• Erwan Hernot

Leading Is Too Complex? Give People The Power!

Key idea: we live in a VUCA world. For matching it, companies grow complex structures which come with theirs downsides. But complexity in companies is OK as long as you can inject simplicity down the hierarchy.

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Why is there complexity?

In the digital age, more than ever, companies have moved from one-dimensional universes to multidimensional universes. This passage is reflected in the fact that there are less and less players in the corparate game, who can continue to just have a siloed vision and segment theirs actions, excluding both cooperation with others and the accountability for the final result. Just as the structures of companies become more and more vague and complex, despite repeated calls for simplicity, the universes in which players evolve are more diverse and contradictory. The complexity is simply consubstantial with the need for innovation and a good customer experience.


What problems come with complexity ?


  • Organizational design can conceive complex structure. But then, as a critical success condition, you need managers with high communication skills; this is not the case, most of the time. As a matter of fact, complex structures require cooperation. But cooperation is, psychologically speaking, costly because you have to amend your way of doing things and getting out of your comfort zone.

  • Accountabilities are multiple thus unclear. People get lost : some of them can spend half of a day searching for THE specialist they need in the whole organization. And that happens for leaders too. Everybody struggles to grasp and navigate the system.

  • As complexity increases, identifying the value and function of any individual element—and where and how to intervene to manage performance — gets harder. You find the same difficulty when you want to smartly save costs where it is relevant to do so. Very often, you end up savagely cutting the most visible costs not the less crucial. “The organization becomes less like a machine responding precisely to the operator’s instructions and more like a complex natural system with a life of its own. “(1)

  • In the race between complex world and structure, the latter can’t simply keep up. The exponential production of procedures, processes, reporting systems and indicators is intended to introduce clarity and transparency. The outcome is opacity which leads to arbitrariness, as the people on the ground end up regaining power by handling the different processes, which end up being contradictory. Used to excess, these techniques demotivate the employees and cause anxiety, distress and suffering in those who bear them.

  • As companies grow larger, they become insular and complacent. People focus more on avoiding mistakes and securing their own positions than worrying about what customers care about. Inefficiencies and duplications creep in. Employees become detached and disengaged. Companies lost theirs bearings and move directionless.

  • Complexity aims at optimization. And optimization meets its intrinsic limits! The more you operate on a just-in-time basis, the more you should expect an incident to affect the entire value chain. “ Nassim Taleb takes the example of the organization of airports, so well thought out, in time and space savings, that the mere delay of an airplane destroys all the mechanics and creates uncontrollable chaos” (2). More generally, complexity and interconnection generate fragility: “an algorithm that does not recognize a pedestrian sign well? A whole smart city is crumbling” (2). Conversely, a suboptimal system, leaving more room for surprise and error, turns out to be resilient, capable of absorbing shocks.


Why are we over engineering things?


  • Leaders want control. Most leadership tools (and structures are part of them) are basically built for the purpose of being in control, to establish control or appear to be in control. This is indeed, more the illusion of control. Leaders make plans that don’t work, grand strategies that become obsolete long before they are realized and catchy visions which often seem like rituals. Leaders’ insistence on planning and controlling are more rituals than realities. This is because the complexity and emergence of unexpected and unintended behaviors and outcomes mess up neat and orderly plans again and again.

  • To some extent, companies are engineered systems. But they are also social systems where people act and interact in somewhat unpredictable ways. In this context, if you try to manage complexity with an engineer’s mindset, you aren’t going to get it quite right. Their approach consists in deconstructing systems into their parts and analyzing how these parts interact to make up the whole. It is the idea that phenomena can be explained completely in terms of other, more fundamental phenomena. This reductionist approach works well but only down to a limit aka complexity. Complexity involves large numbers of interacting elements. The interactions are nonlinear, and minor changes can produce disproportionately major consequences. The system is dynamic, the whole is, in fact, greater than the sum of its parts, and solutions can’t be imposed; rather, they arise from the circumstances

You can't manage complexity? Well, don’t!

