Managing Complexity: The Battle between Emergence and Entropy
by Julian Birkinshaw

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The business news continues to be full of stories of large companies getting into trouble in part because of their complexity. JP Morgan has been getting most of the headlines, but many other banks are also investigation, and companies from other sectors, from Siemens to GSK to Sony, are all under fire.   It goes without saying that big companies are complex. And it is also pretty obvious that their complexity is a double-edged sword. Companies are complex by design because it allows them to do difficult things. IBM has a multi-dimensions matrix structure so that it can provide coordinated services to its clients. Airbus has a complex process for managing the thousands of suppliers […]

From Newton to Darwin – how design is responding to the challenges of complexity
by Tim Brown

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Design in the 21st century is grappling with a crisis of identity. Despite the unprecedented popularity of design thinking within contemporary business and society design as a practice is being challenged by many of the same disruptions affecting every aspect of modern life. In short, design is struggling to deal with complexity.   While the process of design was not codified until the 1960’s through the work of Herbert Simon and others, the act of design is as old as humanity. Each and every stone-age axe was designed. Carefully honed to meet the specific needs of the maker and his immediate community. Jumping forward several thousand years, it was the industrial revolution that created the […]

Can Business Schools Help Us Cope With Complexity?
by A. Brown, F. Röösli

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J. Birkinshaw, S. Denning, T. Roy and V. Hlupic [1]   Why do decentralized, seemingly disorganized market economies routinely outperform centrally planned, tightly controlled economies?   One reason is the principle of obliquity. Direct, goal-oriented action works well in simple stable contexts , where tasks are easy, consequences of actions are predictable and feedback is quick. But in complex, turbulent contexts, where tasks are difficult, consequences of any individual action are unpredictable and feedback is delayed, oblique or indirect goals generally work better.   In 2004, economist John Kay recommended applying the principle of obliquity to business: “meeting global business targets [is] the type of goal that [is] best achieved when pursued indirectly.”[2] Thus, when […]

Thriving on Complexity: Co-Creation as the Future of Value Creation and Innovation
by Venkat Ramaswamy

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We are witnessing a fundamental structural shift in both the means and ends of value creation in society, which is manifesting itself as the increase in “complexity” of the environments we are all experiencing. “Complexity” by itself is not the issue – many have recognized that natural systems inherently have complexity built into how they work. The real issue lies in the “paradigm of value creation” that we have been practicing, which has served us well in the past, but has resulted in the complexity we are all trying to deal with as individuals — from goods and services that don’t quite enable and/or connect with our human experiences on the one hand, to the […]

Punching Above Your Weight
by Liisa Välikangas

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Look for the outliers, companies that are so different as to be puzzling. What makes some outliers powerful, and noteworthy to strategic thinkers, is their ability to “punch above their weight”. In other words, these easily dismissed outliers amplify the effects they have across various industries and generate potent, transformative change. Innovative new methods that outliers are currently using for such strategic impact include:   1) Contributor architectures that facilitate unlikely encounters. Startup Nectar incubates new “bio-mimicry” businesses, a field where experts in life sciences like biology together with engineers, architects, computer scientists and corporate managers come together to fit the designs and processes of the natural world into new buildings, products, and services. Recent […]

Best Fitted to Cope with Complexity
by Dagmar Woyde-Koehler

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“What we need today are not tunnel vision thinkers but inquiring free-ranging minds because such minds are best fitted to cope with complexity”. This was one of the key points made by Prof. Peter Kruse in his address at the opening of the Berlin exhibition of the OUBEY Global Encounter Tour in March 2013.   Peter Kruse is well known in Germany for his research into how self-organizing systems and intelligent networks perform and function, and for his perceptive cultural analysis – as well as for his at times provoking and highly controversial ideas. From his own fresh and unfamiliar vantage point, he cast new light on OUBEY and the idiosyncratic maturation process that gave […]

Leading in Complex Times
by Lynda Gratton

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If you’re a business leader today you are working to understand and balance the perspectives of an unprecedented variety of stakeholders – from NGOs becoming more voracious in their demands to workers who are increasingly hard to engage – and doing so in a world that is more transparent and connected than ever before. It’s a tough challenge.   I found myself reflecting on this the other night as I sat down with two very smart people for one of those marvelous European dinners. Both are business leaders in one of the world’s great pharmaceutical companies. The conversation turned to the growing complexity of the business environment, and the question was inevitably posed: What had […]

Peter F. Drucker – Management Needs Values
by Manfred J. Hoefle

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Much has been said and written of Peter Drucker, and yet there still remains a little known aspect to his life. Drucker hardly mentioned his own personal philosophy1 and only later, after his death, was greater consideration given to his innermost convictions and motives.   Christian thinking as a foundation for management theory The Christian aspect to Drucker’s thinking is shown by these quotations from his works. (The summaries that follow may encourage you to read Drucker while considering this aspect.)   1. The nature of humanity   “The only basis of freedom is the Christian concept of man’s nature: imperfect, weak, a sinner, … yet made in God’s image and responsible for his actions.” […]