Why Managers Haven’t Embraced Complexity
Richard Straub writes in the Harvard Business Review, on a great piece about what stops managers from adopting complexity views:
Complexity wasnt a convenient reality given managers desire for control. The promise of applying complexity science to business has undoubtedly been held up by managers reluctance to see the world as it is. Where complexity exists, managers have always created models and mechanisms that wish it away. It is much easier to make decisions with fewer variables and a straightforward understanding of cause-and-effect. Here, the shareholder value philosophy, which determines so much of how our corporations operate these days, is the perfect example. Placing a rigid priority on maximizing shareholder returns makes things clear for decision-makers and relieves them of considering difficult tradeoffs. Of course we know that constantly dialing down expenses and investments to boost short-term margins inevitably damages the long-term health of the company. It takes a complexity approach to keep competing values and priorities and the effects of decisions on all of them in view â€” and not just for management, but equally for investors, analysts, and regulators.
In the short term, a reductionist mindset is most useful for winnowing away externalities so that you can show that what YOU did had real results in the real world, thus justifying your value to the accountability chain and the shareholders.