Enterprise 2.0 and Complexity Risks

Channeling complexity load towards specific groups, and then empowering those groups with Enterprise 2.0 tools and collaboration patterns, presents an attractive strategy option for increasing "complexity load capacity" of an organization, while containing complexity risks.

Resistance against adoption of Enterprise 2.0 patterns of collaboration, is often fueled by the fear of loss of control. Reducing top-down control, allowing more horizontal patterns of coordination to emerge, can be seen as a risky course of action.

We may rephrase this perception of risk, in terms of increasing complexity.

Enterprise 2.0 is about emergent collaboration. Emergence and complexity are closely interrelated. Emergent processes are inherently more complex, than centrally coordinated bureaucratic structures.

More complex, means less predictable. Introducing more complex, emergent coordination mechanisms, increases variability in processes and outcomes. Increased variability directly translates into increased risk exposure: risk, by definition, measures variability.

In addition to this direct channel from increased complexity, to increased risk, risk may also be increased indirectly. Changing coordination mechanisms, if not accompanied by correspondent changes in management information systems, may provide inferior management information, as compared to the more rigid control regime being replaced. The quality of management information may deteriorate precisely at the moment when substantive risk in primary processes is increasing.

Increasing complexity therefore presents a double risk whammy: increasing variability, decreasing visibility. No wonder, that executives pondering the risks and rewards of adopting the emergent collaboration patterns of Enterprise 2.0, may choose to ponder some more.

The Fallacy of Control

This line of reasoning is too simple, though: it is tainted by a fallacy of control, and it confuses cause and effect.

The fallacy of control resides in the assumption, that complexity can be avoided and simplicity can be maintained. For many organizations, this is simply not true. Faced with an onslaught of fast-paced, disruptive changes in the external environment, many organizations have no choice but to develop complex responses, to complex external demands.

Given a trend towards increasing complexity both in the external environment and internally, Enterprise 2.0 patterns of collaboration may provide enhanced capabilities to respond and adapt to semi-chaotic conditions. In this perspective, Enterprise 2.0 is a response to increasingly complex conditions, rather than the primary cause of increasing complexity.

Complexity risks are already present and unavoidable. Ignoring this reality and clinging to obsolete modes of control, exacerbates those risks.

Managing Complexity

An interesting model for managing complexity is put forward in a recent McKinsey Quarterly article.

The model distinguishes between:

  • externally created complexity, which cannot be influenced, like legal and regulatory requirements;
  • business model complexity, which results from strategic choices, where complexity supports superior value creation;
  • personal complexity, which is the complexity load experienced by individual workers in the context of performing work processes.

External pressures and business model choices provide a base load of complexity that cannot be avoided.

Managing complexity, therefore should focus on the way complexity load is distributed within the organization, across departments and roles, in the form of personal complexity. Some people can handle complexity better than others. It may be advisable to concentrate complexity in specific departments, allowing a simplification and reduction of complexity load in other parts of the organization.

If we apply this model to Enterprise 2.0 adoption, it follows that Enterprise 2.0 efforts may be more effective if they are combined with explicit choices, as to which parts of the organization will be charged with handling complexity.

Channeling complexity load towards specific groups, and then empowering those groups with Enterprise 2.0 tools and collaboration patterns, presents an attractive strategy option for increasing "complexity load capacity" of an organization, while containing complexity risks.

Even if organizations are unable to avoid complexity in general, it may be possible to keep parts of the organization relatively simple. The price for this is, that all organizational complexity will be concentrated on part of the work force. Empowering those workers to optimally handle their responsibilities, Enterprise 2.0 may provide a significant contribution to overall productity and risk control.

blog comments powered by Disqus