Managing Complexity in Organizations Through a Systemic Network of Projects

Abstract

Managing complexity has become one of the most important issues for economists and managers over the last twenty years. The reason for the increasing importance of this issue is related to the exponential growth of interconnections and interdependencies that has arisen in contemporary society and organizations. Organizations often struggle to adapt their management methods to the shift towards increased complexity. We present a management methodology, ‘The Decalogue’, that is a systemic approach for managing complexity in organizations and supply chains through focusing on constraint management (Theory of Constraints) and the understanding and control of variation (Theory of Profound Knowledge). Through the application of this methodology, an organization can transform its operations from a traditional hierarchy (silo mentality) to an organizational model of a systemic network of projects that is appropriate for operating and adapting within a complex reality. We conclude that the approach we present, specifically applied to organizations with a well defined goal, is a “systemic” approach focussing on constraint management and control of variation. This systemic approach leverages the intrinsic process and project-based nature of the work of organizations. Traditional hierarchy is replaced by a different kind of hierarchy, driven by the goal of the system and governed by a new design of the organization as a “Network of Projects”. The Network of Projects requires a cognitive shift and provides a robust and sustainable model for organizations to adapt and develop within a complex environment.