What is Complexity Management?

Over are the days when it was easy to recognize current and predict future challenges correctly, and having plenty of time to analyze them thoroughly, subsequently evaluating the options space well and implementing suitable solutions. Today companies are often confronted with a multitude of interdependent developments that are also more difficult to interpret. While an answer to a recent development is being found, the basic assumptions can develop so dynamically that solutions quickly become obsolete or lose their effect. Times have undoubtedly become more complex and dynamic. In addition, when it comes to complexity, there is often a feeling of being overwhelmed. Managers are held responsible for results without always being able to really think through and control all critical factors in their thoughts. Then complexity becomes a popular excuse when plans cannot be implemented as intended and success is delayed. We believe, however, that this is not a fatalistic situation. In numerous projects and seminars we have been able to convince ourselves that complexity can be a curse but also a blessing at the same time; if it is understood holistically and used skillfully.

From a holistic perspective, complexity describes the number and types of states a system can adopt. Three major drivers of complexity can be observed:

Interdependent diversity and variety, e.g. in the form of markets served, customer segments or products, including the extent to which they are interdependent.
Uncertain dynamics in two respects: On the one hand, the speed of change is increasing, as can be seen, for example, in ever shorter life cycles of products, technologies and markets. On the other hand, the number of directions in which companies must manage change is increasing. Moreover, the existing ambiguity in interpreting developments correctly is increasing and is making people feel more and more insecure.
Perception, which can serve as an absorption buffer for complexity. Clearly developed and well trained, it can help companies to better deal with the interdependent diversity and multitude of decision factors. It underlines the subjective nature of the phenomenon of complexity.

To cope with the multitude of interdependent developments, a comprehensive and holistic approach to Complexity Management is required. This approach needs to address all three complexity drivers mentioned above. Without a defined direction and a goal to be achieved, any course taken cannot be optimal. From our experience, in particular the following success factors contribute significantly to the quality of the result:

Clear responsibilities and goals
Comprehensive understanding of complexity, complexity drivers and consequences in the company and its environment
Clear strategic orientation and agile implementation of the identified fields of action

For more than 30 years we have been acting as market leaders for design and implementation of holistic Complexity Management. By defining the right product range, structures, processes, resources and network, we ensure optimal variance and flexibility with minimized complexity and smooth processes. In our projects we combine comprehensive industry knowledge with sound methodological know-how in order to overcome the challenges of complexity together with our customers. Thoroughly managed, complexity is a considerable lever to increase EBIT margin, innovative strength and sales as well as to reduce inventories, delivery and production costs.

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