“We are at the beginning of a period of extreme flux, of extreme change and great competitive pressure in which traditional ways of doing things, traditional products, traditional processes will be challenged on all sides.”
When Peter Drucker uttered these words to a group of IBM executives, new complexities were tripping up the world. It was 1955.
In the more than half a century since, of course, the level of complexity has only increased across all of our institutions – political, economic and social. Indeed, as we move further into the 21st century, the complexity curve seems to be growing exponentially. The notion of achieving neatly laid-out objectives through systematic planning has become increasingly questionable. More and more, managers feel overwhelmed by the speed of change and the degree of uncertainty in their environment.
All of this makes the theme for the fifth annual Global Peter Drucker Forum – set to be held in Vienna on November 14 and 15, 2013–particular timely. This year, we will gather under the banner “Managing Complexity.”
Trying to master complexity is – well, quite complex. While the interconnectedness of the world brings about tremendous benefits such as ubiquitous access to knowledge and borderless communication, it also generates unprecedented risks. Complex global systems – financial markets, energy grids, supply chains that span continents-are by their nature fragile. And thus management failures can have catastrophic consequences, as we have repeatedly witnessed during the past decade.
“In any system as complex as the economy of a developed country,” Drucker warned in The New Realities, “the statistically insignificant events, the events at the margin, are likely to be the decisive events. . . By definition they can be neither anticipated nor prevented. They cannot always be identified even after they have had their impact.”
Yet most managers still seem to be anchored in command-and-control and cause-and-effect thinking patterns. Organizations continue to be understood as machines (complicated but predictable) rather than as organisms (highly complex, adaptive systems with limited predictability). Meanwhile, linear approaches to problem solving often have the opposite effect of what is intended.
How should managers cope with an increasingly complex environment? What does complexity mean for management practice in the 21st century?
Do we have to adjust our current management approaches or are we talking about something bigger – that is, fundamental changes or even a new paradigm?
What can managers learn from complexity sciences without falling into simplistic analogies between natural systems and social systems? Can we calculate our way out of complexity?
What are good practices pointing in the direction of new, more adequate management methods and tools? Are approaches such as design thinking, Agile Software Development and “Antifragility” some of the keys to a better future?
What are the consequences of complexity for the management of risks in business and society? Can we simplify complexity as many of us would wish?
Since analytic methods alone cannot provide the answers to complex, human systems, what can we learn from the arts and humanities?
As we begin to gear up for this year’s Drucker Forum, you are invited to provide your perspectives on these or other questions related to complexity. (They will be published on this blog after review by a small editorial team.) Please join the conversation either by commenting or by sending proposed blog posts to the following address contact[at]druckersociety.eu.
4 thoughts on “Managing Complexity – Invitation to join the Conversation”
In a world of ever increasing complexity Peter Drucker knew that knowledge is the most important starting ingredient for a Knowledge Economy. Successful management of knowledge workers is what is needed to build a smarter planet that can deal with complex issues.
The world has turned into one big village with the advent of the internet technology. Mangers must live with the reality that the people they manage have access to most of the information they have. The difference is in how a manager harnesses available information in management so that ideas floated appear fresh, new and useful to the community being managed. Hence it is true that successful management of knowledge workers is needed in building a better planet.
Mildred, systems philosophy presupposes hierarchy. The human brain is a problem solving device in constant search for patterns. Unlike computers, it can and does work with incomplete information. In an ideal case a manager has a higher perspective which equates to a more powerful pattern fitting ability. And since complexity is all about “hidden” patterns, managers should be chosen based on the ability to manage higher complexity. See my related blog for additional insights such as why the human brain is in a constant search for patterns in the first place: http://tinyurl.com/b8xq2z6.
It’s not about information, it’s about patterns!
Richard – You wrote an insightful post at the HBR blog site that also serves to stimulate thoughts by readers. Thank you.
I agree with almost everything you wrote. I do not agree with your conclusion, though, that ‘embracing complexity will not make managers’ jobs easier.’ Just the opposite is true: embracing complexity will make managers’ jobs easier.
This complexity moment, I believe, is a sea change moment to be sure, but is also just one more change moment on a continuously lengthening continuum of change that organizations and managers have had to deal with over the decades. And, by embracing the change moments (often reluctantly for the ‘control’ reason you present), managers, leaders, corporations and organizations of all kinds have made their jobs easier.
I will be happy to follow up and explain my thoughts in more detail, but for this note I will conclude by suggesting that it is not only (1) the desire of managers to control, (2) the fact that the technological tools to facilitate the embracing of complexity are only now blossoming and (3) the prospect of non-human decision-making unnerving managers (this one is so bizarre) that underlie the general failure to embrace complexity. It is also the longstanding and now completely outmoded and discredited dominant mindset that corporate managers (including especially top management), Wall Street and the global financial community have had and used for almost 200 years that is at fault – that is even the deeper, underlying heart of the problem.
This dominant mindset, part which you allude to, is inward-focused, win-lose and short term. The dominant mindset going forward, which I think you also indirectly allude to, must become outward-focused (stakeholder- focused; about five or six primary stakeholder groups for every organization) and long term. This mindset will embrace complexity as a natural part of its service and servant DNA. Along with this mindset, certain leadership and organizational culture characteristics are key to excellent performance going forward.
Again, I would be happy to discuss more, fill in some blanks and of course listen to you and learn. I have been reading Peter Drucker’s writings since 1972. I humbly think he would agree with these thoughts. I also humbly think Adam Smith would agree. Jack Haffey.