application
  • John Deere used the principles to grow employee perception of the organization and improve operations
  • Zappos.com is a company that has recently embraced Holacracy on a grand scale announcing that they will become a “Teal” organization as described in Reinventing Organizations by Frederick Laloux.
  • Uber, the mobile car transportation company, is a company almost entirely based on self-organization and emergent behavior in my opinion. They have no way of knowing where their clients are coming from or where they are going and they have a work force that chooses when and if it works. Yet, from all this chaos rises a very successful and disruptive business model.

Still, to me, the most observable example validating these principles comes through the formation of “shadow systems” as described by Ralph Stacey, of Hertfordshire Business School. These are the informal groups that form in organizations when the leadership is failing. Anyone who has worked for a dysfunctional company has seen this process in action. These shadow groups become the only way to get things done and achieve goals.

The discussion of practical, successful applications is an important one. Many people intuitively see how these principles work. Despite the growing number of proponents, however, there are many people who believe that when you “get religion” around complexity, you see its principles applied everywhere no matter the truth of it. This view is why it is necessary to continually report measurable results where the principles were intentionally and knowingly applied.

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