List
Print This Post Print This Post

Organizations grow in many ways: organically and quietly, organically and exponentially, by acquisitions or mergers etc. In every step of growth there will always be more problems to solve. This will lead to more structures, process and systems to address them and to cope with the new complexity.

At the beginning of the grow curve, the marginal gains of growth are worth that increased complexity. But left to continue in this way, there will be a threshold beyond which, coping with the complexity starts to counterweigh the benefits gained or to be gained. At some point, the value of complexity may enter into the negative.

It may be almost impossible at that stage to unbundle complexity and simplify the system, due to the nature of the interdependence of all the components that that complexity has generated. Then, rewinding is not an option anymore.

Organizations only know one way to cope with this situation, which is to cut headcount, downsize, right size, consolidate, shrink or whatever one wants to call it. But, deleting nodes in the network of interdependent connections does not guarantee a smaller network. Indeed that network may collapse. It is like having a five star hotel and deciding to cut costs by closing half of the bedrooms whilst keeping the heating going, or closing down the kitchen and offering chocolate bars. The problem is having the five star hotel in the first place.

The Organizational Growth-Complexity Paradox that I have described above is my translation of of Joseph Tainter’s explanation of how complex societies collapse (1988). Societies – he said – such as the Roman Empire, had a lot of sophistication, and, because of it, they could expand, they created more resources and needed to build the mechanisms to cope with their management. In the case of the Romans, there were plenty of weaker territories around to absorb, at least for a while. But that in itself became the problem: the management of complexity of communications, civil structures, the military, etc. At some point the system (the Empire) collapsed and split in two. The rest is history.

Incidentally, another way organizations cope with diminished returns in a stage of high complexity is the Roman Empire route: M&A.

Tainter went on to say that collapse was actually the best possible outcome for the Empire, and not always bad for people. He quotes archaeological evidence showing that nutrition of individuals was better after the collapse than before.

Clay Shirky (2010) has also applied this concept to the collapse of complex business models, particularly in the digital world.

Organizational complexity is often seen as inevitable and part of growth itself.  Sometimes it goes incredibly fast: recruiting, say, 500, or 1000 new people in a short period of time. We have recruiting machineries and perhaps on-boarding ones, but it is not clear how, a few months down the road, we will be dealing with the liabilities of the complexity that this rapid hiring has generated.  The same applies to M&A situations where the maths of 1+1= 2 don’t work.  1+1= a Big 1. The ‘Big 1’ is a different beast that cannot be understood or manage as the simple sum of its parts.

Every successful growth contains the seeds of failure. So, how we grow matters. Recognising the liabilities is the first step to gain healthy control of growth. But we need a few vaccinations and safeguards. That is tomorrow’s post. This one of today has already grown too much.

Keep up with the Daily Thoughts

Twitter Email

Would you like to comment?

Your email address will not be published. Required fields are marked *

To search my website, please use the form below.

  Daily Thoughts

September 27th, 2023

Redefining Talent Wealth

The war on talent McKinsey consultants started it with a book of the same title. By focusing on what it […]

September 8th, 2023

What I Learnt From The Monks: A Little Anthropology Of Leadership And Space On One Page

My friends, monks of a Benedictine monastery in the Highlands, Scotland, spend most of the time in silence. I mean, […]

August 23rd, 2023

Can We Rescue DEI From Its Trap (The Label)?

Most of the problems and challenges in organizations, together with most of the solutions, are behavioural in nature. It’s about […]

August 10th, 2023

Restructuring to force collaboration, is likely to create more anxiety than collaboration. Structural solutions for behavioural problems hardly work.

Sometimes restructuring is done with the intention of solving a collaboration problem. ´A people´ don’t talk to ´B people´; if […]

July 18th, 2023

The ‘Impossible To Disagree With’ School Of Management

‘Good leaders have empathy, respect employees and set the example. If you want to change things, you need to have […]

June 29th, 2023

Large scale change is not small scale change repeated many times. Small wins repeated are lots of small wins.

Large scale change, as a series of cascading small scale interventions (often under the philosophy of ‘small wins’) has dominated […]

June 6th, 2023

Culture change is not long and difficult. But we make it so…

I suppose the question is how long is long and how difficult is difficult? In general, business and organizational consulting have […]

May 19th, 2023

Value is an overused term in business and, as such, it’s becoming meaningless

Value, as usually used, means transactional monetary value. Usually it doesn’t mean intrinsic value, or value per se. For example, […]

May 4th, 2023

The importance of ‘critical thinking.’ Your own critical thinking is more effective at making your workplace better than any generic employee survey.

