Putting Organisation Complexity in its Place Flashcards
Institutional Complexity
As Defined by managers
Most manager define institutional complexity as:
The number of countries the company operates in / the number of brands / people they manage
Relate directly to what managers manages
Individual complexity
Individual complexity employees face poor processes, conducing role definition / unclear accountabilities
Relate directly to what individuals in the company faces
Putting organization complexity in its place`
Once executive realises that employees see complexity differently they can see where the organizational complexity hinders productivity
Identify where complexity if the problem, factors causing it and what’s responsible for it
Types of complexity
Imposed complexity
Inherent complexity
Designed complexity
Unnecessary complexity
Imposed complexity
Laws, industry regulations and interventions by non-governmental organisation
Not typically manageable by companies
Inherent complexity
Intrinsic to the business, and can only be eliminated by exiting a portion of the business
Designed Complexity
Results from choices about where the business operates, what it sells, to whom and how
Companies can remove it, but this could mean simplifying valuable wrinkles in their business model
Unnecessary Complexity
Arises from growing misalignment between the needs of the organisation and the processes supporting it. Easily managed once identified
Steps to reduce uncertainty
Survey the scene
Draw a map of what’s really going on
Reduce – and redirect complexity
Bolster skills where needed
Survey the Scene
surveys to employees, Structure interviews / focus groups – Quantitative data about intensity of complexity and qualitative information on what drives it, helps uncover hidden complexities
Examine organisation objectively
Manufacturer launch survey to ask about – clarity of roles, accountability, coordination, processes, predictability, how hard for individuals to get things done
Basically – get information about company – find about complexity
Draw a map of what’s really going on
Map can be any map there helps show particular breakdown and how much complexity occurred
Also show the level of coping skills possessed
Identify several problems executive were previously unaware of
Reduce – and redirect complexity
Remove what don’t add value
Channel rest of those who can handle it effectively
Eg. Redrew functional boundaries so groups served either the country office or corporate headquarter
Zeroed in on insights likely sakes volumes given customer needs and competitive situation
Bolster skills where needed
Make sure employees are equipped with skills and training to handle the complexities
Improve HR and other functional areas (careful talent review)
Examples of company with organizational complexity
Executives knew they had complexity problem
Rapid growth of company’s Australasia region – management attention and travel time = difficultly managing there and other 2 regions (Europe and US)
Employees don’t care about institutional complexity
Processes now increasingly bureaucratic, took long for decisions to filter through front lines, lot of work required to implement decisions
Duplicated roles and unclear role of definitions
