Slides Making the complex simple (EN)/media/Corporate/Pdf...© Vlerick Business School PERFORMANCE...

MAKING THE COMPLEX SIMPLE

PROF DR MARC BUELENS

© Vlerick Business School

PERFORMANCE MODELS 2014

Inspiration/Innovation

Intelligence

Institutions/infrastructure

2


STARTING POINTS

VUCA

The age of scepticism

Our ‘lazy brain’ meets

big data

A complex world

Wicked problems

3


THE FUTURE IS NOT WHAT IT USED TO BE

In a VUCA-world, companies and managers

are taking longer to reach critical decisions (Economist Intelligent Unit)

need to be willing to conceive multiple futures

find themselves more and more removed from reality


A SCEPTICAL WORLD

Bombarded with brands

3.000 logo’s a day?

Boston Consulting group: 46% of Millennials use their smartphone to check prices

134.000 consumers in 23 countries: majority would not care if 73% (in Europe: 92%) of brands would disappear

5


slowslow fastfast

OUR ‘LAZY BRAIN’ : SYSTEMS 1 AND 2 IN ACTION

2 1


MORE INFORMATION, MORE ‘ BIG DATA’ …

Lead to more noise

Lead to late identification of the ‘signal’

Lead to ‘information overload’

“IN THE AGE OF TECHNOLOGY THERE IS CONSTANT ACCESS TO VAST AMOUNTS OF INFORMATION. THE BASKET OVERFLOWS; PEOPLE GET OVERWHELMED; THE EYE OF THE STORM IS NOT SO MUCH WHAT GOES ON IN THE WORLD, IT IS THE CONFUSION OF HOW TO THINK, FEEL, DIGEST, AND REACT TO WHAT GOES ON.”

CRISS JAMI

COMPLEXITY IS A BUSINESS CHALLENGE

IT IS A SILENT KILLER


WHY COMPLEXITY?

STRATEGY & STRUCTURE

Business model complexity

Portfolio complexity

We love division of labour ‘simple jobs’ ‘complex organizations'

We don’t trust each other: too many regulations

PEOPLE

We are too clever (clever people want to add, they hate not being complete)

We lack expertise. Pseudo-experts go for the complex

We believe in groups even when groups are not very effective

Diversity is extremely difficult to manage


THE WELL-KNOWN CONSEQUENCES

Feature creep

The law of unintended consequences

From clear to ‘wicked’ problems


Environment Mechanical Professional Organic VUCA

Decision-making Rule-based“Expert squeeze”

Informed intuition “Unknown unknowns”

Problems Well –Structured Reliance Ill-structured Wicked

Knowledge management

Combination Externalization Socialization Contextualization

Key-wordsOperations Research

Signal/noise ratio’s

Prediction markets;Neural networks

Black Swans; Obliquity; Memory of the future


THREE MAJOR OVERLOADS

OverloadOverload

InformationInformation

EmotionalEmotional

OpportunityOpportunity


“A copy of the daily New York Times contains more information than the average 17th-century Englishman encountered in a lifetime,” Geoffrey Nunberg


Lead to ‘emotional overload’

Lead to ‘stop the planet’

Lead to clinical symptoms

A WORLD OF WINNERS AND SINNERS,MORE STORIES, MORE GAMES, MORE STIMULATION


EMOTIONAL OVERLOAD

Dopamine makes everything urgent

We live in casino full of slot machines

Why does my brain feel so clogged up?


OPPORTUNITY OVERLOAD

Everyone entrepreneur?

Authenticity for all of us

Make up your mind on all subjects?


THE LAWS OF SIMPLICITY

1. Remove to improve

2. Simple rules as strong anchors

3. Take an outside-in perspective. Simplify for value

4. Identify designed complexity

5. Try wisdom


LAWS OF SIMPLICITY


REMOVE TO IMPROVE


SIMPLE RULES AS STRONG ANCHORS

In essence, the anchoring effect is about the brain’s spectacular inability to dismiss

irrelevant information

Jonah Lehrer (2009)


25.000 companies

44 years

Harvard Business Review April 2013

Better > cheaper

Income > cost savings

The third rule?


THOMAS AMARILLO SLIM (1928 – 2012)

Play the players, not the cards

Play fast in a slow game, play slow in a fast game

If you can't spot the sucker within the first half hour at the table, then ...


OUTSIDE-IN PERSPECTIVE (LISA BODELL)

1. Kill your own company

2. Include haters in your brainstorm

3. Rule # 6

4. Go from pain to gain

5. Figures out what your customers do all day


IDENTIFY DESIGNED COMPLEXITY


TRY WISDOM

Knowledge offers comfort; wisdom feels comfortable with uncertainty (Hall,2010)

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