You probably use the words 'complex' and 'complicated' interchangeably. Most of us do. Heck, most dictionaries use complex to define complicated and vice versa. There's just one problem: If you're a leader and you treat a complex problem like a complicated problem, you are setting up yourself and your company for failure.

If that sounds like baloney to you, it might be worth taking a look at Rick Nason's eye-opening new book, It's Not Complicated: The Art and Science of Complexity in Business (University of Toronto Press, May 2017). In it, Nason, a finance professor at Dalhousie University's Rowe School of Business, makes a compelling case that understanding the difference between complicated and complex is an imperative for highly effective executives.

Here's the problem:

Leaders, says Nason, tend not to realize that complicated issues are different than complex ones. Thus, they try to address them both in the same way. Want to guess what happens next?

You already know the answer. It's what happens when you try to treat employees as if they were interchangeable robots or when you try to remove a passenger with a ticket from your airplane or when you merge two companies with very different cultures together. The situation deteriorates really fast.

Here's the difference between complicated and complex:

A complicated issue, explains Nason, is one in which "the components can be separated and dealt with in a systematic and logical way that relies on a set of static rules or algorithms." It may be hard to see, but there's a fixed order in something that is merely complicated and that allows you to deal with it in a repeatable manner.

Pumping crude oil from 6 miles below the surface of the Gulf of Mexico is complicated. So is making an electric car and a reusable rocket (just ask Elon Musk). But once you figure out how to do these things, you can keep doing them at will.

On the other hand, a complex issue is one in which you can't get a firm handle on the parts and there are no rules, algorithms, or natural laws. "Things that are complex have no such degree of order, control, or predictability," says Nason. A complex thing is much more challenging--and different--than the sum of its parts, because its parts interact in unpredictable ways.

Managing people is a complex challenge. So is integrating the two merging companies or figuring out how the market will react to a new product or strategy. Maybe you'll get lucky and figure it out once, but whatever you did this time won't generate the same result next time.

Here's the solution:

First, says Nason, understand and appreciate the differences between complexity thinking and complicated thinking. "The two ways of thinking involve different mindsets, different expectations, and different tolerances of ambiguity," he writes. "They involve different attributes and skills. They require dramatically different management techniques."

Second, become comfortable with complexity. "Complexity thinking is not difficult," writes Nason. "It is intuitive, simple, and only requires an open mind and basic common sense...Even something as simple as taking the time to ask whether a given issue is complicated or complex can be incredibly helpful and valuable."

Third, when you are confronted with a complex issue, says Nason, "think manage, not solve." Use scenario planning and be prepared to adjust as you go in a try-learn-adapt process. Set up a skunkworks and give people the time and leeway needed to come up with innovative solutions. Build diversity into the effort--the more different points of view, the better. And manage the effort with a playbook that uses broad principles to guide efforts, instead of rule books that hem people in.

Published on: Jul 19, 2017