The Complexity Approach for Organisations- Seeing the Bigger Picture

Organisations are becoming increasingly dynamic. The amount of intricacy and ambiguity is growing by the year. The way problems are approached and changes are managed, as a result of this growing intricacy, is becoming a little too simple. For example, predicting the cause and effect or assumptions about a problem's origins is often inadequate to address the multi-layered challenges a leader encounters. This is just one of the reasons why complexity or 'whole systems' thinking is not only increasing, but becoming a necessity for how performance, challenges, and changes are approached.

This whole-systems approach recognises that organisations are large, interconnected, and networked systems. Made up of many interdependent parts, acting together giving rise to uncertainty. Therefore, leading through and acting on challenges, whilst maintaining performance requires a new and bigger perspective.

Characteristics of Complexity in Organisations

Modern organisations have become expansive entities with performance, sustainability, and innovation goals. They function in an internal and external network of communicating channels. Internally, organisations are made up of many departments, teams, and individuals, each having their own unique culture, relationships, goals, and leadership. Organisations also interact with external systems- such as stakeholders, customers, supply chains, and regulators. Due to these interactions, they are often influenced by a broader political and economic environment, which can sometimes be unpredictable and even volatile.

For example, industries relying on postal or courier services will understand how fuel prices influence their business. Manufacturers and distributions chains are affected by stock shortages, bottlenecks in the supply chains, or regulatory decisions. Similarly, performance is affected by workplace culture and communication. Many of us know how a poor culture affects our desires to perform.

To further familiarise yourself with where and how complexity or whole system thinking is applicable, here are some of the fundamental concepts that identify an organisation as a complex or dynamic system:

Complex or Whole Systems Thinking- The Big 5

• Interconnectedness: Understand that everything is connected. Like a spider's web, everything is interconnected. The various elements within an organisation, people, resources, services, and the leadership are all linked up. For example, communication, actions, resource allocation, changes or communications in one department can affect the performance or behaviours of many others. Also, external factors can have a direct impact on internal processes.

• Non-Linearity: Also referred to as uncertainty, means that complex organisations do not follow predictable cause-and-effect relationships or rules. Rather, they show unpredictability, where small changes can lead to very big and unexpected effects. The reverse is also true, where big plans for change can yield nothing. Understanding this is crucial for effective decision-making, leading change initiatives, and innovation.

• Emergent Properties: These are the characteristics or behaviours that spontaneously arise from the interactions between people. They can be challenging to predict (although not impossible) but are key elements of complex systems, and often arise in response to stressful situations. Think about how a flock of bird spontaneously coordinates movements, financial market bubbles, and neural memory creation. The systems responds without any direct instructions.

• Adaptive Capacity: Complex systems will adapt to changing conditions. Organisations must be agile, flexible to possibilities, and capable of responding to unexpected events or shifts in the business environment. Leaders are able to foster this adaptive potential.

• Feedback Loops: Feedback loops are essential in complex systems. Feedback occurs between outside systems, team members, departments, and with the leadership team. Feedback loops provide information about the consequences of current actions, local contexts and, help organisations adjust their strategies accordingly. Feedback promotes change.
  

Now that some of the fundamental characteristics that distinguish complex systems can be identified, what are some of the practical benefits of applying this approach when leading this type of organisation?

Applications of Complex Thinking

1. Strategic Planning: Complex thinking helps with strategic planning by encouraging leaders and the workforce to discuss problems and potential outcomes from multiple perspectives. This helps prepare robust strategies that can adapt to different scenarios.

2. Innovation: By recognising the interconnectedness of various elements within an organisation, it encourages organisation-wide collaboration and the exploration of new ideas and solutions.

3. Change Management: Managing change is a challenge due to resistance and unexpected consequences. Complex thinking aids in anticipating and addressing these challenges by creating an adaptive mindset.

4. Risk Management: Organisations face many risks, from cybersecurity, to supply chain disruptions, to a loss of talent. This approach develops a broader risk management approach that considers many possible threats and does not avoid them.

5. Sustainability: Sustainability efforts involve numerous factors and departments, from resource use to environmental impact. Complex thinking helps develop long-term sustainable practices by considering the whole-system impacts of their decisions.

6. Crisis Management: During crises, such as the COVID-19, complex thinking becomes invaluable. Organisations need to understand the broader system impacts of a crisis and decision-making. Therefore develop agile responses that considers multiple factors, and can be adjusted in the future.
   

Conclusion

In the current economic and social climate, characterised by increasing complexity and interdependence, complex or whole systems thinking is no longer a 'good-to-have' organisational principle but a practical necessity. Complex thinking is about more than just simplifying tricky situations, it is about developing the tools to understand and address every day events with confidence.

It offers an approach for improved decision-making, adaptability, and innovation. This ultimately helps organisations thrive in ever-changing and stress-filled environments. As the world continues to evolve, those that adopt big picture approaches will be better positioned to not just succeed but to thrive.