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Dealing with disruption: How to create order out of chaos

by CHE Proximity

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Thanks to everyone who made it to our July curious breakfast about the power of disruption. We showcased an insightful presentation from our resident director of innovation – Joe Heath.

There are few conversations more prevalent in the boardroom than how to deal with threat of disruption.

Over the last 60 years the average life-span of a business has shrunk from 62 years to 15 years; and today they have a 1 in 3 chance of being delisted in the next 5 years.

Analysts believe the cause of the decline is the heightened complexity of the operating environment.

In short, businesses are dying younger because they are failing to manage, respond and adapt to an increasingly complex reality.

The inability to adapt to complexity is a systemic issue caused by structure and practices that define many modern organisations.

Many of the practices can be traced back to the principles set out at the turn of the 20th century by Frederick Taylor. ‘Taylorism’ promotes the maximisation of efficiency to deliver optimum productivity. By breaking down a business into its constituent parts, standardising tasks and removing human decision making managers could effectively transform a business into a well-oiled machine.

Despite its successes, it's becoming increasingly apparent that this mechanistic model is ill-suited to the age of complexity.

OrderChaos

If we hope to secure the future of big business we need an alternative approach. Our new playbook for the age of complexity is ‘Systems Thinking’.

‘Systems thinking’ is an interdisciplinary approach and set of principles designed to help us make sense of the complex world and our role within it.

According to system thinkers the universe is made up of systems. From solar, natural, political, economic or societal systems, our world is governed by a powerful force that binds all matter together into patchwork of interdependent systems.

Systems thinking has been applied extensively to organisational theory and many of the principles are increasingly being adopted by big business.

An organisation is an example of a ‘complex adaptive systems’ (CAS), other examples include rainforests, cities and ant colonies.

A CAS is a self-organizing systems of independent agents, capable of constantly renewing and evolving through an open relationship with their external environment.

When you affect one part, you automatically affect all parts. When you affect the whole, all parts are affected. The individual parts are in some kind of communication and feedback with each other.

To survive a CAS must preserve its integrity, but must remain open and continually adapt. If it closes off from its external environment they ultimately die.

Over the last century the principles of ‘Taylorism’ have transformed organisations into rigid, closed systems, which make it difficult to adapt to heightened complexity and rapid change, ultimately setting them on a course for their demise.

If organisations hope to turn this around they must start to understand their operations in the context of the broader set of systems, they operate within.

Order over Chaos has been launched to help organisation rethink the way they engage with their environment. We use a transformative process called ‘adaptive resilience’ to foster a culture of openness and change that not only ensures organisations can defend against future disruption, but start to embrace the opportunities that complexity presents, freeing up capacity to thrive and grow.

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