Learning to Live with Complexity & Positive Disengagement

Business has always been unpredictable and surprising, and the systems in business have always been complex. But due to the IT revolution, complexity affects everything—products, supply chains, organizations. This makes managers’ jobs far more difficult. It is harder to make sense of what is going on, make predictions about the future, and place bets. Complex systems go beyond the merely complicated because you can’t predict what is going to happen just from knowing the initial conditions. Our analytical tools have not kept up. The secret is making fundamental changes in how managers approach tasks such as: Forecasting. Drop certain analytical tools. Embedded in many are assumptions that don’t hold true for complex systems. Focusing on a few types of predictive information can do the job. * Mitigating risks. Reduce the need for accurate predictions. In an unpredictable environment, the best investments may be those that minimize the importance of predictions. * Making tradeoffs. Take a real-options approach. Small investments can give you the right, but not the obligation, to invest more later on. * Ensuring diversity of thought. Diverse thinkers better equip companies to deal with the unforeseen changes that are inevitable in complex systems. Project Disengagement: When it’s time to constructively exit most companies have poor processes for constructively shutting down projects and capturing whatever value and learning might have been generated within them. This seminar covers the topics of first, recognizing when you may be escalating commitment to a project that is failing, next, developing a disengagement plan if you have concluded that stopping it is the best thing to do, and finally coming up with a way of capturing as much value as possible from the experience of having done the project. Depending on the interest of the group, the example of Hewlett Packard’s “Kittyhawk” venture may be used as an exercise.