Ferraro - Intro to Complexity Sci in Org Mgmt 2009

Introduction to Leveraging the Principles of Complexity
Science in Organizational Management
- Joseph M. Ferraro
What is Complexity Science and how does it relate to an organization?
At the most basic level Complexity Science studies the organization that can occur within
a fundamentally complex and seemingly chaotic system of dynamics. The goal of which
is to characterize emerging properties and to identify patterns of organization and
relationships among the dynamic factors to better understand the complex interactions
within the system and predict the outcome of the changing system. Within an
organization or business, complex dynamics occur because of a multitude of internal and
external factors. The compounding effect of these multiple dynamics is what makes an
organization itself a complex system.
Internally within an organization the differences in human personalities, management
styles, levels of individual motivation and means of communication all drive a dynamic,
interactive environment among human resources. Layered across these human resources
are various functions and hierarchies that create their own set of complexities.
Horizontally across the organization different functions operate under different priorities
toward their own unique objectives. While vertically, the different levels of employees
operate with different understandings and perspectives of the organization and varying
degrees of visibility toward the strategic direction of the organization’s overall goals.
Externally, the operating environment changes in competitive nature along with changing
consumer preferences, dynamic economic climates and any number of industry-wide and
geographically dispersed set of factors, all of which create a complexity of variables
through which an organization must navigate.
Why does a company need to understand the complexity within its organization and
what does this understanding bring?
Organizations have survived successfully for thousands of years, but in the evercompetitive operating environment of the 21st century, survival depends on a company’s
ability to manage itself in a superior manner as well as to compete effectively with its
competitors. The ability to understand and manage the internal and external complexities
of the organization provides the necessary competitive advantage to develop a dynamic
strategy that is effective and necessary to compete in today’s environment.
Understanding how each dynamic changes individually and collectively over time, and
how these dynamics can be structured to work collectively, are the foundation for
successfully leveraging complexity for long-term success.
Leveraging the understandings of complexity allows the organization to operate more
efficiently and achieve goals more effectively. In comparison to the organization that has
no understanding of the complexities within, the educated organization has a competitive
advantage in that they are more flexible to change, more strategically reactive, and more
effective in solving problems and developing innovation.
Complexity Science helps to understand, manage and ultimately leverage the complex
dynamics of humans and their related goals, projects and strategies as they change
dynamically over time due to such factors as:
Requirements changing
Pitfalls that make certain goals impossible or obsolete
Individuals coming and going from a project, group or workforce
Timelines and priorities changing
New, better ideas that develop
The different personalities of employees
Complexity Science provides the framework for understanding the value of collaboration
and why and how it can be successful. It provides the story behind the path that an
individual, a group or an organization goes through when collaborating to solve a
problem, manage a project or otherwise interact toward a common goal. Just as any
scientific discipline explains in logical form the realities of our natural world, so too do
the principles of Complexity Science explain the benefits of collaboration as an emerging
property that arises from the complexities of an organization.
What are the benefits of leveraging the principles of Complexity Science in an
In the typical hierarchical structure of an organization, departments and functions often
operate independently with insufficient communication and suffer from the “silo effect”
resulting in independent, possibly conflicting, operations characterized by lack of
continuity and limited innovation. In contrast, Complexity Science teaches us how to
utilize collaboration to solve issues collectively leading to:
A common understanding of issues, problems or goals
More prolific and effective sharing of knowledge
Improved innovation, creativity, etc.
Cross-functional understanding of issues
Improved focus on tasks, goals, priorities, etc.
More comprehensive solutions
Development of a more fluid process for idea generation, problem solving, etc.
Simultaneous progress towards order out of chaos
The organization that understands complexities and understands how to manage and
leverage the related dynamics can work collectively toward effective results with a
common set of strategies and priorities in real-time. Failure to recognize complexity and
the need to collaborate leads to goals and priorities that appear common at first but
change independently over time.
The principles of complexity tell us that there are identifiable dynamics that occur within
a system like that of an organization. Within an organization, the heads of each group or
function, and the executive management are often decisions makers that have only
limited knowledge of the details of what make up the key components of decisions and
strategies. They are often the managers of knowledge rather than the developers or
experts in the knowledge itself. Collectively engaging the lower-level employees who do
the work and have the knowledge with all ranks within the organization helps to leverage
that knowledge to establish common understanding and improved focus on strategic
goals for the organization as a whole.
How does an organization implement the principles of complexity for improved
The principles of complexity suggest that order can emerge in systems that are
fundamentally complex. Understanding that complexities exist within the organization
and identifying their level of influence is the first step toward creating an organization
that successfully leverages the principles of complexity for effective results.
