Complexity Management

Although this title can seem a little absurd, this article aims at understanding better the principles of complexity management. In effect, complexity is a large concept, which usually seems unmanageable for most managers. Let us start with the pillars of complexity management for businesses. Strategy Alignment with Complexity Management Most projects fail because this condition
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Although this title can seem a little absurd, this article aims at understanding better the principles of complexity management. In effect, complexity is a large concept, which usually seems unmanageable for most managers. Let us start with the pillars of complexity management for businesses.

Strategy Alignment with Complexity Management

Most projects fail because this condition is not respected. In many organisations, departments and their people often act and make decisions for themselves.

They do not pay attention to the business strategy. Each one wants the best results for its department. However, managers should understand that their decisions also impact on the rest of the business.

For this reason, any project must involve a team project formed by people from all the departments and functions in the company. This team project should think and act according to the common interest of the business.

Thus, all the strategies have to be aligned with the business strategy. In effect, interactions and complexity will be easier to manage if all the strategies are pointed towards the same goal.

The basic premise of Complexity theory is that there is a hidden order to the behavior ( and evolution ) of complex systems , whether that system is a national economy , an ecosystem , , an organization , or a production line. In business and finance, complexity, theory places its focus on the ways a factory or company resemble an ecosystem or market, rather than a machine ” whose parts and functions have been plucked out in advance” , according to David Berreby. He maintains that the organization of systems is no accident , but ” the results of laws of nature that we don’t yet fully understand.” Once understood, managers will learn that if left to function on their own, system organize themselves, bringing about ” order for free”. 

Transparency on Complexity Management

Nowadays, we think that all the information is accessible to anyone but this is not entirely true. Although there is a lot of information in organisations, everyone tries to keep it for himself.

Information is synonym of power and nobody wants to share it, for fear of losing power of decision in front of others.

However, any decision should be revealed to the entire organisations, so all the departments are aware of what is actually happening.

This will enable them to make decisions, which will suit to the business strategy. Thus, the conclusion is that information must be available easily to avoid useless interactions, which will cut complexity.

Sustainability on Complexity Management

When starting new projects, organisations must beforehand make sure that it is not a precipitated decision and that it is suitable for this kind of organisation. In effect, all systems are not good and effective for all businesses.

Organisations have different needs and requirements, which should be satisfied by different and suitable decisions and implementations. Preparation is a key factor for sustainability of any project implementation.

Sustainability enables to have less complex systems. In effect, sustainability involves long-term relationships, which imply less multiplication of interactions and then less complex systems.

Complexity can be easier to manage through smaller units. In effect, large systems imply a tremendous amount of interactions whereas smaller units are more manageable.

Using modular systems is the key to implement projects successfully and outstrip complexity. Although interactions still exist, they are easier to manage through modular systems because any other can replace them at any time.

Complexity is not a threat anymore if you control it with modularisation.

The concept of modularisation is developed into a chapter of Vivek Sood’s book, The 5-STAR Business Network (http://bit.ly/5-STARBN), and will be even more deeply analysed in his next book,

https://5starbusinessnetwork.com/

Outsource, Outsmart, Outprofit. Therefore, these four elements are the most important pillars in CM.

If you understand how to use these pillars, cot will be made much easier for you business. Although complexity can be helpful, it is not worth it to let it control your business. Complexity will certainly beat you. However, you can learn how to be able to manage it and tame its interactions, by using these few elements above. You can find a more detailed approach in the book The 5-STAR Business Network, by Vivek Sood.

Complexity Management-Challenges and Opportunities in Today's Supply chain

Vivek Sood: Sydney based managing director of Global Supply Chain Group, a strategy consultancy specializing in supply chains. More information on Vivek is available on www.linkedin.com/in/vivek and more information on Global Supply Chain Group is available www.globalscgroup.com 

Vivek is the Managing Director of Global Supply Chain Group, a boutique strategy consulting firm specialising in Supply Chain Strategies, and headquartered in Sydney, Australia . He has over 24 years of experience in strategic transformations and operational excellence within global supply chains. Prior to co-founding Global Supply Chain Group in January 2000, Vivek was a management consultant with top-tier strategy consulting firm Booz Allen & Hamilton.

Vivek provides strategic operations and supply chain advice to boards and senior management of global corporations, private equity groups and other stakeholders in a range of industries including FMCG, food, shipping, logistics, manufacturing, chemicals, mining, agribusiness, construction materials, explosives, airlines and electricity utilities.

Vivek has served world-wide corporations in nearly 500 small and large projects on all continents with a variety of clients in many different industries. Most of projects have involved diagnostic, conceptualisation and transformation of supply chains – releasing significant amount of value for the business. His project work in supply chain management has added cumulative value in excess of $500M incorporating projects in major supply chain infrastructure investment decisions, profitable growth driven by global supply chain realignment, supply chain systems, negotiations and all other aspects of global supply chains.

Vivek has written a number of path breaking articles and commentaries that are published in several respected journals and magazines. Vivek has spoken at several supply chain conference, forums and workshops in various parts of the world. He has also conducted several strategic workshops on various aspects of supply chain management. He received his MBA with Distinction from the Australian Graduate School of Management in 1996 and prior to these studies spent 11 years in the Merchant Navy, rising from a Cadet to Master Mariner.

More information on Vivek is available on www.linkedin.com/in/vivek  and more information on Global Supply Chain Group is available on www.globalscgroup.com

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