Reading reports on the meeting on complexity in organisations that took place in Vienna last week, I started reflecting on my own experiences of complexity. As a lapsed physicist, I know that it is a fundamental law of nature that disorder (which is often much the same as complexity) tends to increase with time. The only way to reverse this trend is to do work – and even then the reduction in disorder is only local. I can’t think of any experiences that suggest that this is not just as true for organisations as for nature in general!
Most managers focus mainly on what their own areas need. They seek to improve their areas by doing work (designing and introducing changes of many kinds), and often succeed – but frequently the local success may be at the expense of making the joining up with neighbouring areas worse: overall, complexity may have increased as a result of their work, just as the laws of thermodynamics say it should!
Agree key principles to manage complexity
Avoiding that problem is not easy, and only partial solutions are possible – managers have to be trusted to manage. It can help, however, to provide a top-down framework designed to fix key principles organisation-wide, and then to allow managers the freedom to develop local solutions to problems within that framework. A self-consistent set of- Vision and values
- Strategic objectives
- Simple and clear structure for decision making
- Delegated authorities and accountabilities
- Key metrics
There is a rather impressive new office building going up in the City of London at the moment. Colloquially referred to as the Walkie Talkie building (London likes its building nicknames), instead of the usual flat walls, its walls are gently curved, giving it a very sculptural quality. And like many modern office blocks, it is covered with floor to ceiling glass. It will look amazing when it is completed.
However, people living, working, or even just passing nearby are feeling amazed for all the wrong reasons. It seems that the architects didn't join things up - they forgot to take account of – or underestimated – the effects of the laws of optics.
Think of a reflecting telescope. It works because the concave mirror in the telescope focuses the light from the stars that falls on it. What have the architects put on the front of the Walkie Talkie building? In effect, a gigantic concave mirror. And like all such mirrors it focuses the light – in this case particularly the sunlight - falling on it. On a hot summers’ day, the temperature in a nearby street has risen enough to blister paint and melt plastic. Now it’s called the Walkie Scorchie.
Joining things up
It’s a great idea to reflect sunlight so that your offices don’t overheat, but it is not OK to give someone else your sunlight problem instead. Frequently an internal focus on solving our own problems can blind us to the difficulty that our solution may export to someone else. However expert each of us is in the areas we know about, we may blunder into basic problems outside those areas. In this interconnected world, it is wise to think carefully about any possible external effects; otherwise an embarrassing oversight can quickly become a PR disaster. Joining things up so that such things do not happen is far from easy, and needs a commitment to cross-silo working that few organisations seem to recognise. Busy managers may not have time – and frequently have no incentive – to consider wider impacts. Making it happen requires explicitly recognising the need and creating processes in response.
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View of Chernobyl taken from roof of building in Pripyat Ukraine. Photo Taken by Jason Minshull, then digitally zoomed. (Photo credit: Wikipedia)[/caption]
Have you noticed how often it happens that when things go wrong, they don’t just go wrong, they go horribly wrong? From the truly horrendous disasters like Chernobyl and Fukushima to the merely painful like a company going bust, once things have started to go bad, the interventions people make often exacerbate the situation. Why is that?
When things start to go wrong, there can be a number of immediate reactions, depending on the circumstances. One is to hide your head in the sands, and pretend that there is nothing wrong. That is almost guaranteed to make things worse! More common is the fire hose approach: do something drastic with the intention of stopping the immediate threat, which may deal with the underlying causes (although it may also exacerbate them), but certainly soaks everything, whatever the consequences. Following the analogy, the fire hose is good at putting out some sorts of fires, but inadvisable on oil or electrical fires! In between is the timid approach – not wanting to do any more damage than can be avoided, the attempted cure finishes up being too little and too late. How difficult it is to get the balance right!
View of Chernobyl taken from roof of building in Pripyat Ukraine. Photo Taken by Jason Minshull, then digitally zoomed. (Photo credit: Wikipedia)[/caption]
Have you noticed how often it happens that when things go wrong, they don’t just go wrong, they go horribly wrong? From the truly horrendous disasters like Chernobyl and Fukushima to the merely painful like a company going bust, once things have started to go bad, the interventions people make often exacerbate the situation. Why is that?
When things start to go wrong, there can be a number of immediate reactions, depending on the circumstances. One is to hide your head in the sands, and pretend that there is nothing wrong. That is almost guaranteed to make things worse! More common is the fire hose approach: do something drastic with the intention of stopping the immediate threat, which may deal with the underlying causes (although it may also exacerbate them), but certainly soaks everything, whatever the consequences. Following the analogy, the fire hose is good at putting out some sorts of fires, but inadvisable on oil or electrical fires! In between is the timid approach – not wanting to do any more damage than can be avoided, the attempted cure finishes up being too little and too late. How difficult it is to get the balance right!
