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The underlying premise of any organization is to create value. Historically, firms have done so through engineering ever greater efficiency. By honing internal processes, optimizing the supply chain and reducing product inventories, managers could improve margins and create a sustainable competitive advantage. That’s created a bias for simple, linear thinking.
Yet in today’s networked marketplace, agility trumps efficiency. Innovation has become the primary driver of value, which means that you need to constantly identify and incorporate new ideas, many of which do not fit into neat little boxes. That’s why managing complexity is emerging as a core business skill. You can’t create truly new value without it.
The first step to managing complexity is to understand that there are different types of complexity. The first, the complexity of an entity, like steps in a process, almost always should be reduced because simplifying entities makes them easier to understand.
The second type of complexity, that of a system, is unavoidable and often leads to nonlinearity, such as accelerating returns. These often advance at an exponential rate.
The final type, emergent complexity is what happens when chaotic interactions between entities combine to create something completely new and unexpected. We can—and often do—minimize this type of complexity, but we shouldn’t.
While many companies work hard to keep things linear and simple, innovative firms work hard to embrace emergence.
Products and services are far more than the result of a particular set of inputs and processes, they derive their value by “crystallizing imagination.” To see what MIT’s Cesar Hidalgo, author of Why Information Grows means, take a company like Apple. Its first hit product, the Apple II, crystallized the imagination of not only Steve Wozniak and Steve Jobs, but also that of the other members of the Homebrew Computer Club, whose meetings they attended.
Innovation is never a single event, but tends to follow a long and twisted path. It’s what emerges when complex networks of ideas combine to solve an important problem. That, in essence, is how value is created.
The need to embrace complexity is fairly obvious in high tech industries, but Zeynep Ton argues in The Good Jobs Strategy that the same principle also holds true in industries that we wouldn’t ordinarily associate with creativity and innovation. Trader Joe’s, for instance, limits the numbers of products it carries, partly because that allows its employees to become experts on the products the store does carry and manage complex customer interactions.
Today, as processes become increasingly automated, gains from efficiency are harder to achieve and the ability to collaborate is becoming a key source of competitive advantage. These days, we need to access ecosystems through platforms. In other words, value is created at the center of complex networks and the center of any network is always a chaotic place.
And that’s why managers need to embrace complexity. Not because it will make their enterprise more efficient—it won’t—but because that’s what will allow them to create maximum value in an increasingly complex marketplace.
Once people have set a goal, they are much more likely to complete it when the steps to achievement are set out in a rigid, restrictive way. While there’s no doubt that a flexible approach encourages more people to adopt a goal, that same flexibility actually hinderes the goal’s completion.
But why? The answer, it seems, has to do with the limits of people’s decision-making ability.
According to a variety of sources, we are required to make as many as 35,000 decisions a day. So in the context of an already information-overloaded, decision-fatigued workforce, one thing people will likely appreciate is the need to make fewer, not more, decisions. And that’s exactly what a rigid approach to goal pursuit offers.
This insight sheds light on a dilemma often faced by leaders, managers, and anyone else who has the responsibility for setting and monitoring goals. Received wisdom is that a leader sets goals and then gives autonomy to teams to achieve them. This research suggests the exact opposite: Leaders should be flexible in their approach to setting a goal, but once a direction has been agreed on, they should be rigid with the steps to achieve it. Which is best?
The answer, as is very often the case when it comes to people’s behavior, is that context matters. In situations where the goal that is being pursued is a relatively simple one, and the motivation to achieve that goal is quite strong, this research suggests that taking a flexible rather than fixed approach to the steps required to achieve the goal typically works best. However, in situations where the change required is quite hard, or if a leader believes that the motivation levels in her team might be low, creating a rigid sequence and structure should be more effective.
Adopting this “rigid versus flexible” approach to setting goals could even help when it comes to your own achievements. The next time you set a goal for yourself, or your team, think about whether you’re looking for buy-in or follow-through, and set a path to success accordingly.
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Developing future leaders is a need for most organizations, and many have invested in impressive leadership development programs aimed at doing just that. Yet most companies report they lack the leaders they need. Deloitte’s 2016 Human Capital Trends study revealed that nearly 30 percent of organizations have weak or very weak leadership pipelines, and nearly 90 percent of organizations see this as a critical business challenge. The lack of adequate leaders jeopardizes companies’ ability to thrive in fast-changing markets.
Now, our new research offers a refreshing perspective: Leadership development happens most effectively in a business context, not just in training sessions. Our analysis shows that, no matter how much organizations focus on delivering sophisticated leadership programs, if prospective leaders are immersed in a workplace that does not support leadership development objectives, such efforts will likely produce limited returns.
