The intelligent management of complexity is rewardable

April 22nd, 2013
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An innovative approach to complexity can be profitable

Alexander HaasperManagement Consultant Alexander Haasper thinks that complexity can yield advantages over competitors and be a source for innovation. Organizations should not only focus on solely reducing complexity.

1. Mr. Haasper, last year you and your partner, Carsten Fabig, published a book on the topic of Complexity Management. Could you shortly summarize why it is worth purchasing it?

The focus of the book lies on how to intelligently use complexity in an organization and how to ultimately turn it into an advantage. I think that we succeeded in examining the essential facts about Complexity Management in business life. It was especially important to us to show the impacts of complexity on our everyday life and we tried to establish a certain kind of practical relevance by letting experts in strategy, leadership, project management etc. put their experiences into each chapter. In fact, we already received great feedback from our clients and readers.

2. You already worked in a lot of projects. What did most influence your work concerning complexity?

It was an international project which definitely influenced me the most. In the middle of the project we made a major cut and reorganized the whole project radically. We redefined all deliverables and the rollout regions. Despite the tough timeline and the expected resistance due to extra work during the change, we ventured to break a pattern which had become inefficient and to restructure the project to put the focus solely on the deliverables.
Moreover, I was highly motivated by Professor Dr. Kruse during my studies. He has been publishing on the topic of Complexity and Change Management for several years. What stimulated my motivation the most were the answers to the question: “How do change processes work and which role does complexity play during a change?”´

3. What are nowadays drivers for increasing complexity of organizations?

For me, complexity is not primarily the number of things that need to be managed but rather the interconnection of these elements in an organization. Accordingly, if this interconnection increases, complexity increases as well. The most important drivers of complexity today are the organization’s variety of products, customer segments which need to be addressed and finally the combination of products and services which are linked to the products. All these factors define the complexity an organization has towards its customers and which is necessary to ensure sustainable success.

4. How can organizations keep track of their complex structures? What kind of methods can be applied? 

According to our experiences, there is a need to differentiate between resolution and implementation complexity. The fundamental approach to this is that resolution complexity focuses on the customers itself while implementation complexity is managed internally by the organization. The dynamics within an organization play a crucial role for the management of complexity because if structures and processes become too dynamic, an organization will not be able to control the level of complexity. Structures and systems can only be controlled if they are somewhat stable.

5. Which role does globalization play for the complexity of structures?

Concerning the role of globalization it is decisive in which industry the organization operates. Organizations which need to realize high profit margins have to focus on outsourcing which is essentially the management of providing smooth interfaces. On the other hand, SMEs which increasingly enter the global market will need to focus on mergers & acquisitions as well as business development. They have to open their doors for innovation but simultaneously have to standardize early enough to prevent their processes from getting too complex.

6. Complexity Management and Flexibility – two terms which exclude one another?

For me, the contrary is true. It is complexity which stands for variety of and within an organization. Only a structure which focuses clearly on customer demands will be perceived as flexible and dynamic.

7. Which role does Complexity Management play concerning innovation?

In my opinion, an organization’s ability to foster creativity is a fundamental premise for innovation because today, innovation is all about combining different disciplines to create new solutions for customers. Besides being creative, such solutions must be tradeable. This requires that organizations are able to increase complexity and to transfer it into new solutions.

8. There are plenty of configuration systems available on the market. How can such systems help to manage complexity?

Such systems often focus on resolution complexity, meaning the management of product and service characteristics. This complexity needs to be maintained stable. If innovation and product circles are relatively short, such systems need to be adjustable. Only in that way can a sustainable profit be realized.

9. How can organizations learn from nature concerning Complexity Management?

Collective intelligence is highly discussed. As soon as a system works according to a defined pattern it can become highly stable and can generate superior solutions as one individual or one element of this system would be able to. If we project this approach on organizations, we are acting on a rather cultural level.

10. How can organizations sustainably establish Complexity Management?

Complexity Management should be established on all relevant levels within an organization. As with all corporate changes, the results should be conceived rationally and emotionally by all parties involved and should be integrated into the working routine. An organization’s culture regarding complexity and the process of managing it – which is also explained in our book “Complexigence” – play crucial roles. From our perspective, it is important for an organization that results and success are visible within the first 3 to 6 months.