Most organizations tend to get more complex over time.
New processes, roles and reporting lines are added. New steering groups and advisory boards are established. New cross-functional initiatives are launched.
All with the best of intentions. But the cumulative effect is increased complexity…
…which means that goals and KPIs start to conflict, we spend more time in internal meetings, and have trouble reaching agreement on key decisions.
This means that we, from time to time, need to make an effort to simplify. And ideally, we should also try to not to add too much complexity in the first place when we make changes.
However, I find that business gurus often come up with rather simplistic solutions to this problem (e.g., “get rid of low value added activities” [OK, what are those?]).
But it’s not simple to achieve simplicity.
We first have to understand the underlying sources of complexity, and idenfity the right intervention.
And there isn’t one, but multiple forms of complexity.
In a new working paper, I use three different systems theories and describe how they lead to three different views on organizational complexity, related to:
- The goals and functions of the organization (or of the sub-units)
- Work processes and interdependencies
- The vertical structure (management layers; reporting relationships)
I summarize the key design principles in the framework shown in the table below (This table basically summarizes most of what I know about organization design!)
My hope is that you can use this framework to identify the causes of complexity and discover potential solutions.
This is still just a working paper, so it needs to be further developed before it can be published in a journal.
But I share this as “work in progress” in case you want to take a look and perhaps give me some feedback before I finalize the paper in the Autumn.
Feel free to leave a comment below!
Image: Simplification by YuguDesign from the Noun Project
Peter Turgoose says
I like what you are theorising but I think that you are confusing complexity and complication. Complexity is a natural consequence of a business’s positioning, e.g. multiple products, multiple markets etc. Complexity can be reduced by a well thought through design for the operating model. Complication is the result of poor design and can be manifest in many of the ways you refer to. This is not a matter of semantics, complexity can be designed for, complication is a result of poor design. I do look forward to your final conclusion on this.
Nicolay Worren says
Peter, the three perspectives that I discuss in the working paper lead to three somewhat different definitions of “complexity”. The everyday use of the term “complexity” is quite unclear and often confounded with “complicatedness”, as pointed out by Prof. Nam Suh in his book. In the working paper, I further distinguish between necessary and unecessary complexity; it is the latter that we can and should try to reduce. The first is an inevitable result of technologies, markets, etc.
L.J. Lekkerkerk (Hans) says
Why would ‘reduce complexity’ be the ultimate goal of design?
Organizations have multiple goals linked to multiple value(s) to be created for various stakeholders.
So maximizing goal realization potential (a.k.a. controllability Ashby) at large and a structure that doesn’t hinder that.
Therefor 2 ways for the designer:
1) Reducing complexity, or reducing interfaces, reduces disturbances caused by the structure, and reduces the propagation of a disturbance through the network of units/tasks. => less need for control (obviously the outer world is causing enough non-structure related problems like covid, shortage of labour, …)
2) increasing regulatory performance by decentralizing control; in other words, solve problems where they are instead of delegating up, and await a late and usually ill-informed managerial response.
In the earliest writings of Galbraith he mentions 1) and somehow that disappeared in his later work, where he focuses on lateral linking and information processing to increase regulatory power.
Nicolay Worren says
Hans, yes, organizations have multiple goals, and a key priority is to organize oneself so that the goals don’t interfere with each other.
Nicolay Worren says
Peter, I forgot to mention: The main difference according to Nam Suh between “complicatedness” and complexity is that the former is about variation, i.e., the number of elements (e.g., how many products, process steps, branches, or departments we have) and the latter relates to interactions between the elements. Anothter key insight of his is that complexity is always a relative concept, it is relative to what you are trying to achieve. So, for example, five layers of management may be excessive for a small company but quite appropriate for a large company.
L.J. Lekkerkerk says
From the table above I found the working paper (https://docsend.com/view/rad9i5ufzncpqccp) Can you please put your ref’s in an alfabetical APA-list to speed up my search for the type of systems sources you use 😉
When thinking and writing about organizational complexity it helps very much when you use Stafford Beer’s (2000) Diagnosing the system for organization (Wiley) and add to that the more practitioner oriented VSM-inspired book by Hoverstadt The fractal organization.’
I couldn’t find them in the ref’s.
Additionally, you may want to dive in the, at last, translated handbook of Lowlands sociotechnical systems design (often presented at EODF conferences). You’ll appreciate the approach to structure design and recognize its power to reduce complexity ‘From complex org’s with simple jobs, to simple org’s with complex (=high QofWork) jobs.
Kuipers, van Amelsvoort Kramer 2019 New ways of organizing; alternatives for bureaucracy, Acco publisher, Leuven.
Obviously this is my/our bias at Radboud University OD&D-group, but I honestly think theses sources will help the OD field more towards reducing complexity.