Here is an excerpt from an article written by Joerg Esser for Harvard Business Review and the HBR Blog Network. To read the complete article, check out the wealth of free resources, obtain subscription information, and receive HBR email alerts, please click here.
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In the last year, many companies have been pushed to the limits of their capabilities, and in many cases, to the edge of insolvency. With severe pressure on operations, supply chains, and demand, their processes have collapsed, and any idea of teamwork within their ranks has been thrown to the wind.
Or have they? My conversations with business leaders suggest that, in fact, the opposite is true. Contrary to all expectations, many CEOs say that their organizations actually appear to work best in crisis mode. With the company in a sink-or-swim situation, the employees pull together and develop the ability to surf.
Of course, working in crisis mode is neither sustainable nor desirable. Many business leaders are now asking themselves how they can keep up the momentum post-crisis and ensure that their organizations are adaptable in the future. How can they move from crisis mode toward forward thinking?
The key lies in achieving a permanent state of adaptability. Every business leader knows that their company needs to adapt in order to survive long term. However, the real issue is not successfully transforming your organization on a one-time basis — it’s writing the ability to adapt and transform into the company’s DNA. It’s developing a mechanism or reflex for dealing with whatever crisis comes along, be it financial, technological, environmental, or health related.
Keeping Your Workforce Up and Running
The pandemic has shone a sharp spotlight on the need for companies to be adaptable, but business leaders have long been aware of this necessity. Even before the mayhem of 2020, they had to deal with multiple crises. Indeed, most business leaders feel like they’ve been in a state of constant “transformation” for the past two decades, and many are heartily sick of the word.
The problem is, despite the energy that business leaders put into their work, most attempts to make companies adaptable come to nothing. This is borne out by my own experience working both in management and as a strategy consultant. Ask top managers what went wrong, and you’ll hear the same litany of complaints over and over again: Some individuals within the organization failed to take ownership of the change process. People started blaming each other. Things went wrong and nobody did anything about it. Gradually, the transformation lost momentum.
What was wrong with the old approach? Business leaders were trying to do too much. They were expending a lot of energy but channeling it in the wrong direction. Time and again, I’ve found working with organizations that complex problems do not require complex solutions. When it comes to being adaptable, the answers are actually surprisingly simple.
Less Is Actually More
Over the past few years, I’ve been encouraging business leaders to take a “less is more” approach. This technique differs radically from the old way of doing things. Traditional organizations were designed for stable market environments and often come with a heavy legacy of complex administrative processes. That makes them notoriously inflexible and difficult to transform. In such companies, when the going gets tough, the management gets tougher. The default approach is to impose more rules and tighter controls from above as a way of keeping disruption in check.
The problem is, tightening controls often stifles the organization. In fact, what management should do is loosen their hold and give the organization the freedom it needs to work effectively. The idea is that management should stick to defining what they want to achieve and let the organization focus on how to achieve it. This process of loosening your grip — while not letting the company descend into chaos — can be tricky. It needs to be based on a clear set of principles, backed up by science.
My approach is inspired by complexity theory, which builds on the work of U.S. theoretical physicist and Nobel laureate Philip Warren Anderson. One of the key concepts in complexity theory is “emergence”: The idea that complexity arises from simplicity and that small things form big things with properties different than the sum of their parts when interacting as part of a greater whole. Just a few simple principles allow you to build systems where macrointelligence and adaptability derive from local interactions and knowledge. In other words, the challenges may be great, but the solutions are often small.
Many examples of this occur in nature. For instance, ants build living bridges when searching for food, construct megacity-like colonies, and protect themselves against threats collectively. If the colony is flooded, for example, some of the ants use their heads to plug holes, while others absorb water with their bodies to drain the floodwater.
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Joerg Esser, PhD, has a unique background in science, business management, and strategy consulting. After completing a doctorate in theoretical physics with a focus on complex adaptive systems, he carried out advanced research at the Santa Fe Institute of Complexity and Los Alamos National Laboratory. Since then, he has worked for a wide range of organizations, both in executive roles and as an external consultant, translating his work on emergence and self-organization into practical principles for business leaders. He gave a TedX talk on smart networks in 2019.