“You think because you understand ‘one’ you must also understand ‘two’, because one and one make two. But you must also understand ‘and’.” ― Mawlana Jalal-al-Din Rumi
Chances are, if you work in a corporate environment, you’ve heard the phrase “make the complex simple” a lot in recent times. These four unassuming words are now shared as a slogan of progress, particularly in big business, where leaders feel burdened by legacy systems, siloed teams and mountains of decision-making red tape. Turns out going digital and paperless is not the panacea for such cultural ills.
Ever since the invention of Lean manufacturing in Japan, management teams have promoted efficiency and waste-reduction in a bid to replicate Japanese commercial success and keep up with competitors. Jack Welch led such a charge in GE with his ‘Work-out’ sessions, with the aim of ‘busting bureaucracy’. The latest trend to be birthed from the lean movement is Agile. These management fads have been replicated and copied the world over, despite the fact that many of the fundamental ideas of Lean have been long lost in translation.
Some of us have lived through failed attempts at Lean implementation. One of the issues with Lean management theory was, as Porter and others have indicated, you can have only one cost leader in each sector. Too many of us have used Lean efficiency as our only means of competing (ie, chasing best-in-class), and we’ve not only failed to win that particular race, but we’ve meantime missed the opportunity to differentiate on value (ie, forming a class of one).
These days, industry sector lines are blurring at such a rapid pace that attempting to attain cost-leadership is even harder than it was, with new super low-cost entrants coming from industries we have not previously looked to as competitors.
Over the last few decades, almost by stealth, these fundamentally useful Lean management theories and spin-offs, albeit not strategically comprehensive, have evolved into the much simpler idea of simplicity itself. Consistent with the “just do it” era, and after many of us discovered that real operating model change is actually very hard to deliver, the fallacy of directive culture replaced the hard work of change. Just become simpler. (Because it makes sense).
I saw this evolution happen first-hand at a very large national retailer. The phrase “make the complex simple” first emerged when leaders saw an opportunity to out-price their competitor by running its operations more efficiently. The strategic idea was to use operational efficiency to make things easier for stores, which would in turn make things simpler for customers, thereby driving up volume, revenue and profit. Lacking the culture of Lean manufacturing or GE’s Work-out principles to tackle customer and store management processes systematically, simplicity became an end in its own right, and the catch-cry of simplicity became a cult. At one point, complexity was seen analogous to cancer – something to be excised.
One the products of this era was the aptly named “Project Simple”, a transformation of the kind with which most corporate employees will be familiar: waves of job losses, leaving in their wake gaping holes of knowledge and irreversible cracks in employee goodwill. If you detect a hint of cynicism in my language, you’d be right. At the time, however, most of us bought the narrative: fewer people means less complexity, more organisational alignment and lower costs. In a low margin business reliant on volume for its profit model, it was a powerful story.
Yet, with hindsight, the simplicity of headcount reduction turned out to be value-destructive in many ways and it was the conflation of “waste” with “complexity” that, in my humble opinion, led us there. That particular retailer is still paying, years later, for mistakes of judgement made under the guise of simplicity. Loss of market share, talent engagement and shareholder returns remain challenged.
It’s true that most corporations, if they get big enough, can become fat and slow. Yet the fact that complexity is a scapegoat and not root cause, only became clear to me recently. I was working with an energy business that was struggling with low consumer trust and unacceptably rising consumer prices when ‘simplicity’ rode in to save the day. The steed of choice was the KISS principle, a favourite trojan horse in Australian business. (If you’re not familiar with the acronym, KISS means ‘keep it simple, stupid’.) The argument for simplicity was made in service of customers and employees, who craved less red tape, fewer silos and simple prices and products.
With the KISS principle as mascot, leaders asked, why complicate things? We’ve been running this business for a long time. We just need to get back to basics. Don’t pile in new products or innovative ways of working. Just return to the simple things that worked before. The problem of course, was that what worked before was always going to be an inadequate response to the changing and unprecedented demands of customers. Yet simplicity described this way is seductive, particularly when shielding those in positions of power and privilege from an acute case of loss aversion bias.
It’s easy to see why complexity has become the bad guy and why simplicity can masquerade as a hero. We’re all overwhelmed with the choices in front of us. We’re all struggling to fit in, belong and get along in a confusing and increasingly noisy world. People generally don’t seek out complexity in their working lives and neither do we chase it as customers. We want frictionless experiences; anything else jars with the dynamic, connected and changing world that we live in. In such a context, nostalgia for a simpler past and dreaming of a simplified future is an entirely relatable response.
What we don’t see behind this delusion is that complexity is incredibly necessary, unfailingly important, and unfortunately irreducible.
Let me illustrate with a couple of examples. The human brain is incredibly complex – we have more connected neurons in our brains than there are stars in 1,500 Milky Way Galaxies, and every millisecond they fire together to produce seemingly simple decisions and fulfil our simple needs. We rely on the sophisticated complexity of our brains for almost everything we do, as well as plenty of unconscious functioning – such as breathing and wellness – that we mostly take for granted.
There’s also nothing simple about what it takes to produce a smart phone that you or any toddler can pick up and use intuitively. This is a simple device powered by a complex technological, social and economic context. The supply chain to create the hardware alone is a form of modern magic, let alone the complex systems of internet, data, developers, apps, creativity and connectivity required to produce the software that makes this little device the most integral tool of our modern lives. Imagine what it would take to recreate a smart phone if a natural disaster wiped out most of the planet’s population and infrastructure? A smart phone may be simple – for users – but it relies on a highly complex society for its continued existence and indeed its usefulness.
