Managing Complexity

There are many skills that go into making an effective leader but few as important as the ability to manage complexity. As the famous philosopher, Confucius once said, “Life is really simple, but we insist on making it complicated”.

As managers of complexity, leaders need to be intellectually curious, patient, and humble to acknowledge that they don’t have all the answers. They should also be able to break down complex problems into modular components as well as understand the interactions between them. The best leadership talent is positioned in the most complex roles.

There are 4 sources of complexity in management:

#1. Scale

Leaders may be placed in roles that involve managing large scale in terms of the size of business to be managed (in business role) or count of team members reporting or volume of units to be handled (in supply chain operations) or number of users of the product (in product management). Scale brings its own complexity in terms of breadth of issues to be managed with limited resources. Scale comes with the responsibility to be self-sustaining. A manager of scale needs to master resource prioritization to optimize productivity and drive operational efficiency.

At scale, it becomes impossible for leaders to have 100% context on all inputs. In this context, it is important to define planning and execution mechanisms that keep the team honest on the most important inputs and surface exceptions / deviations where the leader’s attention may be required. This is the reason why as startups scale, they bring on board experienced professionals from large companies to set up mechanisms to drive planning and execution. An annual operating plan is an example of a planning mechanism while a weekly business review is an example of an execution mechanism. Leaders use these mechanisms to train and develop their teams on the questions to ask and areas to dive deeper. Above all, a manager of scale needs to be good at attracting, retaining and developing good talent.

#2. Ambiguity

Leaders may be positioned in roles that are loosely defined with unclear outcomes. At times, leaders face ambiguity when their organization ventures into an area where it lacks institutional knowledge. Lack of expertise leads to many unknown variables and competent people who are used to winning could get stumped when they face an ambiguous problem. In ambiguous problem statements, you may invest resources in testing many hypotheses with only a few yielding results. This may result in wasted effort and multiple iterations may be required to develop clarity. In the face of ambiguity, leaders need to stay humble, ask questions with childlike curiosity to learn and take a first-principles based approach to problem solving. Such situations may also demand leaders to take a step back, see the big picture and connect the dots to develop clarity on the path forward and drive execution.

In ambiguous situations, the link between inputs and outputs are not always evident and impact often takes time to show up. It could be demotivating for the team if only output metrics are tracked. It is important to focus more on inputs and celebrate milestones in input metrics with the conviction that the inputs will deliver the desired outcomes over time. The true test of conviction in inputs is when the outputs are trending in the wrong direction often in case of a market downturn. Leaders need to have steely conviction and persistence to stay focused on inputs while navigating the troughs.

#3. Dependency

Leaders are often placed in roles that require influencing multiple stakeholders (without authority) to get things done. When an organization is in its infancy, the line businesses own end-to-end functions and dependencies are fewer and it is easy to execute and scale new ideas. As the organization grows, centralizing functions becomes imperative to deliver operational efficiency. Dependencies grow as functions get compartmentalized often with matrix organizations that have competing priorities. As a result, a new idea will require collaboration across a larger number of teams to execute. Lack of control and a perceived lack of levers can be a challenge in such roles. Leaders need to map relevant stakeholders and socialize ideas to influence them without authority. This can be a tedious and frustrating exercise especially when the leader has limited leverage. Such roles demand patience and resilience from leaders to win people over and get things done.

Influencing without authority requires a systematic approach starting with mapping stakeholders who are either interested in the decision or have control over the decision-making process. While keeping the interested parties informed, it is important to satisfy and manage the parties with control closely. To do this, leaders need to understand the process / mechanism to influence these parties. While 1:1s are effective in some situations, plugging into an existing planning/execution mechanism may be more effective in certain others. Having identified the forum, it is important to get the pitch right by addressing not just the what but also the why and how the decision has a broader impact. Leaders may have a preferred influencing style varying from purpose-driven inspirational style to data-driven logical style. Leaders need to adapt their personal style to the context and audience to be effective in managing dependencies.

#4. Urgency

Leaders may be placed in roles where they are racing against time to deliver a goal. In such scenarios, they may not have the luxury to evaluate all options and may need to act and adapt. Such situations call for strong willed leaders who can take quick decisions with imperfect data and direct team members to deliver efficiently. Urgency may be a function of a competitive market or a crisis situation. In the face of a crisis, leaders must develop the ability to stay calm, rally their team behind a unifying purpose and offer clear explicit directions to deliver results.

In crisis situations, leaders would need to take tough decisions and be willing to be misunderstood for extended periods of time. They may have to rely on their intuition for time-sensitive decisions. They need to act with conviction even when they are not necessarily sure. It is important to know that not all decisions may turn out to be right but they need to get the big picture right and inspire the team to deliver results in a constrained environment.

In my career, I managed different dimensions of complexity in different roles. As a management consultant in KPMG, I got an opportunity to manage dependencies as I worked with clients to understand the problem statement, get relevant inputs, analyze data, validate findings, come up with recommendations and drive execution. In Flipkart, as a P&L leader, I was responsible for a large team and a big P&L and shouldered the responsibility to driving revenue and profitability through which I managed scale and urgency. I also took up a program management role in which I had the opportunity to work on an ambitious experience revamp across functions that provided me an opportunity to manage ambiguity and dependency. In Landmark Group, I was responsible for launching the international ecommerce business from scratch (ambiguity) and collaborate with concepts to fund international expansion (dependency). In Amazon, I listen to selling partners (SPs) and design products and programs for a large base of SPs across Europe. Here I have the opportunity to manage ambiguity and dependency at scale.

In large organizations, all dimensions of complexity converge and it is important to find multi-faceted leaders. As a leader, it is imperative that you would be expected to manage all 4 dimensions of complexity as you rise up the corporate ladder. You can get better at managing complexity requires through systematic application of the underlying skills.

When you think of switching roles next, here are few questions you may want to ask yourself:

• What is the nature of complexity in the roles you are considering?
• Which dimension of complexity would you like to stretch yourself on?
• Which leadership skill do you want to develop / sharpen?

In an increasingly volatile, uncertain, complex and ambiguous (VUCA) world, leaders need to develop the ability to cut through complexity, get to the essence of the issue, and find ways of making things simple. In the words of renowned artist, scientist and inventor, Leonardo da Vinci, “Simplicity is the ultimate sophistication”!