Organizations as complex adaptive systems

These days, we live in a world where changes in the work environment have become constant, driven by factors such as globalization and world economic challenges. Developments on one side of the planet can have unpredictable consequences across the world which are manifested almost in real-time. Instability and continuous changes are pressuring decision-makers to act within a much shorter timeframe than many of them would like.

We live in a VUCA world

Taking all this into account there is no doubt that we live in a VUCA world. The acronym first coined in the army is now widely applied to business and society. It describes a world that is volatile, uncertain, complex, and ambiguous. To succeed in such an environment, organizations must embrace new ways of working and reflect this in the way they approach management activities.

Some research shows that “old-style” managers are one of the biggest obstacles to adopting new ways of working.

They prefer to stick to the traditional approach to organizational management where hierarchy, processes, and control are necessary to maintain organizational harmony. In this approach, organizations are viewed as machines in a predictable environment, assuming that improving the whole requires supervision, repair, and replacement of individual parts. Employees are those who represent these individual parts of the machine as if they were gears and levers. And the machine itself is built for efficiency and discipline, and if it is well lubricated, the right results will surely be achieved. This style of management is actually a reflection of our innate preference for causal determinism – the idea that everything that happens is caused by other things that happened before.

The human mind has an overdeveloped sense of cause and effect, which primes us to favor predictability (so-called “linear thinking”) over complexity.

There was a time and place in which this management style was appropriate and produced results, but it does not fully correspond to modern professions.

The century of complexity

The century of complexity has come. Complexity is a product of the 20th century that significantly gained momentum since the complexity theory became a scientific discipline. The complexity theory is primarily made up of 4 different theories that are used for modeling and analyzing complex systems which can include both the natural world, human relationships, as well as the organization of businesses.

The complexity theory is good news for managers as it offers them a new scientific way of looking at complex systems –a topic that involves the problem of managing organizations. Many people write and speak about complexity.

“I think the next century will be the century of complexity

Stephen Hawking
‘millennium’ interview on January 23, 2000 (San Jose Mercury News)

In a predictable environment, hierarchical structures with central control combined with the machine and linear thinking can work well. A few people at the top can figure out everything that’s going on and make a good decision. But in the VUCA world, the hierarchical structure with central control breaks down. A few people at the top don’t have enough bandwidth to deal with all that volatility, uncertainty, complexity, and ambiguity.

The alternative approach is to upgrade organizations’ structures from hierarchical, bureaucratic pyramids to powerful and fluid systems of distributed authority and collective intelligence.

Nowadays, more than ever, we need a new management paradigm. A paradigm that implies that an organization should be viewed as a complex adaptive system (CAS) and linear/machine way of thinking needs to be replaced with the so-called complexity thinking approach. At the end of the day, no matter how organizational structure looks on paper, every organization is a social collaborative network…every organization is a complex adaptive system.

Traditional managers talk about organization as a machine.

The new paradigm offers a new metaphor for the organization – it is a living system and its good management means growing and nurturing the system, not manipulating people.

Such an approach to management brings true engagement of employees which should be one of the main responsibilities of management; otherwise, the organization fails to generate value.

It is time to redefine management and leadership

Even after so many years, Peter Drucker is still one of the best sources for managers. Decades ago, he said:

“Management is about human beings. Its task is to make people capable of joint performance […]. Management is critical, determining factor.”

Peter Drucker

Just to make it clear, Peter referred to the management as the activity is critical, not the job of managers. But regardless, his statement leads to the conclusion that everything in an organization can be optimized, but if the view and approach to management stay unchanged then all the efforts are in vain.

In other words, if an organization is unwilling to change something that is critical and determining, it’s simply doomed to failure. It is time to redefine management and leadership…it is time for a new management paradigm.

Make a place for a new paradigm – Management 3.0

Management 3.0 is a metaphor for a new management paradigm explaining the way of approaching management in the contemporary environment. It is based on science and heavily relies on the complex systems theory, helping us to better understand how organizations and teams work. According to Management 3.0, good management means engaging people, improving the system as a whole, increasing value for clients, co-creating work, and managing the system, not the people. Any management practice that satisfies these principles is a good practice.

Management 3.0 is not defined by concrete activities; however, it offers specific tools and practices that are rooted in the mentioned principles and that can be easily understood and applied on a Monday morning in any team.

Everyone can design their own practice if guided by these principles and based on the needs of their context. Management 3.0 is redefining management and leadership.

If you are interested to hear more about the new leadership and management style, to learn (and try out) specific tools which can be immediately put to use, and to exchange experiences with those who are facing the same or similar challenges, Management 3.0 Foundation workshop is a great opportunity. Check it out, and see you there.

Author: Vladimir Kelava