Running a business has become measureably harder over the years. According to the Boston Consulting Group’s Complexity index, business complexity has increased by a factor of six over the past 60 years.
Part of that involves organisational complexity. The number of structures, processes, committees, decision-making fora and systems has increased by a factor of 35 in that time too.
Managers today face not alone greater complexity but also the task of balancing seemingly paradoxical challenges. Your firm wants you to produce goods of higher quality yet at lower prices. Services need to be globally consistent yet at the same time responsive to local needs. Finding a path through involves using a combination of hard and soft approaches, say Morieux and Tollman in this interesting book that prescribes some practical solutions to the problems often seen in organisations.
The hard approach to management, characterised by Frederick Taylor’s scientific management philosophy and later ideas such as reengineering and business process design, is in many ways responsible for causing much complexity. The belief here is that structures, processes and systems have a direct and predictable effect on performance and as long as you pick the right ones, you will get the results you need.
Dangerously counterproductive
While this approach may have worked in the past, it is dangerously counterproductive now.
According to the authors, the soft approach, characterised by the belief that good performance is the by-product of good interpersonal relationships, is not without its difficulties either. Both approaches, in fact, seek to control the individual. The only difference lies in the fact that the soft approach assumes that what really matters is emotional rather than financial stimuli.
The hard approach raises obstacles for people and contributes to dissatisfaction and disengagement and then because people feel bad and ineffective, the soft approach is employed to help them feel better. This merely addresses the symptoms and not the causes of the problem.
Complexity can only be addressed by people using their judgment in the moment so autonomy is essential. No amount of structure planning or formal rules and procedures will ever be enough to anticipate the problems people face on the ground, the solutions they need to devise or the opportunities they will recognise.
The rules Morieux and Tollman outline are based on the premise that the key to managing complexity is the combination of autonomy and organisational cooperation.
The first task managers should address is getting a true understanding of performance – what people actually do and why they do it. This is crucial as people’s behaviour at work is performance in the making. People’s behaviour can be understood in terms of three key elements: the goals they wish to attain; the resources available to help them and the constraints that hinder them.
Human behaviour
Crucially, the authors observe, the formal structures and processes organisations put in place have only an indirect impact on behaviours and performance and that impact depends on how they combine with each other to shape the goals, resources and constraints to which people adjust their behaviours. When managers gain an in-depth understanding of the dynamics shaping human behaviour in an organisation, they are then in a position to use the usual tools that they have available
– organisational design, metrics and role definitions, for example – to influence the work context and nudge people’s performance in a direction that will improve it.
The important distinction is also made here between measuring and observing, as not everything can be measured. Managers need to be present to observe and gather, through conversation and interactions, the non-measurable data that reveals the content and results of cooperation. Former Manchester United manager, Sir Alex Ferguson, is quoted as a proponent of this approach: "I don't think many people fully understand the value of observing. I came to see observation as a key part of my management skills."
This should not be confused with micromanagement. The goal is not to constantly tell people what to do but rather to use this in-depth knowledge to continually shape the work context to foster cooperation.
