The complexity dilemma: Three tips for dealing with complexity in organizations

Today storm-tossed markets call managers to take a stand on the rising up of external complexity. Organisations are constantly facing a crossroad (complexity dilemma): To accept and nurture complexity, or to avoid and reduce it. The first option can be traced back to Ashby’s Law of Requisite Variety, 1. while the second comes from Luhmann’s Complexity Reduction, 2. Both Ashby and Luhmann theories are valid due to an inverted U-shaped relation between complexity and firm’s performance, called “complexity curve”. Once fixed the amount of external complexity, performance increase as internal complexity increase, till reaching a tipping point; after that point, an overburden of complexity sinks performance. To solve Ashby-Luhmann trade-off on complexity, and moving over the complexity curve, we suggest that complex organizing may be facilitated by a simple design through (i) modularity, (ii) simple rules, and (iii) organisational capabilities.