Tag: Managing Complexity

The embarrassment of complexity
by Helga Nowotny

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This is the full text of the opening keynote by Prof. Helga Nowotny at the 5th Global Peter Drucker Forum.   1.   The embarrassment of complexity begins when we realize that old structures are no longer adequate and the new ones are not yet in place. Currently we are in a transition phase. The old never yields to the new in one precise moment in time and this is what makes transition phases exciting, risky – and sometimes embarrassing.   The sheer multiplication of networks of various kinds and the unprecedented density of interactions generated thereby has opened access to information and information sharing to a multitude of new users.   So has the […]

Developing Leaders for a Complex World
by Tamara J. Erickson

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Presentation to the 5th Global Drucker Forum 2013   The complex and ambiguous conditions of this century are unlikely to respond to the old school of leadership. Old norms were honed in a different environment – one in which it was perhaps easier to view one position as right and the other wrong, easier to predict, to forecast, to control.  But despite today’s complexities, many notions of leadership remain deeply embedded in the conditions and assumptions of the last century.   What perspectives and skills are needed to lead organizations today?  How do we help future leaders develop?   The answers require recognition of a shift that is occurring at three levels:  in the nature […]

A Brief History of Complexity and the Mechanisms of Resilience
by Liviu Nedelescu

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Resilience will receive a lot of attention as the complexity of our world increases. Below is a brief description of the logical correspondence between complexity and resilience, followed by a succinct primer on mechanisms of resilience. But first, a bit of history is in order.   Before the Industrial Revolution reliability wasn’t a granted thing. The whole concept of craftsmanship was intrinsically tied to the idea that the quality of the output varied widely with each individual. This lack of uniform standards meant that the benefits of scale economies were out of reach. The big invention fostered by the Industrial Revolution was reliability (arguably at the expense of craftsmanship). Process and procedures become more important […]

People-centric Neural Networks: The Key to Managing Organizational Complexity
by Lukas Michel and Herb Nold

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Or Be Like the Borg Collective and eliminate viruses   Organizations around the globe in all sectors continue a trend of increasing size and complexity that began over 100 years ago with the business strategies of the likes of Carnegie and Rockefeller. New and emerging technologies for communication and data sharing have accelerated this process in recent decades. We view this process as a natural and inevitable occurrence due, if for no other reason, to simple economics. Expenses will rise through time in many ways that management cannot prevent no matter how much they try. Those pesky employees always seem to want and expect raises, healthcare expenses increase, rents go up every year according to […]

Managing Complexity: The Battle between Emergence and Entropy
by Julian Birkinshaw

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The business news continues to be full of stories of large companies getting into trouble in part because of their complexity. JP Morgan has been getting most of the headlines, but many other banks are also investigation, and companies from other sectors, from Siemens to GSK to Sony, are all under fire.   It goes without saying that big companies are complex. And it is also pretty obvious that their complexity is a double-edged sword. Companies are complex by design because it allows them to do difficult things. IBM has a multi-dimensions matrix structure so that it can provide coordinated services to its clients. Airbus has a complex process for managing the thousands of suppliers […]

From Newton to Darwin – how design is responding to the challenges of complexity
by Tim Brown

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Design in the 21st century is grappling with a crisis of identity. Despite the unprecedented popularity of design thinking within contemporary business and society design as a practice is being challenged by many of the same disruptions affecting every aspect of modern life. In short, design is struggling to deal with complexity.   While the process of design was not codified until the 1960’s through the work of Herbert Simon and others, the act of design is as old as humanity. Each and every stone-age axe was designed. Carefully honed to meet the specific needs of the maker and his immediate community. Jumping forward several thousand years, it was the industrial revolution that created the […]

Can Business Schools Help Us Cope With Complexity?
by A. Brown, F. Röösli

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J. Birkinshaw, S. Denning, T. Roy and V. Hlupic [1]   Why do decentralized, seemingly disorganized market economies routinely outperform centrally planned, tightly controlled economies?   One reason is the principle of obliquity. Direct, goal-oriented action works well in simple stable contexts , where tasks are easy, consequences of actions are predictable and feedback is quick. But in complex, turbulent contexts, where tasks are difficult, consequences of any individual action are unpredictable and feedback is delayed, oblique or indirect goals generally work better.   In 2004, economist John Kay recommended applying the principle of obliquity to business: “meeting global business targets [is] the type of goal that [is] best achieved when pursued indirectly.”[2] Thus, when […]

Thriving on Complexity: Co-Creation as the Future of Value Creation and Innovation
by Venkat Ramaswamy

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We are witnessing a fundamental structural shift in both the means and ends of value creation in society, which is manifesting itself as the increase in “complexity” of the environments we are all experiencing. “Complexity” by itself is not the issue – many have recognized that natural systems inherently have complexity built into how they work. The real issue lies in the “paradigm of value creation” that we have been practicing, which has served us well in the past, but has resulted in the complexity we are all trying to deal with as individuals — from goods and services that don’t quite enable and/or connect with our human experiences on the one hand, to the […]