The Complexity Challenge

March 3, 2011 By Aminda

IBM recently released the report Capitalizing on Complexity, containing insights from their 2010 Global CEO Study which consists of face-to-face conversations with more than 1,500 chief executive officers worldwide.

The report states that a shift has taken place in what is weighing on the minds of today’s leaders. No longer primarily concerned with how to cope with change, as in the past three studies, the 2010 interviews identified a new primary challenge: complexity.

 One of the primary findings identified in the study was that today’s complexity is only expected to rise, and more than half of CEOs doubt their ability to manage it. This “complexity gap” looks to pose a bigger challenge than any factor measured in IBM’s eight years of CEO research. Eight in ten CEOs expect their environment to grow significantly more complex, and fewer than half believe they know how to deal with it successfully.

 Interestingly, the younger generation feels ready to step up to this challenge. A separate study from IBM asks students many of the same questions as they ask in the CEO study. The “Millennial” generation, which will soon make up half of the global workforce, were more confident that information and analysis can be used to better understand even the most complex environment.

 The CEO study did identify current leaders who were rising up to the complexity challenge and providing direction on how to capitalize on complexity. The study found that these “standouts” focused their attention on three areas.

 Embodying creative leadership— Creative leaders consider previously unheard-of ways to drastically change the enterprise for the better, setting the stage for innovation that helps them engage more effectively with today’s customers, partners and employees.

 Reinventing customer relationships— With the Internet, new channels and globalizing customers, organizations have to rethink approaches to better understand, interact with and serve their customers and citizens.

Building operating dexterity— While rising complexity may sound threatening at first, reframing that initial reaction is fundamentally important. Successful CEOs refashion their organizations, making them faster, more flexible and capable of using complexity to their advantage.

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