In complexity, simplicity’s the key

If you measure legacy by millennia, Lao Tzu would rank among the world’s most influential philosophers. Historians say he lived in sixth century BCE China yet even now his thoughts resonate, especially nuggets such as: “To attain knowledge, add things every day. To attain wisdom, subtract things every day.” In a business world grappling with overwhelming complexity, such advice is comforting. Creativity expert and author, Matthew May, who worked with Toyota for many years, partly based his approach – the art of subtraction – on Lao Tzu.There’s an art to removing just the right things, in just the right way, to achieve greater impact in business, work, and life,” May explains. Unfortunately for much of the business world, the reverse is true. To cope with increasingly complex systems, leaders continue to  build complex organisations and convoluted strategies that become a major drag on responsiveness and a headache to steer and execute. “Complex organisations are far more difficult to manage than merely complicated ones,” researchers Gokce Sargut and Rita Gunther McGrath say. “It’s harder to predict what will happen, because complex systems interact in unexpected ways. It’s harder to make sense of things, because the degree of complexity may lie beyond our cognitive limits. And it’s harder to place bets, because the behaviour of a complex system may not predict its future behaviour. In a complex system, the outlier is often more significant than the average.” Fresh from this year’s Davos summit, Bain & Company’s Chris Zook has made an impassioned plea for business leaders to embrace greater simplicity. In a multi-year study, he and his colleagues found it to be at the heart of enduring success. “Not just simplicity of organisation, but more fundamentally to an essential simplicity at the heart of strategy itself,” Zook says. “In every industry, we discovered companies that were enjoying an inherent advantage in dealing with the increasing tension of faster moving markets and increased internal complexity due to this ability to keep things simpler and more transparent than their rivals.” Zook’s research will be outlined in a forthcoming book but in the meantime he asks: “Is it time to raise the pursuit of simplification to a higher level of importance in most companies?”

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