The Application of Complexity Theory to Businesses
by Peter Fryer of trojanmice
How is your organisation faring in these rapidly changing times? Are you just surviving, are you surviving well, or are you thriving? Obviously surviving is crucial, but there is more to organisational life than that, much more. If we are thriving we are clearly doing well at all the things needed for survival but more importantly we are fulfilling our organisation’s true purpose. We are making the real difference that we intended when we set up the business and we are laying the foundations for our organisations existence for a long time.
Thriving is not a state that is naturally reached by becoming better at surviving. No amount of continuous improvement will turn a surviving organisation into a thriving one. Thriving organisations have learnt to see themselves in a very different way and consequently have learnt to behave in very different ways.
The thriving organisation
• sees itself
as a community
A Systems Approach
One way of becoming a thriving organisation is to move from seeing our business as some kind of machine in which improvements to the parts will improve the whole and to start seeing the business as wholly integrated system and work at improving the whole.
The universe is full of systems, eco systems, immune systems, and weather systems to name but a few. In human terms the economy, team games, crowd behaviour, and the Internet are just a few examples.
A classic example is that if one were to take any western town and add up all the food in the shops and divide by the number of people in the town there will be near enough two weeks supply of food, but there is no food plan, food manager or any other formal controlling process. The system is continually self-organising through the process of emergence and feedback. What is more the food in our shops is very different to the food that was there twenty years ago because the system is constantly evolving to take account of its environment. The system is clearly thriving.
If these systems around us clearly work without rules, plans, hierarchy charts etc. why do we put so much emphasis on them in our businesses. If we were to view our own business as such a system, are there other things we can focus on to help us thrive.
Some suggestions on how we can become a thriving organisation using this systems approach are below.
In business we complicate matters by have strategies, business plans, processes, policies and values etc., which are often contradictory and difficult to remember. If we made it clear to every one what we were really about such as “The water we supply will always to be safe” or that we would “Treat the sick promptly no matter what”, then we have a simple rule which is easily understood and guides the actions of our people in all circumstances and reduces the incidence of that plaintive cry when things go wrong “but I was only following the rules”.
For most of us our business strategies fall out of the planning process and we tend to try and stick to that strategy. But the best business strategies are those that emerge from the patterns formed by the actions of our customers, suppliers and competitors who are constantly interacting and changing. As we take an action, such as changing prices or improving quality, we affect the action of others so we need a strategy that is dynamic and changes as our environment changes
The quality of our products and our service is crucial but quality is in the eye of our customer and most customers decide on quality by making comparisons. So we do not need to meet some written specification but need to be just a little bit better at meeting our customers needs than our competitors.
Variety is the spice of innovation and we need to recruit people with a wide range of views and perspectives. People who will challenge us and make life uncomfortable for us. We need to make much better use of the different perspective that new recruits bring whilst they are still new and before they have become fully subsumed into “the way things are done around here”.
In business we tend to concentrate on the individuals in the organisation through job descriptions, competences, appraisals, etc. But it is the relationships that make the difference. The relationships with each other and the relationships with the customers, suppliers and other stakeholders. We need to help people connect better and to broaden their networks, and further, we need an appraisal system which focuses on relationships.
At work teams of people come together quite naturally to organise a netball match against another company or to organise the Christmas party so why not let them self organise to meet the issues arising in the company.
Most big change programmes fail because the people in the organisation resist them, but small changes can often have big effects. For example changing someone’s job title can change how they and others see their job leading to changes in behaviour. Rather than invest (or waste) our time money and effort in big change programmes we need to be clear about what we want for the business and then regularly introduce what I call trojan mice. These are well thought out small changes which are small enough for our staff to accept and own, but which change the way they see things, so that they will bring about the necessary changes themselves.
Some examples of businesses
that have introduced some systems concepts include:
The AES Corporation, which is an American independent power producer, has an unusual organisational structure based on a near complete reliance on teams and the absence of specialised functions. Coal handlers, maintenance technicians, and other workers are members of an ad-hoc team that manages some $33 million of the plant’s cash and short-term investments. Similar teams are responsible for hiring, purchasing, safety, environmental issues and audit. Yet despite this apparent subordination of shareholders’ interests, one of the most striking features of AES’s development over the last ten years has been its remarkable financial performance.
First Direct the telephone banking company which aligns its strategy with customer requirements. The thing customers craved most of all, says Kevin Newman the Chief Executive, was an equal relationship with their bank manager. “The only kind of people who can deliver this kind of relationship is our staff and we can’t ask people to deliver something that does not reflect the way they are treated themselves, as employees in the workplace“ he says.
Businesses that do what they have always done, that follow set procedures that are determined by past events, and that rely on information and data from the past will find it hard to survive let alone thrive. The thriving organisation will be the one that is experimenting with new ways to evolve with their environments which is constantly looking for changing patterns and which is maximising the relationships between its people.