Our Leadership Maturity Model illustrates that the least mature companies rely primarily on formal training programs for leadership development; they generally do not focus on the culture and design aspects of their organization as levers of leadership growth. In contrast, the more mature companies embed leadership growth into their daily work processes and culture.
The organizations with the strongest results in terms of financial and business outcomes were those that develop leaders by connecting them with other leaders, and providing continuing opportunities for emerging and growing leaders to exchange information, knowledge, and new ideas about the company identity and leadership profile.
The key question to answer, then, is: What are the practices and activities that comprise the right kind of organization to develop the best leaders? Out of 111 potential practices we tested in our survey, the data revealed more than a dozen that were strongly correlated to business and leadership outcomes. Looking closer at these practices, we found five of these critical practices share one underlying theme: Leaders tend to learn best with other leaders and from other leaders—inside or outside of their organization.
- LET’S TALK ABOUT IT: WHAT DOES SUCCESSFUL LEADERSHIP LOOK LIKE? Many organizations have carefully crafted leadership competency profiles—but relatively few leaders actually know or use them.
- HAVE YOU TAKEN A RISK TODAY? FOSTERING A CLIMATE OF EXPLORATION AND EXPERIMENTATION. To work effectively in fast-changing markets and technologies, budding leaders need to build up their risk tolerance.
- SPREAD IT LIKE WILDFIRE: KNOWLEDGE-SHARING AS A TOOL FOR LEADERSHIP DEVELOPMENT. A winning business strategy is not enough to stay competitive; business leaders also need to be aware of what’s going on in the larger organization and external environment.
- SEE THE WORLD: EXPOSING LEADERS TO OTHER LEADERS, NEW CONTEXTS, AND NOVEL CHALLENGES. One of the key findings of this study is that the learning methodology that is most effective for leadership development is exposure to peers and colleagues, as well as to consumer feedback, new external contexts, and social networks.
- MAKING CONTACT: THE IMPORTANCE OF STRONG TIES BETWEEN HR AND BUSINESS LEADERS. The most mature companies we studied seemed to have found a way to create a symbiosis in which HR uses its expertise in leadership development to collaborate closely with business leaders, who apply and model leadership learning in the workplace.
The most effective way to promote social leadership is by setting the expectation that leadership happens in social settings every single day. Our research shows that this socialized approach works—and that organizations that use it have more capable leaders and stronger business outcomes.
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The ethnic, linguistic and cultural background of migrants has triggered intense debates over the benefits and the costs of growing diversity and the risk of open borders to national identity.
Debates over what it means to be a “true” American, Australian, German or other nationality have often highlighted the importance of a person being born in a particular country. But contrary to such rhetoric, a Pew Research Center survey finds that people generally place a relatively low premium on a person’s birthplace.
These are the findings from a cross-national poll by Pew Research Center, conducted in 14 countries among 14,514 respondents from April 4 to May 29, 2016.
Majorities in every country surveyed say it is very important to speak the dominant language to be considered truly a national of that land. This includes a median of 77% in Europe and majorities in Japan (70%), the U.S. (70%), Australia (69%) and Canada (59%). In addition, sharing national customs and traditions is very important to many people’s sense of “who is us.”
The survey also asked about the link between religious affiliation and national identity. About a third (32%) of people in the U.S. believe it is very important to be Christian to be considered truly American. This contrasts with 54% of Greeks who say this, but only 7% of Swedes.
Across the countries surveyed, there are significant differences in how the youngest and oldest generations view national identity. In the U.S., people ages 50 and older (40%) are more likely than those ages 18 to 34 (21%) to say it is very important that a person be born in the country to be considered truly American. The generations differ even more sharply over the importance of national customs and traditions. In the U.S., people ages 50 and older (55%) are far more likely than those ages 18 to 34 (28%) to say sharing such cultural elements is very important to being truly American.
In many countries, the debate over national identity is a partisan one. In the U.S., more than eight-in-ten Republicans (83%) say language proficiency is a very important requisite for being truly American. Fewer independents (67%) share that strong belief and even fewer Democrats (61%) agree. Among Republicans, 60% say that for a person to be considered a true American it is very important that he or she share U.S. culture. Only 40% of independents and 38% of Democrats agree that this is very important to being truly American.
A clear partisan split in the U.S. also exists on the importance of being Christian. More than four-in-ten Republicans (43%) say it is a very important part of being an American. Fewer Democrats (29%) and independents (26%) share this view.
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