Business

An organization fit for its context

August 26, 2015

Read time 2 min

How do you create a company that evolves with its business? How do you fit an organization for its context? By combining complexity theory and systems thinking to create an experimentation culture.

Complexity theory divides the world into four domains: simple (a bicycle), complicated (a Ferrari), complex (an organism) and chaotic (a fire). How we conduct ourselves should depend on the domain we are in.

To repair a bicycle, you can read a manual, find the problem and fix it. To fix a Ferrari there’s a lot more detail and some of the variables are outside our control, but still thorough work will most often get you through.

When we get into the complex domain, where everything is interconnected, thorough planning will no longer achieve the results we want. Cause and the resulting effect are not discernible since our actions change the game. When we do something, our competitors react.

Most businesses today are in the complex domain. The pace is fast, competitors react quickly, new industries are born in a matter of months, old industries are disrupted constantly.

The proper way to conduct ourselves in the complex domain is through experiments. Constant, short, safe-to-fail experiments that give us empirical data on what works. Successful experiments are scaled up, unsuccessful ones we learn from and then forget.

Yet blind experiments, random shots in the dark, are not effective. We need something to guide our experiments. When we understand our business and our organizations as a system, we can make educated guesses on what would lead towards better performance for the whole company. Systems thinking helps us find leverage.

When we combine these lessons from complexity theory and systems thinking, we can build a culture of constant experimentation. A culture in which everyone’s role is to do their work and improve their work.

As a result of this we get an organization that’s always fit for its context. When the business changes, our organization adapts through experiments.

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