Leadership is about to undergo a radical transformation not seen since 1850. If you have read my book The Art of Retreats or attended my leadership programs, you know what I am talking about. Complexity is the foremost challenge for modern corporations and our leadership is not equiped to embrace it.
Complexity refers to a system with many interconnected and interdependent entities. The characteristics they exhibit together are different from their individual properties. Examples of complex systems abound: financial and macroeconomic markets, road traffic, raising children, urban development, and corporate culture.
In a complex system, we cannot establish a causal relationship between action and results. It doesn't matter how hard we try.
Bad news for Cartesian thinkers. A complex system cannot be reduced to the sum of its parts. We can take an airplane apart and assemble it again. But not an ecosystem.
Why is complexity such a threat for our leaders? We operate with a software that has not evolved in 150 years since the second industrial revolution. We invented our tools to allow for predictable scaling and mass production. Pyramidal org charts, command-and-control, silos, pay-for-performance, SOPs, and budgets.
The tools made sense then. The top was literate upper class and knew better. The bottom was under motivated and uneducated blue collars. The thinkers of that era, like Frederick Taylor or Henry Ford, brought structure and predictability to large systems.
150 years later, we still rely on the same tools. They work great to operate trains, power grids, hospitals, and microchip factories. We need predictability, reliability, and certainty in many aspects of our life.
But many problems that leaders face today are complex. Geopolitical shifts, shaping corporate values, or fostering innovation require a different approach. One where we are comfortable not knowing. Where we accept that employees on the front lines may know better than the top. Where we can harness the collective power of thousands of brains together. Where we awake to the fact that this is a journey and there is no destination.
It is time for leaders to wake up. Our fear of uncertainty is holding us back. Our need to control our environment, instead of working with it, is toxic. Our companies are rigid and inflexible. Our reliance on docile middle management to enforce blindly creates misery.
Unless we awake, we will continue working harder and harder for less and less. Our companies' lifespan will continue decreasing. We will resort to ever more fraud and unethical behaviors to make up for the shortfall. In the process, we will make our employees miserable and disengaged. And in a desperate attempt to survive in the face of a force we refuse to embrace and befriend, we will continue destroying our most precious collective assets – our planet and our societies.