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Managing complexity

In business, complexity gets bad press. That’s not surprising. It can be cognitively demanding to understand how a system or organization made up of many very different interconnected elements actually works. But the fact that such systems or organizations are difficult to understand doesn’t make them inherently bad.

Complexity is defined as a large number of different elements that have many different connections to one another. Both abundance of elements and connections can be a source of advantage or disadvantage, depending on how they’re managed.

When poorly managed, a variety of interconnected elements can reduce efficiency and understandability, leading to unmanageability and unpredictability.

Fortunately, runaway complexity is not inevitable. Some strategies allow companies to mitigate out-of-control complexity’s growth, turning what once seemed a threat into a competitive asset. The truth is that while managers may prefer simplicity over complexity, the latter is increasingly necessary for viability and competitiveness in today’s dynamic and unpredictable business environment.

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