Simplicity is a construct | Business Complexity series
Way back when lock down first rolled in the first time, there was a quote of Charles Darwin which did the rounds: “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.” And businesses everywhere did incredible jobs at pivoting. Business leaders danced through pivoting, piroutteing with finesse.
But as we start this last calendar quarter with an election looming, many business leaders I’m talking to right now are asking themselves what 2021 will look like, and what do they need to do to ‘build back better’. They’re wanting help to make a more structural (vs tactical) change to their business model; to shift to something that is more than just restoring the status quo. This is more about going off-piste than pivoting. And it can feel all a bit complex.
So I thought it might be useful to unpack Darwin’s adaptation theory in relation to complexity, using a Design Thinking and Systems Thinking lens - as there’s a far chunk of opportunity here for the taking when you do. (Heads up: It does require a bit of a risk reframe first though).
This is part 1 of 6. You can skip to the end of each tip if you want the questions to ask yourself. At the end of the blog is also a useful exercise for reframing your risk register.
Shying away from complexity has been a bit of an evolutionary thing
To give some context, dealing with complexity has always been critically important to the survival of us as human beings. Way back when, biological adaptation provided us with evolutionary cognitive knowledge to cope with complexity. We had inherent instincts, innate reflexes and automated behaviours that responded to the natural environment. Our ability to adapt was dependent on our biological fitness.
Then language came in and changed all that. As Yuval Noah Harari highlights in his book Sapiens, the development of language was a momentous event that enables us to think sharply about abstract matters, co-operate together (and gossip).
All very progressive stuff, but the dark shadow of this evolutionary progress was that we began to filter our knowledge, and the transmission of information through a cultural lens versus a biological one. Powerful stuff in advancing complex cultural, technological, and economic systems, but the downside was it started to disconnect us from the natural world and our natural biological adaptive state[1].
Playing that out over time to the modern world, and the beginning of the industrial revolution, with our global economic system linearly constructed of producers and consumers, we began to find ourselves rather disconnected from the complex biological systems that sit in and around this system.
Running right alongside this, wrapped up snug and smug in our candy-floss cocoon of consumption, we began to view complexity as something scary. Something risky. Something that could tumble into chaos. So we prayed at the shrine of simplicity and extolled its virtues instead.
And we didn’t see the fragility creeping in.
So what do you need to do? There are six things I’ve run into in my experience transforming businesses that are worthwhile reflecting if you’re rethinking your business model and strategy. Here’s the first
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1. Beware of the construct and inherent risk of Simplicity
Without our knowledge, the notion of simplicity has been something we’ve been indoctrinated in since when we were children. From the “happy ever after” and “white knight, white horse” fairytales we’re told as toddlers, to the reductive cognition of a + b = c, Euclidean shapes and Newtonian physics we’re taught at school, we have prized abstract thought, theoretical concepts and engineering equations over the mucky, dirty complexity of the real world that couldn’t be packaged up nicely in an exam or a pithy sound bite.
This shadow dutifully followed us as we left school and went on to work. And now as business leaders we find ourselves extolling KISS principles, honing in on our unfair advantage, hunting down the killer app, finding our USP, and secretly yearning for a silver bullet to help solve the impacts of Covid-19 on our business model. In fact the Cynefin model created by Dave Snowden in 1999 and touted as a great simple model (pun intended) for leadership decision making classified the Simple as “best practice”, until it was reframed in 2014.
Simplicity is nothing more than a construct. A construct designed to make us feel like we understand things a little better. It is not the real world. And if we play to it, our business model falls short. Of all the ‘wake up and smell the coffee’ moments, the sooner we wake up to see the complexity the real world, the stronger our business models will become.
To give a simple analogy, it’s like being a parent. There is absolutely nothing simple about parenting. It’s a continual woven dance across a multitude of complex, interconnected physiological, psychological component parts. If we think simplistically; if we play simplistically, we fall short.
Because here’s the irony; the more simple we make things, the more fragile they become.
Covid-19 has shown us that we have created businesses and business ecosystems that are constructs. Far removed from the real material world they engage with. Fragile systems. Out of whack. And utterly wasteful. The spectacular demise of the US food system earlier this year as lock down kicked in was a beautiful example of system fragility. It highlighted the house of cards on which an entire nation gets fed. We saw YouTube videos of bare supermarket shelves and people without food whilst farmers were dumping produce and pouring milk down the drains[2]. As Warren Buffett put it “Only when the tide goes out, do you discover who’s been swimming naked”.
But this is not just about food; this sit across pretty much every industry. And this is not just a US issue; it is a global one. It is much easier to see at a distance, or to see with hindsight, the emperor and his new clothes for what they are; merely constructs that in no way protect us from exposure.
So, with the tide out for a while now, how do we get dressed again, when so many of our market and business ecosystems are naked?
Given your business has taken a few shocks this year, ask yourself Where is the fragility in your business model? Where is the real-world waste sitting in your business lifecycle? How well do you understand your actual business ecosystem? This is the power of Design Thinking 3.0.
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Thank you for taking the time to read. If you want more on business model transformation, feel free to use my free tools page for useful models, tips and examples. If you want to chat about your business model, or how Design Thinking 3.0 can help you face into 2021 stronger connect with me.
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It can be useful to reframe your thinking of risk by reappraising your risk register (or similar) and do this 4 step exercise:
1. Identify each risk on a scale of most complex to most simple.
2. For each risk, identify the cost: Rank each on a sliding scale according to the amount of organisational Time, Energy and Money you put towards trying to control each
3. For each risk, identify the impact: Rank each one on a sliding scale according to how it impacts on the strength and sustainability of your business model.
4. Now stand back and appraise. Ask yourself: Where is my organisation’s energy going? More towards those things that are simpler or easier to achieve? More towards those things are are more complex and appear more difficult to achieve? HINT: You want to be putting more energy into shoring up your business model no matter how complex it might seem versus focusing on stuff because it’s simpler. Quick wins tend to do nothing more than enforce the status quo.
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[1] It also, and just as profoundly, created a disjoint in timescales. As eloquently articulated by philosopher Wolfgang Wopperer, biological, social, and technological adaptation operate on different timescales – technology changes faster than social norms, and both change faster than biological design. Thus, humans created an environment to which they are in many ways biologically and socially maladapted. https://wolfgangwopperer.com/complexity-metaphor-radical-change
[2] Michael Pollen wrote a wonderful article earlier this year that is well worth a read.