Instability not stability!
Management has always traditionally focussed on how to control events. The science of Chaos and Complexity concentrates on instability, not stability!
This science explores how organisations are formed by the inter-reactions of individual agents and NOT their individual properties.
By focussing on the emergent properties, ie the whole system and the properties that emerge from these inter-reactions of individual components, you start to see that the outcomes are completely unpredictable. You can know a lot about the individual properties, but you can’t predict the outcome. It is the relationships and not the individual components that are most important.
The theory looks at how complex dynamical systems develop over time and self-organise into highly complex patterns.
Is this methodology more suitable for the turbulent business environment within which we all operate?
Impact on business management and predictability
If we now move on to the impact this science has on business and management it helps to give us an understanding of our inability to predict outcomes, in company performance, stock markets and economies. The patterns or inter-reactions in all these areas have led to emergent outcomes with unintended consequences that are having a significant effect on the way we currently run our businesses!
Business prescription for success
Taking this forward now into turnaround planning and strategy, this concept confirms my belief that there is no prescription for turning around the fortunes of a particular company. It is always contingent on the individual situation, the unique ways in which it implements its business model and the way it inter-reacts with it’s constantly changing environment.
We are constantly introducing models or ‘recipes’ that are a sure fire way to making your business the No 1 in its field. From Time and Motion studies in the 1960’s to Economic Value Added to Lean etc., they have been hailed as a panacea for success. It is said that the overall success rate of these programmes is just some 20%.
This does not make them bad programmes, it simply underlines the fact that you can’t always predict the outcome. These models HAVE to be used in the right context, and this is not always the case.
Living near the edge…
It is said that equilibrium is a precursor to death. Previously very successful businesses with long termed employees and a rigid business model eventually face problems and sometimes failure. Woolworths and Game being two recent examples and, some years ago, the delay by IBM in getting into the PC business cost them dearly for many years.
Living things try to operate near the edge of chaos, and this enables them to adapt when needed. Organisations need to be constantly self questioning to avoid the problems that arise when you get stuck in the same old ways of working.
Complexity, Creativity and Turnaround Strategy
I would argue that the spontaneous creativity that emanates from the putting together of talented and culturally diverse people and methods, is one of the key building blocks to creating truly great businesses. These organisations are often more valuable than their peers in that their model has developed in a way that sets them apart from others. They have innovative and different ways of doing things and can’t be easily copied. Because of their self questioning and often ‘radical’ ideas, this inherent methodology makes them more sustainable businesses as it never allows them to get stuck.
Planning and implementing a Turnaround strategy is a great opportunity to embrace these ideas, and to make sure you don’t get stuck – Who knows you might even create something great?
Turnaround strategy support
If you would like to discuss any of the above and how it might help your business or one that you are advising, please contact me at john.thompson@transcapital.co.uk or on 0845 689 8750.
Image by: cobalt123