Dynamics that work in conjunction with each other can lead to more identifiable results
with common properties, versus independent dynamics that lead to independent results
that may or may not have common properties. These common properties are what an
organization identifies as strategic initiatives, goals or operating priorities and what the
organization hopes that all employees are working toward. Within the organization it is
possible to recognize areas where collaboration can improve communication and produce
common understandings of key priorities, strategies, etc., as in the following cases:
Managing a project
Developing a strategy in a changing environment
Solving a problem
Knowledge sharing
Improving communication
Fostering innovation
These areas may involve dynamics that work independently and require collaboration, or
they may exist as external dynamics that simply need to be understood collectively. The
idea is to create a managed complex system from the components of the organization (the
internal dynamics) that are trained and managed in such a manner that common,
predictable results are achievable. These components should also be exposed collectively
to the external dynamics to insure a common understanding of what may be out of the
direct control of the organization as the environment changes.
The organization must also create a culture of collaboration that identifies with and
rewards order, innovation, common understandings and effective results. The
development of this culture begins with collaboration that involves discussion of
problems collectively and cross-functionally to achieve a common understanding of
roles/responsibilities, priorities and goals. The organization can also utilize cross-training
to develop a more comprehensive understanding of the inner-workings of the
organization across its entire base of human resources.
Most organizations exist in a hierarchical form with the delegation of responsibility
flowing from the top down through a particular chain, or silo, which leads to independent
understanding of goals and potentially divergent results. In contrast, the organization that
integrates groups, project teams, functions and individuals to solve problems allows the
different dynamics of people, operations, understandings, etc. to work together towards a
common goal. A hierarchy can and will still exist, but it will be project-oriented or crossfunctional in nature, rather than independently functional as it exists within an
Finally, the management of an organization plays a key role in the direction and the
reality of how the principles of complexity can be leveraged within the organization.
Different styles of management lead to different organizational structures and different
realities of collaboration. As an example, at one extreme with a structured, organized
leader, the organization will find itself with a structured, rule-based environment for
knowledge sharing, collaboration and problem solving, while a creative, flexible leader
may create a more fluid environment. Individuals at all levels of an organization are
fundamentally different, but the way in which they interact follows directly from the
characterization of the leader.
In an environment of collaboration there are some risks that arise from the varying
degrees of knowledge within the organization and the structure under which functions are
defined. There is always the risk of exposing a lack of knowledge and leadership of
higher-level employees to lower-level employees and the risk of insubordination. And
across functions, struggles of power and initiative can develop if roles and
responsibilities are not properly defined. There is also some difficulty in utilizing a
collaborative environment with a divided hierarchy for problem solving or innovation as
the inherent ranks are intended to separate levels of knowledge and reporting structure.
But if employees are trained and managed to understand and recognize the benefits of
this type of environment, a united workforce will emerge and the benefits can be
recognized for the long term.
These risks themselves can be leveraged as a dynamic to the advantage of the
organization. A collaborative environment motivates employees to gain a deeper
knowledge of their own responsibility as well as the responsibility of other groups, and
ultimately exposes the more motivated and talented resources within the organization.
The collaborative environment forces the organization to understand and define roles and
responsibilities, which only improves focus on strategic objectives. The environment
must be developed to put politics, hierarchy and pride to the side for the benefit of
knowledge sharing for the organization as a whole.
What can we take away from this understanding?
What we’re talking about here is the quality of the emerging property of the complex
system that is an organization. And the emerging property that we’re trying to develop is
common understanding and efficient and effective movement towards a common goal or
It is important to understand that emerging properties take time to develop. Releasing
results, communication or even products often helps manifest the development of these
properties. And exposing everyone to the results, and not just the developers of the
results, helps everyone understand how and why the properties are emerging and
An organization is a complex system over which management has control of most of its
components and the ability to affect the emerging properties to its advantage. At it’s
most basic form an organization is a fundamentally complex system, and, when managed
effectively, the order that results can allow the organization to improve focus on strategic
initiatives and to more effectively achieve goals and manage priorities.
Collaboration and common understanding as emerging properties are the real key to
leveraging complexity in an organization. The organization must understand the
dynamics that exist and utilize techniques like collaboration, cross-training and crossfunctional teams for problem solving and efficient knowledge sharing to insure those
dynamics are used to their advantage rather than disadvantage. And as the organization
develops a more collaborative environment, the shared knowledge and problem solving
skills along with a culture of improved innovation will evolve over the long term and
allow for flexible operations and the ability to implement dynamic strategy in a rapidly
changing environment.