You can listen to the post:
Isn’t it amazing how complex scenarios can be so challenging to handle? Our brain can efficiently handle simple situations but struggles when dealing with multiple elements and connections. Our first instinct is often to break down complexity into smaller, more manageable pieces. Unfortunately, this approach doesn’t always work when dealing with complex problems.
As we look back over the last decade, a staggering 90% of recurring business problems, such as customer satisfaction, employee retention, supply chain management, safety, and more, are complex problems. So what’s the solution? It’s simple: we need to understand complexity! We must understand what creates complexity and the working conditions needed to deal with it. Admittedly, this requires different tools than we’re used to. It involves synthesizing or understanding how elements fit into a more extensive system.
But don’t worry; in this series of posts, I will help you understand those conditions, the thinking, and the tools in simple terms. After each post, you’ll better understand complexity, which will translate into better business performance. And if you still have questions, feel free to post a comment on any post in this series.
In this post, I’m going to share a simple way to find out the three conditions that cause complexity in any problem. Knowing what generates complexity won’t eliminate it, but it will help to reduce it.
The first condition is multiple competing drivers. Every organization has at least one driver that guides people or parts of a system’s behavior. The more drivers that push people in different directions, the more complexity is experienced. To reduce complexity, you must first find all the conflicting drivers that guide the area you are trying to improve or resolve a challenge. Please list agents in your area and explain the factors affecting their behavior.
For example, imagine a production line focusing solely on the quantity produced. This line will be less complex than a line that focuses on quality and quantity, and a line that focuses on quality, quantity, and safety will experience even more complexity. Today’s organizations usually have 3-5 conflicting drivers. If you find more than five drivers in a given situation, you are probably dealing with higher-than-normal complexity. If it’s possible to reduce drivers, you will have a direct impact on the level of complexity you are dealing with. However, in most cases, there is a sound reason for competing drivers, and it’s impossible to reduce them.
The second condition is external noise. Every system, including companies, operates within an environment. For businesses, the environment includes customers, competitors, vendors, regulatory bodies, pressure groups, and more. Although a company has some borders that distinguish it from other players in the environment, it is not a closed system. Like any other system, companies operate as open systems that are susceptible to the influences of their environment. The amount and frequency of influence from the external environment is what we call external noise.
External noise can be positive or negative. It can drive continuous change, forcing companies to evolve and move away from the status quo. However, too much external noise, such as frequent changes in demand, commodities prices, variety of competitors’ offerings, customer behavior and preferences, laws and regulations, and fundamental changes to the environment, can contribute to the level of complexity. While the drivers create the basis for complexity, external noise shakes the system and increases the interconnectivity between agents. Therefore, too much external noise contributes to the unexpected behavior of any group of people and the system.
To reduce the amount of external noise, you must first collect external events that are increasing in frequency. Understanding external events will help you gain visibility into the most relevant external events in the area you are investigating. If there is a better way to organize a company to deal with external noise, or there is an option to reduce the amount or frequency of external events, take advantage of it.
In summary, complexity is fascinating but doesn’t have to be overwhelming. You can reduce its impact by understanding what creates complexity and the working conditions needed to deal with it. Remember, the more you know about complexity, the better your business performance will be. So stay tuned for the next post, where I’ll share more tips on how to handle complexity in your organization. With a little effort and the right mindset, you can easily tackle even the most complex problems!