Confusion, ambiguities and contradictions should be expected instead of rejected. Especially, get rid of the “or” and embrace the “and”. Modern organizational life is few absolutes and many relatives. It’s not about hard or soft data, but both. It’s not about short or long term, but both. And so on. Paradoxes can fuel energy and flexibility and are well suited for handling complexity. But then, leaders need to understand it: complexity (an indication of predictability) is different from complicatedness (an indication of understandability). Therefore problem-solving requires understanding which decision making process is relevant to apply in a certain system. In simple systems, experience is useful —“This problem is like the one we solved last year. Let’s solve it the same way.” In complicated systems, you need analysis before proceeding with a decision because no two problems are alike, experience is then a poor template. But complex systems defy analysis. Rational, linear cultures are deeply socialized in a tradition of understanding through analysis, though. You expect causality and seek a clear “why” answer to everything. And when you don’t find it, you tend to overdo analysis or simply freeze. But action can be a better way to understanding and solutions than analysis. In complex situations, muddling through and trial and error often work better. You need to experiment, pilot, and test conclusions. In a way, and it’s a paradox, to better steer an organization, leaders have to give up the illusion of control. Rather, control from the bottom up: in a complex system, everything happens at once, and problems ignore any central authority. Therefore overall governance must be spread among all the parts. The way to distribute control in an organization is through empowerment. The reason to empower people is not first to improve motivation but to improve manageability. The information in the network is much better than the information available in any individual node, including headquarters dubbed as the “control center.” People must be empowered to make their own decisions with the information they already have. Managers must not be afraid to put on theirs teams the constraints which lead them to integrate contradictory dimensions in their actions. Experience shows that they do this very well. In other words, the current complexity rehabilitates conflicts!


The good combination

The good combination is to empower people in modular structures. Robust complex organisms have a modular structure. Here are 2 examples : Agile and the “Auftragstaktik” as told by Christian Morel (3).

  • Agile is used for improving customer experience. It starts with rethinking and breaking the customer experience and what evolve around it. It forces to put the customer at the center and create 3 major modules: customer experiences teams, business processes teams, technology systems teams ; all of them which subdivide into smaller teams like “Choose a product “ and smaller “to see the product, choose between 4 pictures of it ”. Thinking in such organizational terms avoids to get you lost in complexity and drives you closer to real problems. And makes it easy to spot constraints and see performance of teams. Each functioning part operates with a degree of independence from the rest.

  • The British military formally adopted the Auftragstaktik (a tactic coming from the German military and before that, inspired by the way Napoleon led his armies) in 1987 by renaming it "mission command". The resulting doctrine states that "command must exercise minimum control over the forces so as not to unnecessarily limit their freedom of action, the subordinate ultimately having to decide for himself the best course of action to take. the success of its mission ”. The mission command model is widely used today, and can be found in the French military as well as in the United States Marine Corps and in Israel's army. The essence of the mission command lies in the extreme autonomy of the officers on the ground and in the overall understanding of the mission and its reasons. The advantage of these modular structures is that it allows separate systems to evolve and adapt as needed.

Leaders who don’t recognise that a complex domain requires a more experimental mode of management may become impatient when they don’t seem to be achieving the results they were aiming for. They may also find it difficult to tolerate failure, which is an essential aspect of experimental understanding. If they try to overcontrol the organization, they will preempt the opportunity for informative patterns to emerge. Leaders who try to impose order in a complex context will fail, but those who set the stage, step back a bit, allow patterns to emerge, and determine which ones are desirable will succeed.

(1) Taming Complexity, Harvard Business Review, Martin Reeves , Simon Levin , Thomas Fink and Ania Levina January 2020 (2) La fin de l’individu (de facto) Gaspard Koenig, 2019 (3) Les décisions absurdes Tome 2, Christian Morel, 2012

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