Understanding and Mastering Complexit

March 23, 2012 • Business Process, Global Business, OPERATION, STRATEGY & MANAGEMENT

By Wolfgang Amann, Christoph Nedopil & Ulrich Steger

Complexity is re-emerging as a topic in top management. A combination of factors, such as the severe repercussions of the financial crisis and the acceleration of technological change, has reminded executives of the challenge in not only surviving, but also strengthening their companies’ foundations so as to fully compete against others. This article presents two frameworks to support both these undertakings. The first depicts the crucial drivers of complexity in order to better understand its manifestations. The second framework portrays the complexity competencies needed by those seeking to proactively manage complexity. Especially international companies are encouraged to consciously hone such skills since, for example, crossing borders to benefit from foreign markets often entails a unique mix of problems.

Complexity – what else?

Every year brings a new array of top management books promising easy recipes for corporate success. These bestselling titles themselves often seem to convey a sense of certainty in moving your company from ‘good to great’ or ensuring that it is ‘built to last’ without clearly highlighting the significant methodological weaknesses that much of this advice is based on. Those authors following a more rigorous approach – after all, Peters and Waterman admitted to have faked the data1– in understanding companies find many of today’s solutions having a shorter than ever shelf-life. By the time the authors are done compiling and publishing their books, the world may have fundamentally changed. The next crisis may have hit, the next disruptive technology introduced or the next mega-merger fundamentally altered the industry’s structure. Moreover, these solutions tend to be highly situational and therefore less and less generalizable across different settings. Too unique are the various settings we find in different companies. In this sense, any company interested in finding the answers to their strategic questions are well advised to understand that complexity may well be the meta-challenge of our times.

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