Management and Complexity By Michael Duignan, Anglia Ruskin University Cambridge, UK October, 2010

Aim of today’s seminar: Ensure everyone understands some of the key concepts of complexity brings to the management Understand how it relates to business organisations

Today’s Seminar 1st Half of the seminar: Quick Overview of yesterday’s lecture Run through some of the key concepts of complexity Introduce the ‘edge of chaos’ to innovation 2nd half of the seminar: Debate Time: For and Against Complexity Reflection: What can everyone take from the lecture and seminar

Quick overview – Yesterday’s Lecture Discussed pre-19th Century Management The effects of the ‘Industrial Revolution’ on business Post-19th Century Management The change of management paradigms - Scientific  Behavioral

Quick overview – Yesterday’s Lecture The need for innovation in the 21st Century The role of ‘complexity’ to management Chaos Theory and the power of ‘Emergence’ ‘Skunk works’ and ‘Intrapreneurs’ in the hybrid organisation

Key Complexity Concepts Chaos Theory – small things have BIG effects Emergence – Collaboration of people creates magic ‘Skunk works’ and ‘Intrapreneurs’ – the benefits they bring The ‘Hybrid Organisation’ – Relationship of Structure and Innovation

Organisations as ‘Complex Adaptive Systems’ - Complexity believes that all organisations are living systems - All organisations ‘learn’ and adapt to their environment ** Survival of the fittest ** ** Natural Selection ** If they don’t adapt…they risk extinction and business failure -

Life is caught on the tension of ‘order’ and ‘chaos’ The ‘Edge of Chaos’ Life is caught on the tension of ‘order’ and ‘chaos’ Too much ‘order’ – companies become: Institutionlised with rules and regulations Unable to quickly respond to the changing environment Unable to innovate and be creative (M+S Sign) – Explain how a stagnant culture developed in M+S

Life is caught on the tension of ‘order’ and ‘chaos’ The ‘Edge of Chaos’ Life is caught on the tension of ‘order’ and ‘chaos’ Too much ‘chaos’ – companies become: The organisation runs around like a headless chicken No idea’s last long enough to be effective Lack stable relationships and social patterns of interaction Find an example of a company ‘chaotic’

The ‘edge of chaos’ The Sweet Spot for Innovation Between ‘order’ and ‘chaos’ lies the – ‘edge of chaos’ The point where there is enough chaos for ‘novelty’ BUT also enough order for consistency and patterns to emerge When confronted with unpredictable and volatile external pressures find themselves on the ‘edge of chaos’

The ‘edge of chaos’ The Sweet Spot for Innovation ***CREDIT CRUNCH*** “An economic event that shook business worldwide” – CEO Vodafone, Vitorrio Colaso A skin or swim business scenario - Many firms were on the ‘edge of chaos’ – innovating their way through the Crunch Companies prospered, many didn’t – ‘Survival of the fittest’ Many do not realise that ‘the edge of chaos’ is where the greatest potential for success and innovation lies

Creating the ‘right’ structure / organisational culture Through much research (Stacey et al) success on the edge of chaos is down to the culture / structure of an organisation: Introducing simple rules promote ‘Spontaneous emergence’ ‘Softer’, emotionally intelligent management/leadership style (For example: McGregor's Theory Y Manager) Allow for the a ‘hybrid organisation’ – ‘Skunk works’ working harmoniously with structured support

Thought provoking questions: Are we approaching the ‘new era’ of management? Do you still feel confident of using Drucker management etc for today’s business? How far can we say managers need to more adept in a changing global environment? Is there a set way managers can manage in the 21st Century? Is our environment more stable than complexity suggests?

Are these faces the proof of management change?

Debate time: for and against complexity

Reflection and Review