Author: Fredmund Malik
Fredmund Malik
Reading time: 24 minutes
Synopsis
Strategie des Managements komplexer Systeme (2015) explores how to manage organizations in a world that is more and more connected and changes quickly. We show that companies are not like machines. Instead, they are living systems that can keep themselves going. We also give you tips on how to manage these systems well.
What’s in it for you: Strategies for managing complex organizations.
For a long time, people thought organizations could be run like machines. They believed if you just planned, controlled, and improved enough, everything would work well. But the world has changed. Markets, technology, and customer needs are changing very fast. What worked yesterday is now old-fashioned.
In this new world, old ways of working do not help. Too much control and strict plans stop progress. We need a new way to understand management. Companies are not machines. They are living systems.
But what does this mean? Why are living organizations the answer to our more complex world? And how can you manage these systems well? We will answer these questions with clear examples. We will also give you practical tips and strategies for managing complex organizations.
Blink 1 – To succeed today, companies must see themselves as living organizations.
Imagine you manage a company. But everything keeps changing. The market moves fast. Customers come and go. Technology improves, and rules change often. All your efforts to control the company do not work. If you feel this way, you might be thinking too much about numbers. You might not be thinking enough about the whole system. Our complex world needs systemic thinking!
For a long time, people thought organizations were like machines. They thought if you knew every screw and adjusted every gear, everything would work well. But this mechanical way of thinking only works when things are stable and easy to predict. When things start to move and change fast, you lose control.
The car industry after the war is a good example. In the 1950s and 60s, everything went as planned. Assembly lines worked on time. Engineers and managers high up made decisions. People lower down just followed them. Everything aimed for efficiency and control. If a problem came up, they studied it. They changed a standard process. Then the system kept going.
But today, this idea does not work. The industry is changing a lot. We have electric cars, AI software, new rivals, global supply chains, and pandemics. What worked with exact planning before now needs constant change. If you try to control everything from one place, you will simply be too slow.
So, the key step is to see organizations as living systems. This means a company does not work like a machine where you just push a button to make things go. It is more like a living thing, such as a garden or a human body.
The good thing is: Living systems can react to new demands. They learn and adapt. A central office does not need to tell them how to change. We will look at this in more detail soon. But let’s first stick to the basics.
The bad thing about living systems: You cannot control them like machines. Instead, you must understand how their parts work together. Everything is connected. Think of the human body. If you sleep badly, you feel weaker. You also find it harder to focus. You might be more easily annoyed and less happy. For companies, this means decisions do not act alone. They change the whole system. A decision in sales affects production. It affects buying. It affects the team’s mood. Everything is linked.
Systemic thinking means you look at more than just goals and numbers. You look at relationships, how things move, 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 is no longer about giving orders. It is about creating the right conditions. These conditions help the whole system stay healthy and grow. Think of a garden. You cannot order plants to grow. You can only make sure they have good soil, water, and light. Then they will grow well.
If you think this way, you let go of trying to plan and control everything. Management becomes an art of making things possible. It is not about using control methods. It is about seeing and guiding natural changes. You help them instead of stopping them.
Cybernetics shows us how to do this.
Blink 2 – Cybernetics helps us understand and manage living organizations better.
If you want to understand how to manage complex organizations, first learn what keeps them alive. Every living organization has an inner structure. This is true for a company, a hospital, or a sports team. This structure decides how it handles information, makes choices, and reacts to changes. This structure is not random. It follows certain rules. These rules are described in Cybernetics. This is the study of control and regulation in systems that are always changing.
The word Cybernetics comes from the Greek word kybernētēs. This means ‘steersman’. So, it does not mean control like a machine. It means guiding a living system on a moving sea.
Let’s look at a hospital. It is a good example because many things happen at the same time. People work in shifts. Information goes through many departments. Decisions must be made fast. Mistakes can cost lives.
The emergency room, for example, is like the nervous system. It takes in signals from outside. It reacts at once and sends signals to the rest of the system. The admin team and leaders are like the brain. They process information. They see patterns and help the whole system fit its environment. And everywhere in between, there are many feedback loops: messages, talks, choices.
If one part of the system is not working right, the whole system feels it. Imagine the emergency room is too busy. Suddenly, too many outside signals overload the whole body. Chaos might start. Or the lab works too slowly because it doesn’t have enough staff. Then patients have to wait for results. This means beds stay full longer. The emergency room cannot take new patients.
Cybernetics helps us understand these links. It describes 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. People work, decide, and act there.
One level up, there is coordination. The head nurse, the surgery planner, or the scheduling team make sure tasks do not get in each other’s way. Above this is the daily management. This includes the hospital director or the admin staff. They give out resources, plan money, and solve problems.
Even higher is the strategic management. This might be the board or the hospital management. They look at what is happening outside the hospital. What new medical trends are there? How are patient needs changing? What new laws are coming?
If you understand that all these levels form feedback loops, you will see why systems stay stable or fall apart. In our hospital example, this means: If the emergency room is too busy, this information must quickly go to the wards, admin, and management. If management reacts, for example, by moving beds or delaying planned operations, this decision then affects the system. The situation gets calmer, and the pressure goes down.
