Harvard Business Review: “Embracing Complexity”

By: Frank Buytendijk, chief marketing officer

Be Informed helps organizations embrace complexity, this has been our mission since the beginning. We’ve even using the same term, “embrace complexity”. In essence, fighting complexity is useless, it is a natural phenomenon. Harvard Business Review (HBR), the world’s most influential management magazine, acknowledges that and chose “managing complex organizations” as its theme in its September 2011 issue.

Here we highlight some of the statements in the HBR articles, and add our experience.

HBR: “Managing a business today is fundamentally different than it was just 30 years ago. The most profound difference is the level of complexity people have to cope with”

This trend is particularly visible in business operations. Compliance regulations, a wide variation of customer requirements and shorter product and strategy life-cycles make that administrative professionals and other knowledge workers can’t rely on conventional wisdom anymore. Mass customized products and processes have become the norm. Analyst firms such as Forrester and Gartner estimate the market for more unstructured and knowledge-intensive business processes to be 2-4 bigger than traditional structured business processes.

HBR: “It’s harder to place bets, because the past behavior of a complex system may not predict its future behavior”

We believe business processes and IT should work  more “above the line”. This means that business logic is not embedded in custom code and business applications, but is stored in a so-called meta model. Once the rules of the games change, or you’d like to change the rules, this can be done without affecting the IT systems, it requires only changes in the model. This way you can still invest in a long-term IT architecture, but keep your options open, as the business keeps changing all the time.

HBR: “It’s easy to confuse the merely complicated with the genuinely complex.”

Here we have a different point of view. HBR defines complicated as a situation with many moving parts, but predictable patterns, like flying an airplane. Complexity, however, describes systems in which the interactions continuously changing. The same starting conditions may result in different outcomes. We’d rather see a more practical definition. We see complexity as a natural phenomenon, that organizations need to deal with. There are many moving parts, they can change all the time, or all of a sudden new moving parts emerge. Complicatedness, however, represents how you deal with that complexity in your organization. For instance, governance, business operations and systems may be complicated. Complicatedness can be reduced, in order to embrace complexity. For more information, go to www.beinformed.com/whitepapers and www.beinformed.com/takethetest.

HBR: “In a complex environment, even small decisions can have unintended consequences. […] It is very difficult, if not impossible, for an individual decision maker to see an entire complex system. […] Limit or even eliminate the need for accurate predictions.”

We couldn’t agree more. We believe strategy formulation (or policy-making) and execution should be a continuous closed loop. Before making any strategic decision, the consequences should be clear. Simulation is a powerful tool for doing that. And these decisions should not be made in isolation, but a collaborative processes, involving multiple people and disciplines. We also don’t believe in “sticking to the plan”, we opt for “sticking to reality”. If you have business operations that can quickly follow any changes in the environment, there is less need to accurate predictions.

HBR: “Take a real-options approach”

Our research has shown that real-options thinking is not very well-known in the business world. But it should be, and we all know examples. For instance, a service oriented architecture is a real-options strategy: you invest in keeping your future options of use open. Be Informed is based on real-options: business processes are derived on the spot, and are based on the unique characteristics of every case. And once you change the rules, the system changes with it immediately.

HBR also publishes an interview with Legg Mason’s chief investment strategist, Michael Maubossin. He argues that in complex adaptive environments, we don’t really know how things are going to unfold, so it’s difficult to make forecasts or budgets going many years into the future. He refers to another HBR article, called “Strategy as Simple Rules” (2001), that recommends creating a set of decision rules that are clear to everyone, and that describe what the organization stands for. “Then you pretty much let people decide on the fly in the field what they think makes sense given what they see, without violating the rules.”

We couldn’t have said it better ourselves. The Be Informed business process platform is designed to do just that. And our customers tell us it works. They typically save more than 30% in their cost of operations, more than 60% on their system’s TCO and up to 90% in their cost of change. How? By letting go the idea of fully predefined and prebuilt processes, but allowing administrative professionals to organize their work based on how they see fit, based on the customer conversation they have, or the specifics of the case at hand. Without breaking any rules. Would you like to know more? Contact us.

Read more:

• Learning to Live with Complexity
• Smart Rules: Six Ways to Get People to Solve Problems Without You
• Embracing Complexity

You will only see if you get it

By: Dick van Mersbergen

All meeting rooms at the Be Informed headquarters are named after famous philosophers. Large posters explain how they relate to our product and company. The second philosopher I came across is Ludwig Wittgenstein. His quote:“Logic takes case of itself; all we have to do is to look and see how it does it.”

The poster reads: “At Be Informed, our approach is more logical. We look at the goal of the process and then simply and logically work our way back to what is needed to successfully complete transactions towards that goal.”

Like every sports-minded Dutchman, the combination of the wordslogic andgoal made me think of the most famous Dutch footballer: Johan Cruijff. He is not just dazzled defenders with his football skills; his pseudo philosophical comments and weird twists of old saying had the same effect on people. Completely unaware of this, Cruijff ends every cryptic sentence with: “…it’s logical.”

In 1983, Cruijff joined long-term rival Feyenoord. During the first training session they played a 4-2 rondo on a small square pitch (see figure 1). Black has possession of the ball and the two in the middle (orange) have to conquer it. An easy game, played in during training sessions everywhere.

The Master immediately said: “Stop! You do it all wrong.” The other players replied: “But we play this game for years and it works fine. What’s the problem?” Cruijff explained that when the 4 players are in the corners, they limit their space. There are just two good passes possible (the orange arrows), as the pass through the middle is likely to be intercepted. There is hardly room for improvement, for example when X1 and X3 move will not change a thing.

So the others asked: “Well, this might be, but how to play it right?” Cruijff said: you need to stand halfway along the sides (see figure 2). Then, when moving, X1, X2 and X3 will create space and give the player with the ball more options. Even the pass through the middle will be OK because the defenders will be forced to leave this space more open.

At first, the others of the Feyenoord squad were sceptical. But they tried it and it worked really well. They understood and adapted the new playing style. So by simply turning the players’ square 45 degrees and introducing a new vision, a whole new game was created. Cruijff did not change the rules, he gave the players a new perspective. To use an other famous Cruyff quote “You will only see if you get it” (Je gaat het pas zien als je het doorhebt). This is actually the title of a management book on Cruijff and leadership.

And there is a link with our company as well. At Be Informed, we looked at the way business processes were automated and we said: “Wait, is this really the best way to do things?”. Instead of playing the same game over and over again, we introduced a new goal-oriented approach and created a completely new -and winning- game in the world of Business Process Management.

By the way, in the 1983-1984 season Feyenoord went on to win the Dutch leaguefor the first time in 10 years. It’s logical.