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 International Conference on Complex Systems (ICCS2007)

Tools for improving proactive decision making in complex environments

Donald Heathfield
Future Map

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     Last modified: June 29, 2007

Tools for improving proactive decision making in complex environments

Complexity imposes new requirements on the organization’s structure and the organization’s behavior, particularly on its leadership practices. What is the impact of complexity on decision making processes?

Complexity creates a different decision making environment. The complexity of current internal and external environments for governments and large corporations is such that it is difficult to define the real borders of an organization and distinguish between internal and external contributors. Short-term issues are inseparable from long-term choices, and responses to what can be perceived as a small local or divisional issue require participation of the whole corporation. As Professor Leon Fuerth of GWU remarks,”there are no permanent solutions for problems arising out of complexity: instead, problems mutate and require permanent management.”

In theory organizations should respond to those challenges by matching the complexity of their systems to the level of complexity of their environment. We see the appearance of new organizational structures and practices that are based on the principles of Distributed control, Self-organization, and Networked decision-making.

Leadership practices are also changing to better deal with external and internal complexity. New, emerging leadership behaviors emphasize pro-activity, inclusiveness, continuous feedback and the need to accommodate multiple competing perspectives. Enterprises move away from budget cycle-based decision processes towards issue-driven processes.

Ultimately, the long lasting impact of leaders on organizational structures and behaviors is reflected in tools and processes that enterprises develop under their stewardship. We observe, however, that enterprises lack the tools that would help deal with increasing internal and external complexity. Despite almost unlimited capacity of people in a company to communicate and exchange information, their ability to organize the information in a way that is helpful in making proactive decisions in complex environments did not increase. However, according to Fuerth, “there is a relationship between how information is organized, and how it can be acted upon.”

To respond to both structural and behavioral requirements of decision-making organizations need new tools for organizing information. In particular we need to address the following challenges.

1. People involved in decisions are often not “on the same page.” Organizations lack the shared “big picture” of their environment which is indispensable for self-organizing and a networked decision-making, which are based on a common understanding of strategic direction. This shared picture is also a requirement for an organization-wide dialogue and learning without which distributed control is impossible.

2. Navigating complex environments requires constant change. Change requires time, so people in an organization can become Aware of the new reality, Accept this reality and Adapt to it. In a complex, fast paced environment the time for making sense of the reality is often very short or not available at all. One solution is to “borrow” that time unavailable in present from the future – i.e. to start the process of becoming aware of upcoming reality and accepting change farther ahead of a decision time. This means that we need to stretch the “big picture” of the environment as far into the future as possible.

To be more successful in dealing with complexity organizations need a shared “big picture” of the future. The presentation at the Conference will deal with the ways of building that picture.

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