Learning to Live with Complexity

Business has always been unpredictable and surprising, and the systems
in business have always been complex. But due to the IT revolution,
complexity affects everything—products, supply chains, organizations.
This makes managers’ jobs far more difficult. It is harder to make sense
of what is going on, make predictions about the future, and place bets.
Complex systems go beyond the merely complicated because you can’t
predict what is going to happen just from knowing the initial
conditions. Our analytical tools have not kept up. The secret is making
fundamental changes in how managers approach tasks such as:

* Forecasting. Drop certain analytical tools. Embedded in many are
assumptions that don’t hold true for complex systems. Focusing on a few
types of predictive information can do the job. * Mitigating risks.
Reduce the need for accurate predictions. In an unpredictable
environment, the best investments may be those that minimize the
importance of predictions. * Making tradeoffs. Take a real-options
approach. Small investments can give you the right, but not the
obligation, to invest more later on. * Ensuring diversity of thought.
Diverse thinkers better equip companies to deal with the unforeseen
changes that are inevitable in complex systems.

Project Disengagement: When it’s time to constructively exit

Most companies have poor processes for constructively shutting down
projects and capturing whatever value and learning might have been
generated within them. This seminar covers the topics of first,
recognizing when you may be escalating commitment to a project that is
failing, next, developing a disengagement plan if you have concluded
that stopping it is the best thing to do, and finally coming up with a
way of capturing as much value as possible from the experience of having
done the project. Depending on the interest of the group, the example of
Hewlett Packard’s “Kittyhawk” venture may be used as an exercise.