Friday, 12 June 2015

Complexity as an engine of innovation

This post was written in conjunction with Carl Lyon of the QoE.

A customer's journey is often made up of both intended and unintended outcomes, but customer experience is 'the real outcome'. Or to put it another way, what actually happened rather than what should have happened. But as complexity increases in large organisations, it is becoming increasingly difficult to identify and control all the variables that can impact on the customer journey.

This issue arose during our March QoE discussion which focused on The Art of Simplicity in large organisations. The engaging two-day event highlighted many factors that can exacerbate the problem of complexity, including technology, employees, vision, acquisitions, and leadership. But if complexity is here to stay, perhaps what is needed is a shift in our perspective to help us tackle the problem from a different angle. If we can view large organisations through a new lens, perhaps we may be able to derive value from complexity and use this to improve customer experience.

The hierarchical model of workplace organisation that emerged in the early 20th Century continues to shape the structure of large organisations. But the suitability of the hierarchical model for an era of hyperconnectivity that has been instigated by the internet and mobile technology is increasingly under scrutiny. It is becoming increasingly apparent that we are attempting to solve complex, 21st Century problems with solutions derived from last century's industrial model.

So how can we take a different perspective? Consider for a moment that a large organisation is not a hierarchy of people, but is instead a collection of networks. This is the perspective put forward by Christopher Vitale, who proposes that in order to cope with a hyperconnected age we need to view our reality as networks of networks. Informed by research on complex systems science, Vitale observes that complex, dissipative systems 'consume energy and turn it into waste, dissipating potential in order to produce ordered complexity' (Vitale, 2015, p.23).

If we adopt this perspective, we can interpret a large organisation as a complex system, dissipating much of the potential of its employees by forcing them to operate under a hierarchical model that is poorly suited to the complexity of the modern world. But if we shift our perspective to view an organisation as a network of networks, then every employee is a participant in a multitude of networks incorporating other people, information, and systems. An organisation consists of networks of employees, information, and systems, and the organisation itself is part of a network of other organisations and systems. In this network-centric paradigm, the actions of the organisation have an impact on the networks both within and outside the organisation.

How does this help? Well, according to complex systems science a complex system also contains a huge amount of 'energetic potential', and this energy has the potential to transform and enrich its immediate environment. If we view a large organisation as a complex system then the implication is that complexity is a positive force, and tapping into the latent creative potential of the network will provide opportunities for creativity and innovation . What is needed is a way to effectively harness the energetic potential of the network in order to drive innovation, and a way to understand those areas of the organisation benefit from complexity (e.g. R&D) and those that may be damaged by it (e.g. customer experience).

Vitale also highlights the principle of 'robustness' in complex systems science, which can be understood as a way to produce more and better forms of growth. Sustainable growth is both an aspiration and a priority for almost every large organisation, and it is therefore possible to argue that achieving and maintaining a state of 'robust complexification' should be a key strategic driver. If we shift our perspective to view an organisation as a complex network of networks, an important aspect of leadership in large organisations then becomes how to achieve and maintain a state of robust complexity. By taking complexity to be an asset consisting of the creative potential residing in all employees, there are significant opportunities to harness this potential in support of the aims of the organisation.

If customer experience is the 'real outcome' of an organisation's efforts, then it is essential for leaders and managers to understand where problems of complexity in their organisation are having negative impact on the customer journey. By viewing the organisation as a network of employees, each containing creative potential and each having a unique insight into specific areas of the organisation, there is scope to mine this wealth of knowledge and use it to improve the customer experience.

Source: The QoE March 2015, Carl Lyon. Written : Tony Reeves, University for the Creative Arts.

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