Author: Fredmund Malik
_Fredmund Malik_
Reading time: 24 minutes
Synopsis
Strategie des Managements komplexer Systeme (2015) looks at how to lead companies in a world that is more connected and always changing. We show that companies are not like machines. They are living systems that can keep themselves going. We also give you tips on how to manage these systems well.
What you will learn: Ways to manage complex organizations.
For a long time, people believed companies could be managed like machines. They thought that if you planned, controlled, and improved enough, everything would run smoothly. But the world has changed. Markets, technology, and customer needs are changing very fast. What worked yesterday might not work tomorrow.
In this new world, old ways of working do not help anymore. Control and strict plans stop progress. We need a new way to think about management. Companies are not machines. They are living systems.
But what does this mean exactly? Why are living organizations the answer to our increasingly complex world? And how can you manage such systems well? We will answer these questions with clear examples. We will give you practical tips and ways to manage complex organizations.
Blink 1 – To succeed today, companies must see themselves as living organizations.
Imagine you manage a company, but everything is changing. The market changes fast, customers come and go, technology keeps moving, and rules change often. All your tries to lead the company do not work. If you feel this way, you might be thinking too much about numbers. You are not thinking enough about the whole system. In today’s complex world, we need to think about the system!
For a long time, people thought organizations were like machines. They believed if you knew every screw and set every gear right, everything would work well. Sadly, this machine-like thinking only works when things are stable and easy to guess. When things start to move and change fast, you lose control.
A good example is the car industry after the war. In the 1950s and 60s, everything went to plan there. Assembly lines moved on time. Engineers and managers at the top made decisions. Workers below followed them. Everything aimed for working well and being in control. If a problem came up, they studied it. They changed a standard process. Then the system kept running.
But today, this idea does not work. The industry is changing a lot. There is electric mobility, AI software, new competitors, global supply chains, and pandemics. What worked with exact plans before now needs constant changes. If you try to control everything from one center, you will be too slow.
So, the key step is to see organizations as living systems. This means a company does not work like a machine. You cannot just push a button to make everything run. It is more like a living thing, like a garden or a human body.
The good thing is that living systems can react to new demands. They learn and change without a central office telling them to. We will look at this more closely soon. But first, let’s stick to the basics.
The bad thing about living systems is that you cannot control them like machines. You need to understand how their parts work together. Everything is connected, just like in the human body. If you sleep badly, you do not just feel tired. You are also less focused, more easily annoyed, and in a worse mood. For companies, this means decisions do not act alone. They change the whole company. A decision in sales affects production, buying, and team mood. Everything is linked.
Thinking about the system means not just looking at goals and numbers. It means looking at relationships, how things change, and patterns. Instead of asking, ‘How do I reach this goal?’, you ask, ‘How does this decision affect the system I am working in?’ Leadership then means more than giving orders. It means creating the right conditions. These conditions help the whole system stay healthy and grow. Think of a garden: You cannot just tell plants to grow. You can only change the soil, water, and light so they can grow well.
If you think this way, you let go of the idea that you must plan and control everything. Management becomes the art of making things possible. It is not the skill of control. It is about seeing how things naturally change and guiding them. Not stopping them.
Cybernetics shows us how to do this.
Blink 2 – Cybernetics helps us better understand and manage living organizations.
If you want to understand how to lead complex organizations, first understand what keeps them alive. Every living organization, like a company, a hospital, or a sports team, has an inner structure. This structure decides how it handles information, makes choices, and reacts to changes. This structure is not random. It follows certain rules, which are described in Cybernetics. Cybernetics is the study of leading and controlling changing systems.
Cybernetics comes from the Greek word kybernētēs, meaning ‘helmsman’. So, it does not mean control like a machine. It means carefully guiding a living system on a moving sea.
Let’s look at a hospital. It is a good example because everything happens at the same time there. People work in shifts. Information moves across many departments. Decisions must be made fast. Mistakes can cost lives.
The emergency room, for example, is like the nervous system. It takes in information from outside. It reacts right away. It sends signals to the rest of the system. The administration and leadership act like the brain. They process information. They find patterns. They adjust the whole system to its surroundings. And in between, there are many feedback loops: feedback, talks, decisions.
If one of these parts gets out of balance, the whole system feels it. Imagine the emergency room is too busy. Fast: the outside problems overwhelm the whole system. Chaos can happen. Or the lab works slower because it has too few staff. Suddenly, there is a delay in patient care. This means beds stay full longer. The emergency room cannot take new patients.
