Six Simple Rules: How to Manage Complexity without Getting Complicated

The more an organization needs cooperation to address complexity, the more power you need to have in the organization

Sir Alex Ferguson, the outstanding former manager of Manchester United, the English football (soccer) club, put it this way: “I don’t think many people fully understand the value of observing. I came to see observation as a critical part of my management skills.”

Since cooperation cannot be measured, rewarding people for their cooperation can only come through the personal recognition of the manager. Such recognition is the product, not of metrics, but of observation and judgment. As the word suggests, recognition is about cognition, knowing what people do and understanding what is really going on.

What you can measure:
Overall group output (revenues, profit, return on investment, speed to market, and so on).
Some individual inputs (efficiency of units in tasks independent of others).
What you can’t accurately measure:
The contribution of one individual or unit to the effectiveness of others (the contribution of procurement to the effectiveness of manufacturing, the contribution of front offices to the effectiveness of back offices, and so on).

It becomes impossible to measure who contributed what to the overall performance of the group.2 In a 4 × 100 meter relay race, for example, the victorious team is not always the one that has the fastest sprinters. The runners also have to skillfully pass the baton. To do so, they must divert energy to their arms to properly make the pass and to their voices to effectively communicate—rather than putting all their energy into their legs for maximum speed. Consider the 2003 World Athletics Championships. Of the eight teams competing in the women’s 4 × 100 meter relay final, the United States was heavily favored yet the French team won. Based on the individual records of its runners, the US team should have been the fastest by far. The sum of the 100-meter personal best performances of the four US runners, compared to that of the French runners, gave the US team an edge of as much as 3.2 meters. And, considering 2003 performances only, the US margin over their French rivals was 6.4 meters. According to Christine Arron, who ran the final leg for the French, the win was achieved through exceptional cooperation.3 In this kind of activity, there is no way to precisely measure individual performance.

But by definition, there can be no rule about how to correctly interpret a rule.

Indeed, it’s no coincidence that one of the most effective practices of labor unions is the so-called “work to rule” action in which, instead of going on strike, workers instead adhere strictly to every rule, to the degree that no real work can get done.

The overreliance on rules reflects a misunderstanding of how rules really function. It is not what the rule decrees that matters. It is the effect the rule has on the actions and interactions of the people involved—how the rule affects the context of goals, resources, and constraints to which people adjust their behaviors.

The prospect of repeated exposure to interactions with unhappy customers had the effect of making cooperation individually beneficial for the transceiver engineers

Never explain what people do in terms of an irrational mind-set (doing so tells more about the limitations of your analysis than the limitations of the people being analyzed).