Build your own Employee Engagement argument for free. You can’t go wrong. Here are three baskets full of concepts: Basket […]

April 21st, 2023

´Busy-Ness’ Is A Trap

I went to a big conference where I was introduced by the chairman like this: “Welcome everybody. Lovely to have […]

April 14th, 2023

Training and culture change. The love affair that ends in tears.

It seems to be very hard for people to get away from the idea that if we just put individuals […]

April 11th, 2023

Teamocracies and Networkracies have different citizens: in-Habitants in team-work, riders in net-work

The old view of the organization is something close to the old concept of a medieval city, where citizenship was […]

April 5th, 2023

3 Ways To Get Approval From Your CEO Or Your Leadership Team

Way number 1: My team has developed these three options, A, B and C. Which one do you want us […]

March 29th, 2023

A Cheat Sheet To Create A Social Movement Tip = to shape organizational culture since both are the same.

Mobilizing people. This is another of the Holy Grails (how many have I said we have?) in management. Whether you […]

March 16th, 2023

Critical Thinking Self-Test: A 10 Point Health Check For Your Organization And Yourself. If any of these are a good picture of your organization, you need to put ‘critical thinking’ in the water supply.

Test yourself, and your organization. Do any of these apply? Doing lots, too fast without thinking. High adrenaline, not sure […]

March 9th, 2023

A culture of safety or a culture of training in safety?

Cultures are created by behaviours becoming the norm. Safety is at the core of many industries. Significant budgets are allocated […]

March 2nd, 2023

Empowerment is an output. If you can visualize it, you can craft it.

The real question is, what do you want to see happening so that you can say ‘people are empowered’? Employee […]

February 24th, 2023

A simple question will jumpstart your organization into change. It will also save you from months of pain spent reorganizing your people and teams.

The following line will short-cut months of (building) ‘alignment’, integration, reorganization, team building, coalition building, and any situation in which Peter, […]

February 20th, 2023

Lead Via Peer-To-Peer Networks – If you don’t lead via peer-to-peer networks, you’re only driving your car in first gear.

Peer-to-peer work, transversal, spontaneous or not, collaboration, peer-to-peer influence, peer-to-peer activities of Viral Change™ champions or activists, all of this is the […]

February 7th, 2023

Write a script, not a strategic plan

If you care about the journey and the place, you need a story. If you have a good, compelling one, […]

January 26th, 2023

3 self-sabotaging mechanisms in organizations

Organizations, like organisms, have embedded mechanisms of survival, of growth and also of self-sabotage. These are 3 self-sabotage systems to […]

January 10th, 2023

Who should be involved in culture change? All inclusive versus going where the energy is.

Many times, in my consulting work, I find myself facing a dilemma: Do I involve many people on the client’s […]

December 23rd, 2022

Tell what won’t change – Introducing 1 of my 40 rules of change

In any change programme that any organization wants to start, they will start by thinking of the things that they […]

December 16th, 2022

Scale It – Introducing 1 of my 40 rules of change

When creating effective change in any organization, there are 40 rules that, in my experience, are the key between success […]

December 5th, 2022

Assets & Strengths Base – Introducing 1 of my 40 rules of change

For more than 30 years I have been involved in ‘change’ in organizations. Again and again, some fundamental principles, and often […]

November 25th, 2022

Campaign It… is 1 of my 40 rules of change

When you filter out the noise, when you try to extract the core, the fundamentals, those ‘universal rules’ of change […]

October 31st, 2022

Hybrid or not hybrid? That’s not the question…

Culture is the new workplace If you want to have a conversation about the future of work, the nature of […]

October 24th, 2022

‘Powered by Viral Change™’: A Social Transformation Platform for the organization of the 21st Century

When we started to work on Viral Change™, as a way to create large scale behavioural and cultural change, and […]

October 14th, 2022

Corporate tribes, intellectual ghettos and open window policies

We talk a lot about silos in organizations usually in the context of Business Units or divisions. But these are not […]

October 7th, 2022

Peer Networks are the strongest force of action inside the organization

Peer-to-peer works, transversal, spontaneous or not, collaboration, peer-to-peer influence, peer-to-peer activities of Viral Change™ champions or activists, all of this is […]