Managing complexity

“If you don't know where you are going, any road will get you there,” wrote Lewis Carroll. Clarity, coherence and vision or the lack of them would explain why we've been left behind? As of the latest quoted AEC reported period, Vietnam attracted more than three times in FDIs, for example. And as the JFC has repeatedly told us, we ought to have consistency in our laws, proclamations, rules and regulations, etc. But how can we when even “the rule of law” is foreign to us – given Pinoy crab mentality or “paki” culture? Was Independence Day June 12 or July 4? Or is the national hero Rizal or Bonifacio? Is the organized confusion coming from our “bida” culture? Or how do we square NAIA 3 or the energy crisis or the neglect of basic infrastructure or insidious corruption or political patronage or oligopoly or poverty? Are we coming or going?

I couldn’t help but break into a grin reading The Economist; Management thinkers disagree on how to manage complexity, 23rd Nov 2013: “THERE can be few better places to talk about complexity than Vienna. This was the capital of the most complicated political organization yet seen: the Austro-Hungarian Empire. It was also the center of some of the most convoluted cold-war spy games. On November 14th and 15th hundreds of management enthusiasts converged on the Austrian capital to debate the subject.”

I’ve spent most of the last eleven years in Europe and have lived through the culture; but even earlier – while still in my old MNC company – I thought that Europeans were less object-focused compared to Americans. They would tend to be more scholarly. And it came again recently in Tallinn (Estonia) where I narrated how a once small enterprise in ex-socialist Bulgaria became one of Europe’s best to the cross-cultural management community of Europe. And a British consultant emailed afterward: “Your presentation was really appreciated. There should be more examples like your work at the conference.” Others either requested copy of the presentation or expressed that the Anglo-Saxon culture was more down-to-earth than theirs or agreed that the “object of our efforts must be the betterment of man.”

The Economist, in its periodic technology reports, has in fact looked into why US companies generated more commercially successful inventions even when Europe came out with more ideas time and time again. [And who would think that Siemens even had to figure out why they weren't as profitable as GE, for example; while Nokia had to be sold to Microsoft?] And as I would explain it to my Eastern European friends, the key is to keep Edison in mind: “I want to see a phonograph in every American home.” Keep it simple, start with the end in view. A few years ago, to kick-off the budget-review process, I talked about KISS – keep it simple, stupid. And this year they completed the budget process before the US Thanksgiving, which I said was the unwritten rule in the US. They’ve been constantly pushing to simplify the process even as our portfolio of products and countries has continued to expand.

“It is striking how many of the world’s most successful businesses thrive on simplicity of some sort. German Mittelstand companies are doing well by focusing on narrow niches. Built-to-last companies, such as Coca-Cola, are masters of distilling their corporate identity into a simple formula which employees can internalize and customers can easily recognize. McDonald’s is a global success because its business model is so simple and replicable. Tim Brown, the boss of IDEO, argues that design companies like his are enjoying success by showing organizations how to “design complexity out”. The biggest threat to business almost always comes from too much complexity rather than too much simplicity. The conglomerates of the 1960s crumbled because they tried to manage too many businesses in too many different industries. Enron imploded because the company abandoned old-fashioned command-and-control in favor of fashionable ideas about running energy companies as if they were financial organizations. The banks were so bedazzled by complex mathematical formulae (and corrupted by greed) that they lost sight of the simplest principles of banking. That old US Navy saying, “Keep it simple, stupid”, is not a bad rule for management too, simple-minded though it may sound.” [ibid.]

What can we in PHL learn from all this? To be comprehensive, holistic, inclusive are all fine except that they’ve perpetuated our “crab mentality?” And with no sight of nirvana incoherence rules; paving the way for a cacique and a dole-out culture – and learned helplessness? As I shared with my Eastern European friends when I introduced the virtue of simplicity, there is a biblical and a scientific foundation to the mantra of simplicity – and they are The Great Commandments and Pareto’s principle. But to Juan de la Cruz that is too simplistic and unlearned? So was it to the scribes and Pharisees?