Complexity | False Construct #4 Finding simplicity on the other side
[This is my last blog on Complexity].
If you’re thinking about resetting or retooling your business in 2021, it can be ever-so-tempting to shore up the likelihood of success by playing the same game we always have - trying to orchestrate the system and control as much as possible. In case you missed it, water started trading on the US futures market recently and it reminded me about how easily we lean towards control - controlling our market position or shareholder return by controlling our supply chain, our operations, our customer experiences, our people, or in this case, pricing of externalities…..
Tempting? Yes definitely. The right way for this new future? Hell no.
This whole gravitational bias we have to control and simplicity (which I explored in my blog on Uncertainty) actually gets in the way of unlocking our future potential in this new world and bakes in an early expiry date for our business model.
Why?
Because controlling a system, in all its complexity, doesn’t quite work. It never has, and it never will. And yet, this is what so many businesses across every industry try to do - adopting hierarchical approaches with centralised power structures and limited empowerment.
Sure hedging has its place, but the nub of it is, the more you try to predict every eventuality and prepare for it, the more waste you build into your system, and the more time you lose. Both these costs are far greater than the cost of certainty. This is critical when it comes to understanding your commercial risk.
A more potent, agile and lean approach kicks off with a mindset shift. Accept you don’t know what you don’t know, and that it’s ok. Accept that you won’t be able to get all the answers, and that it’s ok. And then arm yourself with two things:
Questions - to be curious and to stay curious as real life plays out.
A set of guiding principles to guide your actions - not your rhetoric.
This is a far more intuitive approach. This is what works in life. And despite how we often do things, it’s what works in business. (side note: in fact, intuition is actually what most of us are seeking when we grasp for simplicity).
Carrying on the analogy of parenting I’ve been using in this series, it’s like parenting pesky teenagers. On our good days, our influence comes from leaning in with enquiring questions, family values and guiding rules. Seemingly random stuff happens, and that’s ok. That’s life. We bring it back to values and it anchors us. It gives direction. It makes it easier to respond to the craziness.
Same same in business.
This is what we did at Ecostore. Our core values translated directly into guiding principles which shaped both what we did and what we did not do, across every facet of our business. It helped us deal with a trifecta of complexity on the supply side, demand side and the product formulation side, as we pushed into creating a new market norm. And the added bonus? It also lifted productivity through empowering our people. Decisions were faster, better. We were in flow, in sync.
There is a well documented 2011 case study example of NYC yellow cabs to show complex systems at play. Success was achieved not from trying to control every eventuality, but instead influencing the outcome by providing a few simple behavioural guidelines which upheld the personal agency of each cab driver. This ‘system of systems’ (SoS) approach is particularly relevant for those of you playing in the emerging tech space. It is also at the heart of the circular economic principle of decentralisation, and the systems thinking principle of emergence[1].
And if you get it right, it enables you to scale, big time.
Why is this particularly relevant now to business? Because when we are anchored in values, we can better deal with disruption; black swans[2] can swim by and our system can handle it. And let’s face it, those pesky black swans like Covid will keep making an appearance in the future as we face into an ongoing disruptive world.
So as you think about 2021 and how you want to move forward strategically in such a volatile, uncertain, complex world, think about how you show up as an organisation. Think about how you show up in the market, to your customers, staff, suppliers, community. Think about what guiding principles sit behind this. What principles do you have (or want to have) that support your future direction in practice. Hint: this is less about what you do. It’s more about how you be.
This is what I call the simplicity on the other side of complexity.
Covid-19 has been really tough for many of us but it has also brought a few gifts - greater consciousness and a reconnection with ourselves and the things that really matter. Our world view has changed a little for the better. It’s also given us an agitation to do things a little differently. Use that energy to fuel how you redesign your business in 2021 to move past restoring the status quo to be more restorative. Adopt a deeper real-world worldview. It’s complex, sure. But it’s more robust, more impactful, it’s more antifragile, and it’s where your future market is.
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If you’re thinking about building back better, or wanting to get ahead of the curve, ask yourself how well are our values acting as guiding principles to build deeper strategic value in our business model? How well do they guide future business value creation? How well do they support each of our stakeholders?
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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 the Tensegrity Method can help you face into 2021 stronger connect with me.
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[1]Much of emerging technology is pulling from nature. If you want more on this, check out Craig Reynold’s famous flocking birds computer simulation in 1986 that got widely applied into advanced thinking in automation and unmanned cars. This goes back further to the revolutionary work of the meteorologist Edward Lorenz, who coined the term the Butterfly Effect in the 1960's to represent how tiny scale changes to the starting point of his computer weather models resulted in anything from sunny skies to violent storms. His thinking was widely translated into business, financial markets, and computing. Nature truly is our best teacher.
[2] A black swan is a term coined by author Nassim Taleb to explain unexpected outlier events of large magnitude and consequence. It references back to an ancient saying that black swans did not exist until they were sighted by Europeans.