As complexity of business grows, conventional management theories and practices seem to become increasingly useless. A new book from Boston Consulting Group outlines a better approach to managing complexity. The approach is called smart simplicity, and it hinges on six simple rules. Guess what? All six rules come down to just one: make cooperation happen.
How do companies create value and achieve competitive advantage in an age of increasing complexity? That’s the question authors of “Six Simple Rules” Yves Morieux and Peter Tollman try to answer. For them, the winners of the new much more complex context will be the companies that can transform complexity into competitive advantage. For that to occur, they provide six managerial rules that go for companies, managers and employees with less-direct control, fewer systems, more flexibility and more autonomy. If read carfully, all six are about increasing cooperation at organizations, but three of them talk about it more directly.
Rule number two is “Look for Cooperation”. Authors ask managers to find out how cooperation happens and who makes it happen; identify the “integrators”, the people and units who bring others together and drive processes; and eliminate layers and rules and give these integrators the power, authority, and incentives to make the entire task succeed.
“Six Simple Rules” differentiate between Cooperation and Collaboration. For them collaboration is about teamwork and good interpersonal relationships, which could even lead to the avoidance of real cooperation. Cooperation is a demanding activity that involves taking individual risks because individual contributions to the joint output can’t be directly measured. People only cooperate when, by cooperating, they can win as individuals. “Remove managerial positions if they don’t influence people to cooperate”, authors advise.
Rule number four: “Increase Reciprocity” ( to make cooperation happen). Instead of relying on dedicated interfaces, coordination structures, or procedures, authors recommend managers to increase reciprocity, which ensures that people have a mutual interest in cooperation (as their success depends on each other). “Reciprocity makes people cooperate more autonomously and, therefore, makes organizational life simpler.”
And finally, rule number six: “Reward Those Who Cooperate”. If people think cooperation is risky, make it riskier not to cooperate. Most organizations punish failure. But that can make people risk averse. The challenge is to encourage risk taking that improves performance. For Yves Morieux and Peter Tollman the solution is encouraging cooperation. “People take personal risk, and risk becomes fruitful for the company, when they know they can count on others to compensate, relay, absorb, or provide a safety net in case things go wrong”, they consider.