Thriving in a time of Complexity

The case for building resiliency

In today's rapidly evolving business landscape, complexity seems to be a persistent constant. As business owners and CEOs, the challenge is not just to navigate this complexity but to thrive within it. We humans have been running businesses for a long time (several thousand years), so you'd think we would have a good handle on how to do that. And while many business are indeed doing very well, there are also many that could be doing better.  

So, is the business world genuinely becoming more complex? Are we humans merely perceiving it as such? Or are we actually doing less well in this more complex world? The answer, as it turns out, is a bit of all of those.

The accelerating pace of globalization, technological advancements, regulatory changes, and shifting consumer expectations is indeed contributing to a more intricate business environment; while businesses have always faced challenges and complexities, it is the rate of acceleration here that is crucial.   And let's not forget that it's us humans that are driving these advances.

The same forces that are affecting companies are also affecting individual people (at all levels) that form a crucial part of those businesses. And there is a well recognised correlation between the health and wellness of a company and the health and wellness (often mental) of its employees - this can be a virtuous or a downward spiral. The human being is pretty much the same model that was around a few tens of thousands of years ago, and while we do indeed learn fast and adapt, our basic design specification and programming is optimised for quite a different operating environment. Our biological and psychological evolution is slow and even though we develop new tools and skills, our fundamental cognitive biases and emotional responses remain consistent.

Some companies have figured out how to mitigate this 'adaptation lag' and create an environment where staff can indeed thrive in this complex world - and so ultimately can the business. However, there are many companies that are still sticking with management practices that that were developed during the industrial revolution. The distinction between thriving businesses and those struggling to keep up often lies in their approach to things like organisation design, culture, leadership, and management.   Here are just some of the principles that the thriving companies employ:

• Agile Organisational Structures.   Decentralized decision-making empowers employees across all levels to respond swiftly to changes. Cross-functional teams break down silos, fostering innovation and a more holistic approach to problem-solving. Lean approaches ensure that businesses can pivot quickly without being bogged down by bureaucracy.
• Adaptive Cultures.   Continuous learning (not the same as endless training) ensures that staff and the company remain at the forefront of industry trends and technological advancements. Psychological safety in the workplace encourages risk-taking and innovation, while a commitment to diversity and inclusion brings a wealth and breadth of perspectives and ideas, enriching the problem-solving process.
• Shared Pragmatic Vision.   A combination of a well shared clear and compelling vision, a demonstrated understanding of the real-world challenges, and a genuine empathy and concern for the team, inspires and creates a sense of mission even in the face of uncertainty.
• Strategic Management Practices.   Strategy is the process of achieving goals within available resources and constraints.  And so flexibility and innovation are key  to effective strategy as the world changes quickly.  Good (market and product) intelligence is also critical to be able to make strategic decisions; this can include data-driven decision-making
• Enabling Technology.   Technology underpins most every aspect of a successful business.  While  technology is not the answer to all issues, where it is used (and depended upon), the team need to be appropriately technologically literate to allow them to leverage its full potential.  This is no different than any other tool used in a process.

Some of the companies that are embracing, and leading the way in these areas include Patagonia, Zappos, South West Airlines, Buffer, Slack, John Deere, Warby-Parker, and BaseCamp. While non of these can be considered to be small companies, they all were at one point - and they would probably consider that their commitment to resiliency has been a crucial ingredient of their ongoing success.

The business world is only going to become more complex as a result of us making great strides in developing products and services; we have to ensure we match that with our management approaches.  The challenges we face are not insurmountable, and our ongoing progress will be defined by our willingness to adapt, innovate, and lead with vision and empathy. 

We already know we are able to do this, and for business owners and CEOs, this era of complexity is an opportunity for growth and innovation.  If we seize this opportunity, we will respond better (work with as opposed to against) the modern business landscape and emerge stronger, more resilient, and more successful than ever.

Graham