Fast disasters …
It is understandable that in a crisis people react by tackling the obvious problems. If your house is on fire, stopping the flames obviously seems more important than avoiding ruining the furniture. When the situation is relatively simple, that approach works. The problem comes when the situation is more complex. In a crisis, you act instinctively, and you do not usually have time to think through the consequences of your actions. Almost by definition, complexity will bring unforeseen consequences. How many organisations have no more complexity than they need? What to do about this? There are two possible approaches. You can minimise the risk of unforeseen consequences in a crisis by keeping the organisation as simple as possible. Or you can practice crisis management through exercises and so attempt to learn what adverse consequences might occur and how to avoid them. Or you can do both, of course. Clearly though, both of these have a cost which needs to be incurred when there is no crisis in sight.… and slow disasters
Slow disasters pose different and much more difficult problems. The fire-hose approach is much less likely; head-in-the-sands and timidity more so. It all starts with ability to acknowledge the problem in the first place. The organisation’s leaders may not believe that what they are seeing are signs of a problem. Even if they do think there is a problem, they may not want to admit this. They or people they are connected to may have vested interests; they may be unwilling to admit failure, or believe that admitting problems will damage confidence and make them worse; they may believe that other issues are more urgent. Perhaps the most common situation is that leaders recognise the problem, but simply underestimate what is needed to fix it. Most managers are optimists at heart, and in deciding what – often painful - actions are required, optimism bias will tend to creep in to minimise the pain. These can be very difficult decisions: for example, no manager wants to make any more staff redundant than they absolutely have to. However, if the ‘cure’ is insufficient, the problem remains, and will have to be treated again – with the ‘patient’ now in a weaker condition than previously. Underestimating can be fatal: death by a thousand cuts is a phrase I have heard repeated too often, and the consequences for staff can be worse than being bold at the outset. In summary then, perhaps the message in both cases is the same: optimism rarely provides salvation; taking what feels like unnecessary pain early may do.
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Queueing for the Proms 2008 on the south steps of the Royal Albert Hall (Photo credit: Wikipedia)[/caption]
I’m sitting on the steps outside the Royal Albert Hall in London. Fortunately today it isn’t raining, but even if it was, I needn’t worry. These days the Proms have an excellent system for managing the queue – rather like the ones on the deli counters in supermarkets. When you arrive, you are given a numbered ticket, which guarantees your place in the queue. Once you have your ticket, you can wander off for a coffee or a snack, or take shelter if it rains, knowing that everyone will be admitted in the order they joined the queue regardless. It is not particularly sophisticated – but it is a simple system, and it works.
Simplicity is hard-fought-for: it does not happen by accident. Once a complex process or system is in place, changing it to remove unnecessary complexity is hard, just as all change is. Even stopping a simple system getting more complicated needs constant vigilance: otherwise, it is likely to gather exceptions and special cases, as well as extra checks that seem important, but which have a cost which is frequently overlooked. Just as nature dictates that the disorder of the Universe (or a teenager’s bedroom) increases with time, and that this can only be reversed by the input of work, so it is with organisations.
Why does it matter? Because a simple system is inherently more efficient and less error-prone. Have you tried to explain your organisation’s processes to a new joiner? If so, how easy do you find it to explain the judgements required if the process has branches (if this, then that, but if not, then the other), and how quickly do people learn to make them properly? Good governance depends on people following the rules. Complexity makes it more likely that people will make mistakes, and also makes it harder to spot when people deliberately try to get round rules. For an extreme example of what happens with complexity, think about tax codes: with complex rules and many special cases, expert advisers earn a good living, which must be at the expense of either the tax-payer or the tax-collector or both. While that is good for the experts, does that not make its complexity bad for the rest of us?
Queueing for the Proms 2008 on the south steps of the Royal Albert Hall (Photo credit: Wikipedia)[/caption]
I’m sitting on the steps outside the Royal Albert Hall in London. Fortunately today it isn’t raining, but even if it was, I needn’t worry. These days the Proms have an excellent system for managing the queue – rather like the ones on the deli counters in supermarkets. When you arrive, you are given a numbered ticket, which guarantees your place in the queue. Once you have your ticket, you can wander off for a coffee or a snack, or take shelter if it rains, knowing that everyone will be admitted in the order they joined the queue regardless. It is not particularly sophisticated – but it is a simple system, and it works.