Cybernetics helps to understand these connections. It sees organizations as systems with many levels. These levels are always in touch with each other. At the lowest level, daily work happens. This is on the wards, in the emergency room, and in the lab. Here, people work, make choices, and take action.
One level higher is coordination. Nursing leaders, surgery planners, or schedulers make sure that tasks do not get in each other’s way. Above this is operational control. This could be the hospital director or the administration staff. Here, resources are shared. Budgets are planned. Problems are solved.
One level higher still is strategic leadership. This includes the board or hospital management. They look outside the hospital. They ask: What new medical trends are there? How are patient expectations changing? What new laws are coming?
If you understand that all these levels form feedback loops, you will see why systems stay strong or fall apart. In our hospital example, this means: If the emergency room is too busy, this news must go quickly and clearly to the wards, administration, and leaders. If leaders react to this, for example, by quickly moving beds or changing planned operations, this decision affects the system back. The situation gets easier. The pressure goes down.
If this feedback is missing, ‘blind spots’ appear. The emergency room keeps struggling with too many patients. But on other wards, beds are empty. The administration makes staff rotas based on old ideas. Meanwhile, the leaders think the problem is already solved. The system loses its ability to manage itself. This is because signals no longer flow.
So, cybernetic thinking means not controlling everything from one center. Instead, it means creating structures where the system can manage itself. This creates an organization that not only works but lives. It thinks, learns, and acts in a flexible way.
Another key part of living systems is their variety.
Blink 3 – We can only meet diverse challenges with diversity ourselves.
A simple system reacts in a way you can guess. If you do A, then B happens. But a complex system often reacts in surprising ways. You do A, and you get C, D, or something totally new. How should you deal with this?
This is where the ‘Law of Required Variety’ comes in. It means that a system needs enough different parts inside itself. Only then can it react well to a complex world. Because if the world changes fast, the system also needs many different ways to react.
Let’s take two fashion companies as an example. Both start a new season at the same time. Company A is strictly organized with a clear chain of command and central control. The design team at the main office decides on all clothing lines, colors, and styles. Every shop sells exactly the same things. Company B works differently. It has small, independent teams in different countries. These teams watch local trends. They are allowed to change individual designs.
Then the market suddenly changes. A new trend appears. Customers want different colors and styles. Company A needs weeks to get decisions through its central office. Company B, however, can react within a few days. A local team had already seen the trend in its country. It changes its designs. It tests them in the shop. Then it reports the results back to the management.
The more different views, ways to decide, and ways to adapt you have in the system, the stronger it becomes against outside surprises. Diversity is not a risk. It is a way to survive.
This is also why strict hierarchies work less and less often. They reduce variety to make things uniform. This might seem neat. But it makes systems weak. A living system needs differences to be stable. Think of an ecosystem with only one type of plant. If the climate changes, it breaks down.
And one more thing: In complex systems, there is no full information. You can never gather all the facts before you decide. So, management is no longer a game of knowledge. It is a process of discovery.
Let’s look at a city council planning a new traffic system. Instead of planning everything in detail beforehand, they test a pilot project with temporary bike lanes. After a few weeks, they check what happened. Where is traffic getting stuck? Where is it flowing better? How do people react? The system gives feedback. Based on this, the project is improved.
Understanding complexity means learning to be humble. You cannot plan the future. But you can create conditions where it can develop well.
We have now learned a few ways to manage complex systems. What else is there?
Blink 4 – You cannot control complexity. You can only guide it in the right ways.
How do you lead a system that is always changing?
A first way is: direction instead of control. In complex systems, you cannot give exact orders. But you can provide guidance. Think of a film set. The director sets the goal, tells the story, and creates the mood. But how the scene is finally played is up to the actors. They use their skills, experience, and gut feeling. Leadership should work in the same way: clear goals, a shared purpose, but room for people to make their own choices.
Let’s imagine a food company that makes and sells fresh meals in several countries. Instead of central rules for exact dishes, there are only three main guidelines. These are high product quality, being cost-effective, and being sustainable. Regional teams can decide everything else themselves. This could look like this:
In Mexico, the team seasons its dishes hotter than other teams. This is because local people are used to it. The team in Scandinavia creates new packaging for its meals. In Germany, an app is made for ordering food in canteens. This way, each team serves the special needs of its local market. Not every idea has to be a success. It is only important that teams adapt quickly. This happens if they go too far from the company’s three main guidelines. This brings us to the next point.
