The Complexity Wakeup Call
The world is only going to get more complicated and move faster – will you be one of the few keeping up?
For the past few years I’ve been talking about and sharing with anyone who will listen – clients, seminar and learning session attendees, keynote audiences – the world is moving faster and getting more complex all the time. I see people nod their heads in agreement, but I am not sure any of us does a lot about it. When I work directly with clients, I know the logical conclusion has been drawn that it is harder than ever to keep up and takes more time to understand the ecosystems of our own business as well as all the forces that impact it. And I read a lot and see quite a few books about innovation and doing things differently today, but I don’t see much of it happening. Many companies or leaders just aren’t set up or able to process how fast changes are occurring. The problem is, a few, nimble individuals and organizations are and if others don’t come to grips and behave differently in today’s harsh reality, they will soon find themselves desperately trying to catch up with those that do.
Here’s some convincing evidence to support this position.
IBM just came out with a fascinating report entitled, “Capitalizing on Complexity: Insights from the Global Chief Executive Study,” a summary of findings from interviews with more than 1,500 CEOs around the globe who run companies in the finance, distribution, communications, industrial manufacturing, and public sectors. The report lists four key findings:
- Three-fourths of the CEOs polled said they anticipate even more complexity in the near future.
- Most now consider creativity (thinking differently) as the most important leadership quality.
- The top companies are outperforming others with the help of their customers. Specifically, they’re integrating customers into their core processes to aid in the development of new products and services.
- Other companies are leading their markets by figuring out ways to manage complexity for their organizations, customers, and partners.
What do CEOs mean when they refer to “complexity?”
According to the report, it’s not just that opportunities, threats, and changes in the marketplace are happening faster or with less predictability. It’s that they are becoming increasingly interconnected and interrelated in ways we have never had to deal with before. The result is a significantly more volatile and uncertain world. One that is highly susceptible to tectonic change on a moment’s notice, and one where incremental change may no longer be enough to survive.
The report goes on to say that in order to position their companies for success in the 21st century, CEOs now feel that they and their teams must “lead with bold creativity, connect with customers in imaginative ways, and design their operations for speed and flexibility.” Easy stuff to say.
What really stood out for me was the feeling among many of the CEOs that their organizations were not prepared to effectively cope with current levels of complexity. Despite these concerns, however, a small group of companies was learning to meet complexity head-on and turn it into an opportunity rather than a threat.
How? Through three distinct strategies.
Employing creative leadership. This was defined as “inviting disruptive innovation while encouraging people to drop outdated approaches and take balanced risks.” I call it thinking differently day to day and it includes challenging assumptions, getting clear on winning, developing new perspectives, focusing on targets and re-focusing frequently. It requires a skill set that enables individuals to pause and ask questions to trigger their brains versus just running constantly.
Reinventing customer relationships. Around the globe, CEOs are increasingly seeing the value in developing intimate relationships with customers. Many companies are now making concerted efforts to actively engage customers in helping them differentiate their products and services. This also requires a new set of thinking skills. Individuals and organizations must be willing to suspend beliefs about what has always worked, what they are absolutely, positively sure is so, and constantly question themselves to forge new relationships in new ways.
Building operational dexterity. This is similar to a term I have been using for several years now – “strategic agility.” It refers to the ability to act swiftly and with focus when unexpected challenges or opportunities present themselves. It includes the ability to make change happen on your terms rather than sitting back and waiting for it to dictate how you will react. It requires an organization that can shift appropriately when necessary and focus relentlessly all the time.
Ultimately, says the report, CEOs must “shake up their portfolios, business models, old ways of working and long-held assumptions.”More important, they need to get a better grip on what customers really care about, and get rid of outdated ideas about how their organizations create and deliver value.
Pause and consider your business environment today. Practice thinking instead of just running. Ask yourself if you are dealing with the pace and complexity well. Ask others what they have recently learned that surprised them. Consider what you need to unlearn. It is not going to slow down or get simpler. You have to learn how to deal with it effectively in new ways!