Organizational Strategies for Coping with Complexity
December 3rd | 2015

To cope with and manage ever more complex business environments, companies themselves have become ever more complex.

From centralized hierarchical structures through divisional, matrixed, agile and now networked models, business has layered system upon system upon system. Today, most companies are awkward amalgamations of several different models operating simultaneously.

Yet in many ways these are all still manifestations of a brute-force approach, an attempt to resolve complex and blurry problems into an increasingly smaller series of simple and well-defined components. It’s the application of industrial-era thinking toward solving problems that are occurring even after the post-industrial era. While productivity and efficiency are no longer the aim of most businesses, organizational structures are still fundamentally designed around them as the goal.

Clearly, this is not working. In most large companies, the complexity of these structures is so overwhelming that new employees talk about “learning the system” and often spend months understanding how to get things done before actually doing anything. Even when they learn a system, the amount of time spent managing and navigating that system is greater than the time spent on the core activity of the business.

The fix for this problem may require a complete overhaul of business. But in the meantime, there are some principles that seem to be pointing in the right direction.

A fractal approach to company structure: Rather than looking at every part of the company through the same lens, it’s more helpful to think about a company comprising self-similar patterns that repeat at various scales. Coherence happens at the highest level rather than the lowest, which can require a willingness to endure some level of daily chaos.

Temporary internal organization: Internal structures are often useful only as long as a task is relevant. Many companies are shifting to temporary structures that emerge bottom-up in response to a need and then dissolve when that need is gone.

A rejection of process: Like an algorithm, a process works well upon clearly defined variables and clearly defined inputs and outputs. However, few things in business deliver that kind of clarity. While rejecting process seems counterintuitive, it often results in people applying more thought and creativity toward solving problems, which can dramatically improve the effectiveness and efficiency of the solution.

Organization around task, not team: Fixed teams almost always contain members who are unnecessary or even harmful to the specific task at hand. Organizing around a task builds teams specifically for a goal and brings the added benefit of requiring the rigorous definition of a goal before the team is assembled.

Employees tasked with a high level of intellectual autonomy: While there is a lot of rhetoric around empowerment, practice does not back it up. Most companies have subtle and not-so-subtle penalties for thinking too much about what to do and how to do it. This has led to a universal expectation that “someone else” is responsible for telling me what to do. Making it very clear to employees that they are required to figure it out and removing barriers such as structure, process and hierarchy can be liberating for some people and terrifying for others. Clearly this also requires a high-bar for and a non-traditional view of talent.

A strong, inspiring, emotional and clearly defined brand: While many of the above principles serve to deconstruct order within a typical company, the brand delivers coherence. The role of a brand, brand purpose and brand experience principles are increasingly becoming ways to guide actions and decisions inside a company more so than means of shaping customers’ perceptions. A brand creates an emotional framework for understanding what is and isn’t right within the context of how that company behaves. It establishes a higher order goal under which many smaller goals can and should live. It also creates a series of cultural conventions that bind employees together, creating more alignment than can be gained through structure and process alone.

Presently, lots of work and attention are being devoted to re-wiring the corporation or to creating the operating system for the company of the future. Yet perhaps the above principles suggest that there is no wiring or operating system required. Perhaps the companies of the future will resist this kind of infrastructure as strongly as the companies of the past depended upon it? What do you think?