Is Your Company’s Problem Complicated? Or Complex?

I came across a Harvard Business Review article that explores the difference between complicated and complex business problems. It provides valuable insights on how to identify and effectively address each type. I found it particularly resonant with the challenges I face at work, as it echoed many of the conclusions I’ve reached, but presented them more eloquently.

I included both the link to original article as well as my notes:

Key Points and Takeaways from “Is Your Company’s Problem Complicated? Or Complex?”

Published by: Nitin Nohria, Bill George, and Kayti Stanley on December 10, 2024 https://hbr.org/2024/12/is-your-companys-problem-complicated-or-complex

Main Ideas

1. Complicated vs. Complex Problems:

   • Complicated: These are like big puzzles with clear pieces. You need expertise and a step-by-step plan to solve them. Think engineering projects or launching new software.
   • Complex: These are more like tangled knots where things are always changing. You need to be flexible and ready to adapt. Examples include handling a pandemic or navigating shifting market trends.

2. Real-World Examples:

   • Best Buy and Covid-19: CEO Corie Barry faced the pandemic by setting clear priorities (safety first, avoid layoffs, focus on long-term value) and adapting as things changed, instead of sticking to their usual rigid methods.
   • Tylenol vs. Boeing 737 MAX:
     • Tylenol Crisis: A complicated problem where Johnson & Johnson acted quickly and systematically to recall products and ensure safety.
     • Boeing 737 MAX Crisis: A complex issue with many stakeholders and no clear solution, requiring ongoing adaptation and collaboration.

3. Impact of a VUCA World:

   • VUCA: Stands for Volatile, Uncertain, Complex, and Ambiguous.
   • The modern business world is full of interconnected crises, making problems more complex than before. Leaders need new skills to handle this complexity.

4. Six Steps to Manage Complex Problems:

   • 1. Stick to Your Mission and Values: Let your core principles guide your decisions.
   • 2. Fully Understand the Problem: Look beyond the surface to see all the factors at play.
   • 3. Stay Flexible: Be ready to change your approach as the situation evolves.
   • 4. Use Real-Time Feedback: Continuously gather and respond to feedback.
   • 5. Engage All Stakeholders: Involve everyone affected to get diverse perspectives.
   • 6. Develop Adaptive Leaders: Train leaders to think creatively and handle ambiguity.

5. Case Study – Nestlé’s Maggi Noodles Crisis:

   • Faced with safety allegations in India, Nestlé used the six-step approach to navigate the crisis, engage stakeholders, and eventually relaunched Maggi successfully.

What You Can Learn and Apply

1. Know Your Problem Type:
   • Take a moment to figure out if you’re dealing with a complicated or complex issue. This helps in choosing the right strategy.
2. Embrace Adaptive Leadership:
   • Cultivate flexibility, creativity, and resilience in your leadership style to handle unpredictable challenges.
3. Stick to Your Core Values:
   • Let your company’s mission and values guide your decisions, especially during tough times.
4. Be Flexible and Iterative:
   • Don’t stick rigidly to one plan. Be ready to experiment, learn, and adjust as needed.
5. Engage Everyone:
   • Involve all relevant stakeholders to get a wide range of insights and build trust.
6. Set Up Feedback Loops:
   • Create systems to gather and act on feedback quickly, helping you stay responsive to changes.
7. Invest in Leader Development:
   • Train your leaders to handle complex situations with intuition and adaptive skills, not just traditional problem-solving methods.
8. Balance Short and Long-Term Goals:
   • While addressing immediate issues, keep an eye on long-term success and sustainability.

Putting It All Together

Understanding whether your challenges are complicated or complex is crucial for choosing the right approach. For complicated problems, use structured, expert-driven methods. For complex issues, adopt flexible, adaptive strategies and engage broadly with stakeholders. By doing so, your organization can navigate uncertainties, innovate effectively, and thrive even in a volatile world.

In a Nutshell:

• Complicated = Big puzzle with clear steps.
• Complex = Ever-changing knot needing flexibility.
• Adapt your leadership and strategies based on the problem type.
• Stay true to your values, engage everyone, and keep learning.

By recognizing the nature of your problems and applying the right strategies, you can lead your company through both predictable challenges and unpredictable storms with confidence and success.