Hugh MacLeod wrote an interesting post about complexity, citing complexity as the difference between success and failure. It’s simple to fail, but you must manage complexity to succeed. He applies this theory to organizations:
So when I see a small but insanely-successful
business suddenly implode overnight [it seems to happen quite a lot in
Silicon Valley], I’m guessing chances are it wasn’t inability
to manage growth per se that destroyed the business [a favorite reason
cited by those writing business obituaries], but the inability for the
business to manage complexity.exponentially with growth, most small companies can culturally only handle incremental increases in complexity. As I’m fond of saying, "Human beings don’t scale". Complexity increasesWhich is why walking around the hallways of large, successful
companies can often seem so oppressive to somebody new to it. All that
cultural regimentation is there for one reason only: To fight "The Complexity War".
Sure, it might feel a bit ghastly to the more idealist and
free-spirited among us, but until somebody can come up with a better
way to win this Complexity War at a Fortune-500 level, I don’t see it
ever going away.
Interesting theory. Ironically, he might be over-simplifying a bit, but I like the idea of assuming growth requires managing more complexity, and I’m particularly interested in the idea that we need more regimentation to deal with the complexity that goes along with large organizations.
One thing I think of is the idea of best practices. We all want sample models and policies, or we read Good to Great to pull out the lessons for our organizations, but how relevant is a model from a 10,000 person organization to my staff of 10? According to Hugh, the larger the organization, the more regimented it becomes. I’m extrapolating here, but this means we need more rigid structures and policies to manage complexity at the larger level.
But it’s larger organizations that are our models in general. They’ve been around. They are successful. So whatever they do is what we should do. But not if they are operating at the 10,000 staff level of complexity. Your staff of ten doesn’t need that. I’m beginning to think that the staff of ten doesn’t need what the staff of 20 needs either. There are lots of levels here. At one level, we probably already know this, but I think at the same time we are continually surprised when we have to shift to meet the next level of complexity. I also think this is why we fail miserably in strategy so frequently. Traditional tools for doing strategy work don’t tend to be adequate for or even recognize the increasing complexity of the operating environment.
I also hear a challenge in Hugh’s point: is there another way to deal with large amounts of complexity OTHER than the regimentation that is "a bit ghastly" to the free-spirited among us. I think places like W.L. Gore are interesting–where they create a new organizational unit if it gets to be more than 150 people because that’s the natural limit for you to feel like you know everyone in the group. I’d bet there are more ways to do this than what we have out there as models.
Hugh MacLeod’s on to something as are you. Complexity which is indeed very real in our society and in our organizations lends itself to lots of rules and regimentation. The problem is that regimentation sometimes gets in the way of serving members, customers and fulfilling our mission. When rules intended to tame complexity instead interfere with our ability to serve, well stuff hits the fan. Interestingly, a number of organizations have sought to use “guiding principles” as a way to keep purpose, service and mission centerplate, regardless of what the rules say. The concept offers a balance between what complexity seems to require and confidence in the individual to make the right choice within the guidelines of the principles.
The lessons for those of us in the association profession and our Boards alike is this. Complexity costs money. Lots of it. Not only does complexity raise costs, it also hinders growth. By some estimates the least complex organizations have growth rates 30 to 50 percent above organizations with average levels of complexity. Finding ways to simplify offerings using the Aldi principle (which suggests you remove a product every time you add a new one) is one of the ways your association might find balance. Simplification works when it comes to strategy too. Most often associations tackle too many initiatives at once and stretch themselves thin. Having three really urgent and important priorities receiving the “full on” attention of the organization before moving on to a fourth or fifth will increase your chances of success on every initiative. Look for opportunities to reduce costs, enhance your relationships with customers and members and for ways to build upon your inherent strength and competitive position.