In complex systems, mistakes are not faults. They are signals. If a team misses its deadlines, it does not always mean they are bad at their job. It is a sign of too much work, conflicting goals, or a lack of coordination. Instead of looking for someone to blame, ask: ‘What is the system trying to tell us?’ People who think this way turn problems into chances to learn. This helps the system become stronger.
We have already talked about why variety is important for strength. So, the rule is: encourage variety! But do it in a focused way. Teams with people from different areas are a good example. When people from sales, development, and customer service work on a problem together, they find solutions. No single department could have found these alone. One team member sees the market side. Another sees the technical limits. A third sees the customer’s view. This creates a more complete picture. Decisions become stronger because they consider many different realities.
Changing jobs within the company can also help make a system more lively. When staff regularly work in other areas for a few months, they better understand the whole picture. They also bring new ideas to places where work is routine.
Finally, open feedback sessions are like the system’s sensors. When teams regularly think together, openly and honestly, they spot early signs. They see where stress is building or energy is lost. For example, a weekly ‘resonance round’ is good for this. In it, everyone briefly says what is going well, what is slowing them down, and what they have noticed. No long talks, just honest feedback. The result: many small changes in direction before big problems start.
Blink 5 – Complex companies need a deeper purpose, flexible structures, and the courage to admit they don’t know everything.
If you want to handle complexity well over time, using single methods is not enough. The system itself must be built to stay alive. Here are three keys to success.
The first key is purpose. In a complex organization, you cannot keep people motivated with rules, orders, or controls. They will only stay committed if they understand why the whole thing is good. When everyone knows why the company exists and what their own work adds, guidance happens by itself. Then, it is not rules that hold the system together. It is a shared goal that means something to everyone.
For example, a software company could have a clear mission. Its mission could be to make people’s daily lives easier with digital technology. Decisions at all levels can then be checked against this idea. Purpose replaces rules and strict plans.
The second key is a flexible internal structure. Many successful companies organize themselves into small, independent units. These are like cells in the body. Each unit has clear tasks. It can grow, divide, or combine again.
Let’s look at an energy company as an example. The company focuses on renewable energy technology. It has divided its organization into expert teams. One team is for wind power, one for solar, and one for new storage technology. Each team works mostly on its own. It tests new ideas and makes fast decisions.
At the same time, the teams are in close contact. Findings from solar research go into wind projects. The storage team helps to make energy flow steady. The central office only steps in when coordination is needed or resources must be shared again. This way, the parts of the system stay flexible and connected at the same time. Each part works on its own, but for the good of the whole.
The third key is about something often missed. How do people stay able to act when they don’t know what will happen tomorrow? Uncertainty creates pressure, doubt, and sometimes even fear. But this is exactly what decides if a system stays stable or stops itself.
If a company only reacts to uncertainty with more planning, more control, and more meetings, it only gets a false sense of security. Real stability comes when employees know that unanswered questions are a normal part of their work.
Let’s use the energy company example again. The storage team needs to develop new storage technology. But nobody knows which solution will win in the market. Instead of waiting for a decision from above, the team starts to create different scenarios. It shares what it thinks, openly names risks, and talks about what is still unclear. The leader listens without judging. They only ask: ‘What do we need to get the next bit of clarity?’ This makes uncertainty somewhat normal and less scary.
It is about creating a place where people can openly say: ‘I don’t know the answer right now, but I am ready to find it out.’ This feeling of safety is a key base for any organization that can learn.
Conclusion
Organizations are not machines that you can control and fix. They are living systems that you should understand. Instead of focusing on control and planning, we need structures that can manage themselves. Only then can a complex system keep working well. This is true even when its surroundings are always changing.
Complexity is not a threat. It is the natural state of modern organizations. Dealing with it needs variety, a willingness to learn, and open communication without fear. Leaders must make it possible for people to work together smoothly. They must also ensure that knowledge is shared. And that different parts of the company help each other grow.
Ultimately, this is the main point of managing living organizations. It is not about wanting to control the system. It is about keeping it alive.
Source: https://www.blinkist.com/https://www.blinkist.com/de/books/strategie-des-managements-komplexer-systeme-de