Julian Birkinshaw professor at the London Business School had an interesting article in Forbes a couple weeks ago titled “Managing Complexity: The Battle Between Emergence And Entropy” which comes close to, but falls just short of, making a good recommendation for dealing with complex organizations.
Big companies are complex, but what can be done about it? “Simplify” is the standard approach, but it does not work because you reduce costs, but you also reduce the benefits as well. This quote accurately reflects the problem of thinking of an organization like a machine:
If you try to manage complexity with an engineer’s mindset, you aren’t going to get it quite right.
Complexity comes about because of three ‘processes’ (by process here he means natural tendencies that change the organization):
- design – the intended structure from management
- emergent – a.k.a. autopoesis; the self organizing behavior that occurs as individuals intelligently optimize their own situation in relation to all the others; like an ecosystem
- entropic – the trend toward disorder; evoking the second law of thermodynamics even though it is not clear that such a law is applicable to human organizations
This third tendency is subsequently explained as the tendency for workers to become insular, complacent, detached, disengaged, and lose focus on the customer.
He suggests there are two potential responses to keep an organization on track:
- cleaning house, battling entropy — compared to cleaning a teenager’s room, and clearly intended as a strawman argument for an ineffective and thankless approach.
- Inspiring emergent action — delegating the job to the workers. “It isn’t easy to do, but when it works out the rewards are enormous.”
The more open the organisation is to external sources of energy, the easier it is to harness the forces of emergence rather than entropy.
Clearly this reflect many of the concepts I have been discussing in recent months: don’t think of an organization like a machine. Don’t try to make hard static structures, and then run around patching them up when they break. This is the battling entropy approach.
Instead, think of the organization like an ecosystem which grows and evolves. With this understanding, you can prune some thing, and prop up some things, but for the most part you let the garden grow in a natural way. Avoid forcing the garden to do unnatural things, but instead understand the natural effects, and try to shape the garden such that the plant grow into it correctly. So far, so good.
The arguments he makes based on the concept of bringing external energy into the organization, by injecting external managers into the organization, are unfounded; the analogy does not hold. I don’t mean to say that bringing external managers in won’t help. It might. But the analogy to gasses, pressure, and entropy does not equate to people flow. Energy can flow into an organization without people flowing. One should be far more concerned about the flow of ideas, but then again gasses are not analogous to ideas.
What really matters in an organization is the ability for people to act on their ideas. If the organization is heavily constrained by rigid procedures, no amount of new people or new ideas will have any effect. If the organization allows people to innovate with their working patterns, then ideas have a chance to work, regardless of whether the people are new or not. Simply “refreshing your management team with outside hires” will not necessarily make this happen.
I think this is the conclusion that Prof Birkinshaw intended: provide an environment where emergent structures can form, and you can battle disengaged workers to great effect. This is the basis of a learning organization, but to get there the leadership must allow the organization to learn. Yet he was not as clear and to the point as he could have been.
Great summary of the article, Keith.
When I said the same things about complexity years ago I was flamed for not understanding business. But then I am not a professor at London Business School who gets to write articles in Forbes …
It is remarkable how acceptability of these ideas has changed in 3 years! The HBR issue in 2011 had a big effect, and now this Drucker Forum conference on the topic. I think it shows a lot of maturation in a short time.
“What really matters in an organization is the ability for people to act on their ideas.” You nailed it.