Wednesday, 8 May 2019

Complex and Complicated

I was first exposed to systems thinking back in 2001 when working with some guys at Detica. The idea of a system of interactions with feed back loops and knock on consequences is fairly clear. Peter Checkland positioned it in literature but his books were a hard read.

Times change and new ways of presenting things appear to help us understand older concepts better. Recently I came across the words Complex and Complicated and although at first it seemed a bit semantic it cleared up some previous thinking with a nice model.

The words sound the same but as presented the complicated system is one with an engineering basis where things are difficult but logical and where 1 + 1 make two. The complex system however is more chaotic where the reaction to changes may not necessarily produce expected results.

How does all this fit with operating models? Well, it re-enforces the idea that there is not one form of operating model if a system some are complicated and some are complex and others have bits of both.  In a practical sense how does this realise itself? In low variability high volume organisations often mass market frequently B2C the model is one that describes a Complicated System - it is about algorithms processes and the elimination of variety in the operation. In these cases the business runs like a Swiss watch made up of many interacting well oiled components consistently delivering the same result time and time again - typical lean sigma territory.

The model of a system that is complex is more likely to be in services where there is a high rate of variety and heterogeneity - each case is different each customer interaction is a unique set of professionally applied offerings, Process maps are almost pointless if not impossible to define. Typically these are B2B or sometime B2C but with a more professional services slant; consultancy, accounting, legal actuarial and other markets. The third option, this is probably highly common, is a mix of the two with a transcational core surrounded by a complex startegic product development outer shell.

This is helpful because often people in BPM or 6 Sigma peddle a "one way fits all" approach and in reality things are not as simple as all that. The words might be clumsy, I do feel there must be better ways to describe this, but the thinking behind it is sound.

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