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Relationship Between Complexity & Business Agility

Instructor: Natalie Boyd

Natalie is a teacher and holds an MA in English Education and is in progress on her PhD in psychology.

Agility allows companies to respond to changes quickly. But how does it relate to organizational complexity? In this lesson, we'll examine factors that contribute to complexity, including how agility and complexity interact.

Agility

Soo-Lin is the owner of a company that designs apps for people trying to learn new skills. She's noticed that things are always changing. Customers' wants change from day to day, and tech industry trends change from day to day, too. How can she deal with all this change?

Agility is an organization's capacity to respond quickly to changes in industry and/or customer demands. For example, if customers change from wanting a single app that teaches many things to many apps that each teach only one thing in-depth, Soo-Lin's company must meet that demand. This is their agility.

To help Soo-Lin understand agility better, let's take a look at business complexity and its relationship with agility.

Business Complexity

Making her company agile seems like a good solution to Soo-Lin, but she's a little skeptical about her ability to do it. It seems like a company with only three employees and one or two products would find it easier to be agile than a company like hers, which employs hundreds of people and has hundreds of products.

When Soo-Lin thinks about the number of employees or company products, she's beginning to think about business complexity, which is about how complicated or intricate an organization is. For example, Soo-Lin's company has hundreds of employees and is more complex than a company with just two or three. More employees lead to more complications and more intricate communication.

There are many things that can make a company complex. They include:

  • The number of employees, products, or services. As we've already seen, Soo-Lin's company has a lot of employees and makes a number of apps. The more people, products, and services a company has to juggle, the more complex the organization becomes.
  • The number and type of company locations. If Soo-Lin's company has only one office for everyone, it is easier to manage than if it has half a dozen headquarters around the world or if every employee works from home. Thus, the more locations a company has, the more complex it becomes.
  • The interrelationships between team members. If employees within Soo-Lin's company only interact with a few other people, it is simpler than if everyone interacts with dozens of employees every day. Think of relationships as spider webs: the more strands that connect people to other people, the more complex the organization becomes.
  • The duration and complexity of individual projects. Not only can a company be complex, so can its projects. Let's say Soo-Lin wants to develop a new app. If the app only requires a few people to develop it and will only take a few weeks, that's a relatively simple project. In contrast, if the new app requires dozens of people and years to develop, it becomes a much more complex project. The more complex and time-consuming projects a company has, the more complex it becomes.

Agility & Complexity

Thinking about her company's complexity makes Soo-Lin feel overwhelmed. How can they ever be agile with so much complexity?

The relationship between an organizations complexity and agility is complicated. On one hand, the less complex an organization is, the more agile it can be. Think about it: if a company is small with relatively simple projects, it can change directions much faster and be more responsive to change than a company that has many employees and locations and very complicated projects. In fact, some scholars measure a company's agility by measuring its complexity. To them, the more complex an organization is, the less agile it is.

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