The Reason why there are Managers is  Complexity Management

The secret of good performance in a company lies in the interaction of its systematic elements and in controlling complexity

Managers must be excellent leaders and masters of complexity management. This is especially important if they are in charge of managing manufacturing companies. Manufacturers often need hundreds – sometimes thousands – of employees, from blue-collar workers to the CEO, who are organized in units of various sizes and with various responsibilities. In addition, there are sophisticated technologies, processes and machines that need to be managed.

A company is composed of numerous elements that are interconnected and subject to continuous changes. The entire unit in turn is linked to the corporate environment – to markets, customers and suppliers. All this in different locations, often spread across several continents.

The secret of good performance lies in the interaction of the system’s elements.

 Managers often face situations in which their decisions depend on many shifting factors of influence. These influencing factors are frequently interconnected and affect each other. It is impossible to fully comprehend the extent of these interdependencies. The world which managers must succeed in is complex and impenetrable since one inherent characteristic of complex systems is that their behavior cannot be clearly determined or predicted.

A manager’s task is to control this complex system in a way that enables the company to achieve its goals. To this end, all components of the company must be connected into an effective value-adding unit. The key prerequisite for this to succeed is that all employees and organizational units must have a clear idea about what they need to do to contribute to the success of the entire company.To achieve this, the complexity of a company and its environment must be made manageable for an organization.

The reason for having managers lies in controlling this complexity. The ability to see through complexity and to resolve it for the organization at large must be considered a key attribute of managers today. This starts with the managers themselves. Management is about handling the necessities of business. An effective manager at all times understands how to create the most effective lever through their actions. The question is: “How can I achieve the greatest possible effect using my personal resources in view of the things that need to be done?”

Time is another key factor. A manager’s day consists of 24 hours, and their week consists of seven days. This amount of time must be used efficiently, although it goes without saying that an individual cannot work nonstop during such a period of time.        

Complexity management begins with a manager’s awareness of what needs to be done within the company at any given point in time. This is not dependent on what managers can do best or what they would prefer to do.  Managers must first develop a clear idea of where – considering business necessities – they must apply their own personal resources.

They must determine what issues must be processed, what can be safely put aside and in what order of priority the issues must be dealt with. Once the manager’s personal orientation is clear, the same clarity must then be propagated to the organization as a whole.Employees must also understand the necessities of business and know what they need to do to contribute to the company’s success, by means of their activities and results.Clarity is created by communication that goes both ways, top-down and bottom-up, because in a complex environment, managers are well-advised to test their own perspectives against those of others.         

Thus, the framework of action for the entire organization is established at the upper management level. The task of upper management is to reduce the complexity within a company and create a portfolio of tasks that is manageable for the organization as a whole.          

Top performance and top results are the results of focus and concentration. A star tennis player focuses only on playing tennis and does not try to also be a master high jumper. A virtuoso piano player focuses only on playing the grand piano.However, such an extreme focus is often not achievable in today’s management, since getting bogged down in details and taking on too many tasks puts performance and success at risk. This is particularly true in the utilization of employees. They must be engaged in value-adding activities instead of generating idleness.

Performance begins with having the right person in the right place with a clear understanding about the tasks that need to be accomplished, knowing who should take on which tasks, and determining priorities and which tasks can be set aside. A manager’s mission is to guide employees towards efficiency, engagement and performance. To this end, a company needs to be an organization that enhances maximum value-adding and minimizes idleness. As such, one fundamental managerial task is to build an effective organization. That is the basis for adding value and profitability and determines the degree of achievable performance. An organization must be structured in a way that enables it to cope with complexity, i.e., all tasks that a company is faced with must be addressed within the organization or by external partners. An organization is nothing more than a problem-solving mechanism.

It cannot be stressed enough that the range of tasks must be manageable, since tasks are solved by human beings. The increasing tendency, especially in management, is to put too many hats on one person, which hardly ever leads to success, at least not in the long run, and has little to do with complexity management. This is often caused by managers overreaching themselves or by excessive downsizing of management positions.

A manager’s competency can be seen in the effectiveness of the organization they are in charge of.
An organization can be considered effective if:

• all employees know what their contribution is to the attainment of the company’s objectives
• all organizational units are aligned with the company’s goals and work together to attain the company’s objectives,
• processes are stable and under control, and producing the expected results,
• leadership, structures and culture all support employee performance,
• frictional losses at points of intersection are low,
• the organization maximizes added value and attains the set objectives,
• a company is complex only as necessary, and not more so.

A large influence on complexity management in an organization is the soft-factors, such as culture, trust, communication, information and leadership. It is a well-known fact that trust is an essential lever of complexity management. Lack of trust results in increased supervision. Supervision is important in management, but any monitoring activity increases complexity. Trust is closely connected with confidence. In management, it is not enough to trust a person – a manager must also be confident that the employee is capable of handling the business tasks.

In a complex, dynamic world, business necessities and priorities change frequently. Every change necessitates adjusting the existing orientation of people, and sometimes this needs to be done very quickly. Complexity management requires a high degree of communication and information in both directions. Upper management depends on status reports from the organization and the corporate environment just as employees depend on instructions from upper management.

For the system to work there must be firmly established communication platforms, a factor that unfortunately is neglected in many companies. In order to lead, a manager must communicate and inform. How else can leadership take place? Rules, target objectives and work instructions at most only offer a foundation to align individuals in an organization to the company’s goals. The complexity that results from the extreme dynamics of today’s business life can only be faced with continual communication and information.
The reason why there are managers is complexity management. A fact that many managers still do not sufficiently understand.