Management thinkers disagree on how to manage complexity

28. November 2013

Date: 27-11-2013
Source: The Economist: Schumpeter

THERE can be few better places to talk about complexity than Vienna. This was the capital of the most complicated political organisation yet seen: the Austro-Hungarian Empire. It was also the centre 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. They had little interest in the complexities of the Habsburgs or the cold war. They were preoccupied instead by two points: that business is more complicated than ever before; and that managing complexity is at the top of businesspeople’s agenda.

Whether they were right about the first point is debatable. In the 18th century it took six months for letters to travel from East India House in London to Calcutta and back. Today, supply chains can be managed in real time, and masses of data can be crunched instantly at the touch of a button. But they were right about the second. Businesspeople are confronted by more of everything than ever before: this year’s Global Electronics Forum in Shanghai featured 22,000 new products. They have to make decisions at a faster pace: roughly 60% of Apple’s revenues are generated by products that are less than four years old. Therefore, they have a more uncertain future: Harvard Business School’s William Sahlman warns young entrepreneurs about “the big eraser in the sky” that can come down at any moment and “wipe out all their cleverness and effort”. Read the rest of this entry »