Idea in Brief
The Problem
Despite many important advantages, including greater resilience and adaptability, organizational complexity gets bad press in business.
Why It Happens
The costs of complexity frequently overpower the benefits, because cutting it out is harder than adding it.
The Solution
In growing your organization, make sure that it remains modular in structure and that all components and connections conform to a small number of simple operating principles. Embed a bias for change, avoid imposing too many controls on your people, and let the market judge which changes work. Finally, always optimize your organization globally and keep fixing, repairing, and pruning.
In business, complexity gets bad press. That’s not surprising. It can be cognitively demanding to understand how a system or organization made up of many very different interconnected elements actually works. But the fact that such systems or organizations are difficult to understand doesn’t make them inherently bad. In addition to its more obvious costs, complexity confers critical benefits, especially in dynamic and uncertain environments. In the following pages we draw on our experience and perspectives in business, biology, and physics to offer some reflections on the nature, benefits, and costs of complexity and provide some guidance on managing it in business organizations.