One way to look at this is that simplicity and complexity are irreversibly linked. You really can’t have one without the other. Simple outcomes are like overnight fame: they take 10,000 hours of hard work and 10 years to emerge. Just because you’re looking at the success story (aka the simplicity story) doesn’t mean that’s all there was to it. If seems like magic it is. Complexity is the magic.
Of course, some of us wish we were not so reliant on our smart phones. We might even, from time to time, dream of tuning in and dropping out. Who hasn’t had friends who’ve left social media as readily as taking a Feb-Fast detox? Then just as readily as March rolls in, notice how they are back on the wagon, because after all, it’s almost impossible to function offline. The fact is that we are webbed into complexity: socially, economically and materially. We have always been webbed into complexity – even in pre-internet days, we were entirely dependent on the ecology around us and our consciousness emerged from the no less complex a phenomena as the evolution of life. We are, and have always been, as separate from complexity as life is separate from the world. So, trying to excise ourselves from the context in which we live, I would argue, is a doomed endeavour.
The problem seems to lie with the fact that our gut-feel on complexity (and by default, complex systems) is pretty basic. We see something that we can’t (or don’t want to) readily compute, and we intuitively try to break it down, or look for the smaller thing right in front of us that makes sense and can be managed. This is known as reductionism. Like trying to compete only by stripping out costs. Or trying to return to processes that worked before despite an unprecedented future. Or reducing a business into ‘a vehicle to deliver returns to shareholders,’ without any understanding of the value created and shared with customers, employees, suppliers and communities. These reductionist tendencies have a ring of truth, but miss reality by a wide berth.
As markets create even more conditions in which complexity influences outcomes, we are seeing the harmful failures of our reductionist impulses far more often. For example, attempts to calculate the NPV of unpredictable future cash flows of an early stage venture, on which a huge amount of market experimentation still needs to be done, will lead to wildly inaccurate valuations. Seeking to control employee performance outcomes by putting a number on someone’s role-based performance and future potential, despite the complexity of human capability and fallibility of human bias, leads only to the suppression of performance and creativity. We can all pretend that the act of “calibration” makes such a pitiable data source more valid, but as the saying goes, garbage in, garbage out.
Complexity science is a relatively new field in the history of science, and it has a lot to teach us about where we’re going wrong with cults of simplicity. It tells us, for example, that one of the features of complex systems are that properties at higher levels don’t confer to properties at the level of component parts. That’s because complexity generates a thing called “emergent phenomena” – properties that are part of the collective entity that are not observed as properties of the parts on their own. Most of us know this as the idea that ‘the whole is greater than the sum of its parts’, and we intuitively understand it because we see it all over the natural world: weather systems, fractal patterns in snowflakes, ant colonies, for instance. If you’ve ever watched murmurations of starlings sway and roll over themselves in a beautiful undulating movement that seems beyond the imagination of the most artful choreographer, you’ll have seen this principle first-hand (please do google it, if not). Of course, this mesmerising sky dance is not a performance – it’s a highly effective defense strategy designed to confuse and confound predators. The defensive dance is an emergent property of the interaction between the starlings, not a property of the starlings themselves. If we are to understand complexity in systems involving people, which include markets and organisations, we need to understand this concept of emergent phenomena; it contains a treasure trove of useful insights.
Complexity matters and it’s a driving force in our world. It can’t be eradicated, only mediated and interpreted. It’s never helpful to overlook complexity and treat a complex context as a problem of simplicity alone – this only creates anxiety, tension and psychological dissonance, often destroying the value that we’re claiming to create. When we step back from the compelling spin – the command to “make the complex simple” – and ask what is really being demanded of us, we make surprising discoveries. We find out our foundation assumptions are often wrong: fewer people don’t lead to greater organisational alignment, for instance. We uncover the role that emergent phenomena have played in our success to date: the socially powerful presence of a fan base creates better odds of a home-game win, for example. We might also discover that focusing on the component parts almost never works with long term effect – how often do organisations claim to have solved a systemic failure of culture and governance by dismissing a few ‘bad apples’?
Understanding complexity doesn’t have to be difficult – we just need to change the lens. The most practical example is one quite close to home. Teams. When teams are not functioning well, most of us are habituated to pick over particular traits, behaviours or deficiencies in the individuals within it. Whereas once the team is formed, by far the most important factors for effectiveness are the emergent properties of the dynamic between the people in the team and between the team and its environment. Hiring for talent still matters, but defining talent is an inexact science at best, and it has a limited place when it comes to developing organisational and team performance. Rarely can you look to the individuals alone for answers as to what’s going on.
Sports coaches know this. Military leaders do too. They train for team decision making, strategies of team play, psychological conditions of safety, a sense of belonging (which is conferred by the group to the individual), shared goals, the perception of progress, shared skill development, as well as understanding and managing external factors that change the field of engagement itself. All of these are levers that determine whether the team will thrive at the emergent level of complexity. These are not you or me, or 1 or 2. These are Rumi’s “and”.
Finding simplicity in our world is not a consequence of complexity eradication, but rather of appreciating complexity and learning to work with the properties of complex systems, which ironically, is what Lean principles attempted to do before the cult of ‘just do it’ took over. We too often believe we are solving real problems through reductionist incisions when we’re simply doing ourselves harm. It’s time we recognised that simplicity is not all that simple. It’s time we became curious about the “and”.