How Do You Manage Complexity?

How do you Manage Complexity? There are three basic steps. Identify complexity, develop a playbook, and make it repeatable. In this article, I will describe the first two steps. Then, I will outline the third step - creating a repeatable process for managing complexity. Once you've got this process in place, you're ready to tackle the next step: managing the complexity. Managing complexity is difficult, but you can simplify it by taking a look at some examples.

Managing complexity
Managing complexity requires you to think like a manager and be able to deal with change and uncertainty. It requires you to account for things that are beyond your own expertise, to lead people with different levels of expertise, and to operate in market environments you may have not predicted. As a leader, your first step is to think like a manager. Getting a promotion isn't enough to be a manager, and without responsibility, you're not a leader.

Companies can benefit from complex systems by focusing on the most important products, controlling costs, and measuring performance. By implementing these systems, companies can become leaner and more flexible. The strategy pays off as the economy improves. For instance, companies that have implemented complexity management strategies see their operating income rise by more than 20 percent. That is an impressive return on investment. The benefits of complexity management are endless. When companies understand how to manage complexity, they can focus on what they do best.

Identifying complexity
The increasing pace of change and global interconnections are creating unprecedented levels of complexity. These new levels of complexity pose significant challenges to business leaders, making it vital to identify and manage these risks to achieve business objectives. A recent study by KPMG, together with Lighthouse Global, found that 80% of senior executives believe that complexity is a significant issue facing their organizations. As a result, they have conducted surveys to identify the risks arising from increased complexity and provide practical guidance for managing them within acceptable levels.

The RT-305 study identified 40 attributes and 92 indicators of project complexity and tested each measure in a survey. The purpose was to determine which measures of complexity were statistically significant. In a sample of 44 projects, the researchers received responses ranging from 14 to 30. Of these, thirty-four projects were considered to be high-complexity projects. The data analysis revealed that 37 of these attributes were statistically significant and corresponded to 23 attributes within 11 categories of project complexity.

Creating a playbook for managing complexity
Playbooks provide guidance and general guidelines to handle processes that are more complex. While there is nothing wrong with having a rule book, there are some instances where creating a playbook would be preferable to solving a problem. For example, in a customer success department, one wrong move can lead to losing a large client. Having a playbook will help you identify at-risk accounts and upsell opportunities.

To avoid getting lost in the complexity maze, develop and follow a playbook to implement the six rules of complexity management. The six rules are easily implemented and have multiplicative effects on performance. For example, by developing a playbook that outlines how to handle different types of complexity, you will be able to better understand which processes should be eliminated, which will increase profitability. Once you have defined the rules, you can begin implementing them into your supply chain.

Creating a repeatable process for managing complexity
Repeatable processes are sets of actions that are easy to duplicate. These can include business processes, workflow schematics, template, programming instantiation, or reusable program components. A repeatable process will allow for efficient use of proven components and minimize the need for unnecessary variations that tie up time. To build a repeatable process, an organization should first understand its goals and objectives. Once this understanding is complete, it can begin to design and implement repeatable processes to achieve the desired business goals.

A repeatable process helps to improve efficiency, quality, and consistency. When a business has a consistent approach, decisions are less complex. There are fewer roadblocks and metrics are easier to track. When a business is implementing a complex process, it can seem daunting and overwhelming. Boston Consulting Group partners offer some tips on how to make complex processes repeatable. By documenting the process, a business can make decisions faster, save resources, and improve consistency and quality.