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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