Simplicity is hard-fought-for: it does not happen by accident. Once a complex process or system is in place, changing it to remove unnecessary complexity is hard, just as all change is. Even stopping a simple system getting more complicated needs constant vigilance: otherwise, it is likely to gather exceptions and special cases, as well as extra checks that seem important, but which have a cost which is frequently overlooked. Just as nature dictates that the disorder of the Universe (or a teenager’s bedroom) increases with time, and that this can only be reversed by the input of work, so it is with organisations.
Why does it matter? Because a simple system is inherently more efficient and less error-prone. Have you tried to explain your organisation’s processes to a new joiner? If so, how easy do you find it to explain the judgements required if the process has branches (if this, then that, but if not, then the other), and how quickly do people learn to make them properly? Good governance depends on people following the rules. Complexity makes it more likely that people will make mistakes, and also makes it harder to spot when people deliberately try to get round rules. For an extreme example of what happens with complexity, think about tax codes: with complex rules and many special cases, expert advisers earn a good living, which must be at the expense of either the tax-payer or the tax-collector or both. While that is good for the experts, does that not make its complexity bad for the rest of us? 
Years ago, I was managing the sale of a business division. The business was based on carrying out a highly-specialised technical test on clients’ products, and each time a test was carried out, it made a loud bang. This would have been of no concern if it had not been that they were carried out in a large workshop also used for other activities. However, checks had been made and the noise levels were within legal safety limits.
Just before signing the deal, we happened to mention to the purchaser that we had some tests scheduled for the next day, and he said he’d like to send someone round to check the sound levels. It was a beautiful summer’s day – until their measurements showed that the bangs were over the limit. What a toe-curling moment! Clearly, we had made the wrong assumptions.
In the end it was not as bad as it seemed: a sound-attenuating box solved the problem without making access too difficult, at quite modest cost and with only a few weeks’ delay. But the proving tests provided another surprise – the noise levels were legal again without the box. The reason – we now realised – was that the humidity of the air could affect its sound-attenuating properties.
Avoiding wrong assumptions
Conclusion 1 – Make sure you know what factors can affect your assumptions. Wrong assumptions may lead to disaster. Conclusion 2 – Don’t rely on conclusion 1! If something is critical, don’t rely on a modest safety margin – do what you can to increase it early, in case there is something you have not anticipated.
What happens when an organisation grows up? Many things, but it is not so different from a child growing up: it develops organisation maturity.
As a child grows up, it develops its own habits, values, behaviours. It makes friends. It learns how to do things it could not do before. And it learns how to blend and adapt all of those things to create a consistent whole – its personality. With that comes self-confidence.
So it is with an organisation. In a young organisation – even a large one, perhaps formed from a merger – processes and structures may have been patched together un-adapted from different inheritances. Initially, the mixture of values, relationships, and so on, is unlikely to be self-consistent. Although they may be individually very experienced, managers are not used to working together, and do not know how each other will react in different circumstances. Trust takes time to develop.
Even for an established organisation, a major disruptive change in its environment can cause the same difficulties. The new environment is unfamiliar and the managers of the organisation may have varying responses. Confidence and trust in each other’s judgement in the new situation need to be re-established. Perhaps new people join the team. Processes and systems may need to be changed, because the organisation and its strategy are no longer aligned.
Nobody expects a small, young organisation to behave like a major corporation. However, with scale comes expectation. If you look like a grown-up, people expect you to behave like a grown-up and to have grown-up relationships. Just as with a child who looks much older than it is, the incongruity can cause difficulty for everyone.
Organisational self-confidence – maturity if you will – matters. When an organisation knows at all levels that ‘this is the way we do things round here’, everyone in it can stand their ground with confidence if they need to, in the knowledge that all their colleagues would back them up. Where there is underlying inconsistency, people do not have that confidence. Then it can feel as if you are standing on your own, rather than backed by a team - the whole is not greater than the sum of the parts. So an organisation in this situation needs to grow up fast.
What does it take to do something about this?
First, recognise the nature of the problem. Fundamentally the challenge is about joining things up. That makes it multi-dimensional, multi-functional, crossing all the silos. That in itself means the response has to be driven or at least supported from the top. It also means that it is best done by someone with no vested interest in the outcome. And while it will require detailed analytical work to understand and correct specific problems, it will also need influencing and people skills to ensure that the solutions are accepted and embraced.
I have worked in a number of organisations which have faced challenges of this sort, and helped them to find their way through them. If you are facing similar challenges which you would like to discuss, please contact me at david@otteryconsulting.co.uk.
Want to kill a good conversation dead instantly? Tell someone you are a physicist!
The editorial column in a professional magazine I sometimes read asked recently ‘what does “physics” mean to you?’ And it’s a good question – which I don’t propose to answer here! But it did set me thinking about what I mean when I say I am a physicist (yes, you guessed, I am), even though it is many years since I have done anything which would normally be called physics.