A case in point is Apple’s attempt in 2012 to compete with Google Maps. Whereas individual elements may be easily copied, the interrelationships among multiple elements are hard to replicate. Thus they realize benefits such as collective security and more-effective foraging.įinally, complexity can confer inimitability. Flocks of birds or herds of animals, for instance, share behavioral protocols that connect the members to one another and enable them to move and act as a group rather than as an uncoordinated collection of individuals. That’s because the elements are often highly interconnected. For example, the fashion retailer Zara introduces styles (combinations of components) in excess of immediate needs, allowing it to identify the most popular products, create a tailored selection from them, and adapt to fast-changing fashion as a result.Īnother advantage that complexity can confer on natural ecosystems is better coordination.

In business, as environments shift, sustained performance requires new offerings and capabilities-which can be created by recombining existing elements in fresh ways. In biology, genetic diversity is the grist for natural selection, nature’s learning mechanism. What’s more, the redundancy and duplication that also characterize complex systems typically give them more buffering capacity and fallback options.Įcosystems with a diversity of elements benefit from adaptability. A company that relies on just a few technologies, products, and processes-or that is staffed with people who have very similar backgrounds and perspectives-doesn’t have many ways to react to unforeseen opportunities and threats. To begin with, having many different elements increases the resilience of a system. Both qualities can be a source of advantage or disadvantage, depending on how they’re managed. For our purposes, we’ll define it as a large number of different elements (such as specific technologies, raw materials, products, people, and organizational units) that have many different connections to one another. Even in the sciences it has numerous definitions. “Complexity” is one of the most frequently used terms in business but also one of the most ambiguous. What Is Complexity-and What Is It Good For? In the following pages we draw on our experience and perspectives in business, biology, and physics to offer some reflections on the nature, benefits, and costs of complexity and provide some guidance on managing it in business organizations. In addition to its more obvious costs, complexity confers critical benefits, especially in dynamic and uncertain environments. But the fact that such systems or organizations are difficult to understand doesn’t make them inherently bad. It can be cognitively demanding to understand how a system or organization made up of many very different interconnected elements actually works. Finally, always optimize your organization globally and keep fixing, repairing, and pruning. Embed a bias for change, avoid imposing too many controls on your people, and let the market judge which changes work. Their recommendations: In growing your organization, make sure that it remains modular in structure and that all components and connections conform to a small number of simple operating principles. The authors draw on their experience and perspectives in business, biology, and physics to offer some reflections on the nature, benefits, and costs of complexity and provide some guidance on managing it.

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