Addressing Strategic Challenges and Complex Issues

The world economy is currently going through significant change Credit crunch Recession Global recession Volatility of oil prices Global climate change Requirement for new energy sources

Credit crunch

Recession

Global recession

Volatility of oil prices

Global climate change

Requirement for new energy sources

The global business environment has become much more interconnected over the last 15 years Introduction of new communication technologies Internet E-Mail 24 Hour news Cell phones Globalisation has created new business networks

Introduction of new communication technologies

Internet

E-Mail

24 Hour news

Cell phones

Globalisation has created new business networks

Increasing the level of connectivity in a system directly results in an increase in the level of complexity Consider an example of 4 people in a room, there are 6 possible links between them which means there are 64 possible ways they can interact Increase the number of people to 10. The number of possible links is 45 and the number of possible ways to interact is 3500 billion Therefore increasing the connectivity leads to increased complexity within a system

Consider an example of 4 people in a room, there are 6 possible links between them which means there are 64 possible ways they can interact

Increase the number of people to 10. The number of possible links is 45 and the number of possible ways to interact is 3500 billion

Therefore increasing the connectivity leads to increased complexity within a system

What is complexity? Complexity occurs when there are a number of factors affecting an issue / situation Complexity arise in networks Complexity arises from interaction within a system Relationships between the factors are propagated through the network Complex issues evolve over time Complex systems do not return to a previous state Complex issues are not ‘solved’ – change the nature

Complexity occurs when there are a number of factors affecting an issue / situation

Complexity arise in networks

Complexity arises from interaction within a system

Relationships between the factors are propagated through the network

Complex issues evolve over time

Complex systems do not return to a previous state

Complex issues are not ‘solved’ – change the nature

Example of complex issues in an organisation Understanding the business environment (business intelligence) New business development Customer service Improving sales Employee morale Company culture Mergers & Acquisitions

Understanding the business environment (business intelligence)

New business development

Customer service

Improving sales

Employee morale

Company culture

Mergers & Acquisitions

The challenge for organisations Companies need to evolve and adapt to an increasingly complex business environment Management techniques and tools need to evolve to address strategic challenges and complex issues Management need to be able to address complex issues in a systematic manner

Companies need to evolve and adapt to an increasingly complex business environment

Management techniques and tools need to evolve to address strategic challenges and complex issues

Management need to be able to address complex issues in a systematic manner

The first challenge is for organisations to evolve and adapt to a changing environment Currently most organisations find it difficult to adapt to changes Require costly restructures & change projects Will require significant change to management practices and organisational approaches

Currently most organisations find it difficult to adapt to changes

Require costly restructures & change projects

Will require significant change to management practices and organisational approaches

Management techniques and practices will need to change Create an ability to allocate resources to key requirements Incorporate a diversity of perspectives into decision making Creation of a portfolio of options to address strategic challenges Create self organising teams to address challenges & create new insight and knowledge An ability to engage in low risk experimentation on a continuous basis

Create an ability to allocate resources to key requirements

Incorporate a diversity of perspectives into decision making

Creation of a portfolio of options to address strategic challenges

Create self organising teams to address challenges & create new insight and knowledge

An ability to engage in low risk experimentation on a continuous basis

The second key challenge is for management to address complex issues in an ongoing basis Incorporate a diversity of perspectives Utilise the collective intelligence of the environment Understand the system at a point in time Utilise ‘bottom up’ sense making techniques Understand the ‘emergent properties’ Understand the key factors and relationships Develop a portfolio of options Monitor the evolution of the environment

Incorporate a diversity of perspectives

Utilise the collective intelligence of the environment

Understand the system at a point in time

Utilise ‘bottom up’ sense making techniques

Understand the ‘emergent properties’

Understand the key factors and relationships

Develop a portfolio of options

Monitor the evolution of the environment

Complex World [email_address] www.complexworld.co.za