If these messages are missing, problems are not seen. The emergency room keeps struggling with too many patients. But at the same time, beds on other wards are empty. The admin team makes staff plans based on old ideas. Meanwhile, management believes the problem is already fixed. The system loses its ability to steer itself because signals stop flowing.
So, thinking cybernetically means: Do not try to control everything from one center. Instead, create structures where the system can manage itself. This creates an organization that does not just work. It 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 varied changes with variety.
A simple system acts in a way you can expect. If you do A, then B happens. But a complex system often acts in surprising ways. You do A, and you get C, D, or something totally new. How should you deal with this?
Here we find the Law of Requisite Variety. Only a system with enough inner variety can react well to a complex environment. If the world outside 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 very strict and controlled from the center. The design team at the main office decides on all clothing lines, colors, and styles. Every shop sells exactly the same items. Company B works differently. It has small, independent teams in different countries. These teams watch local trends. They can change individual designs.
Then the market suddenly changes. A new trend appears, and customers want different colors and styles. Company A needs weeks to get decisions through its central office. Company B, however, can react in just a few days. A local team has already seen the trend in its country. It changes its designs. It tests them in the shop. Then it reports the results back to management.
The more different views, ways to make decisions, and ways to adapt you have in the system, the stronger it will be against surprises from outside. Variety 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 everything the same. This might look tidy, but it makes systems weak. A living system needs differences to be strong. Think of an ecosystem with only one type of plant. If the weather changes, it will fail.
Also, in complex systems, you never have all the information. You can never collect all the facts before you make a decision. So, management is no longer about knowing everything. It is about discovering new things.
Let’s look at a city council planning a new traffic system. Instead of calculating everything in detail beforehand, they try a test project. They set up temporary bike lanes. After a few weeks, they check what happened. Where does traffic build up? Where does it flow 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 grow well.
We have already learned a few management strategies for complex systems. What other ones are there?
Blink 4 – You cannot control complexity. You can only guide it in the right direction.
How do you lead a system that is always changing?
A first strategy is: direction instead of control. In complex systems, you cannot give exact orders. But you can give guidance. Think of a film set. The director sets the goal. They tell the story and create the mood. But how the scene is finally played is up to the actors. They use their skills, experience, and intuition. Leadership should work in the same way. It needs clear goals and a shared purpose. But it also needs room for individual decisions.
Let’s imagine a food company. It makes and sells fresh meals in several countries. Instead of central rules for every dish, there are only three main guidelines. These are: high product quality, economic efficiency, and sustainability. Regional teams can design everything else themselves. This could look like this:
In Mexico, the team makes its dishes spicier than other teams. This is because local people like it that way. The team in Scandinavia creates new packaging for its meals. In Germany, an app for ordering food in canteens is being developed. In this way, each team serves the special needs of its local market. Not every idea has to be a success. The important thing is that teams adapt quickly if they go against 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 can show they are overworked. Or they have goals that do not match. Or they lack coordination. Instead of finding who is to blame, ask: ‘What is the system telling us?’ If you think like this, you turn problems into chances to learn. This makes the system stronger.
We have already talked about why variety is important for strength. So, remember: Encourage variety! But do it with a purpose. Teams with members 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 fuller picture. Decisions become stronger because they consider many different realities.
Job rotation 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. If teams regularly talk together, openly and honestly, they will see early where problems start or energy is lost. For example, a weekly ‘feedback round’ can work well. In this, everyone briefly says what is going well. They also share what is holding them back and what they have noticed. No long talks, just honest feedback. The result: many small changes to direction before big problems start.
Blink 5 – Complex companies need a deeper purpose, flexible structures, and the courage to accept what they don’t know.
If you want to manage complexity for a long time, using just a few 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 motivate people for long with just rules, orders, or controls. They will only stay committed if they understand why the whole thing matters. When everyone knows why the company exists and what their own work adds, guidance comes naturally. Then, rules do not hold the system together. Instead, a shared goal that means something to everyone does.
For example, a software company could state its clear mission. This might be to make people’s daily lives easier with digital technology. Then, decisions at all levels can be measured against this idea. The purpose takes the place of 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, split, or combine in new ways.
Let’s look at an energy company as an example. The company specializes in green energy technology. It has divided its organization into expert teams. One team is for wind power. One is for solar power. One is for new storage technologies. Each team works mostly on its own. It tests new ideas and makes quick decisions.
At the same time, the teams also work closely together. What they learn from solar research helps wind projects. The storage team helps keep energy flowing steadily. The main office only steps in if teams need to coordinate. Or if resources need to be shared again. This way, the parts of the system stay flexible. They are also connected. Each part acts alone, but works for the good of the whole.
The third key is about something often missed. How can people keep working when they don’t know what will happen tomorrow? Uncertainty creates stress, doubt, and sometimes fear. But this is where it is decided if a system stays strong or blocks itself.
If a company reacts to uncertainty with only more planning, more control, and more meetings, it creates a false sense of safety. True strength comes when employees know that open questions are a normal part of their work.
Let’s take the energy company again as an example. 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 think about different possibilities. It shares its ideas. It openly names risks. It 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 feel more 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.’ This feeling of being safe to speak is a key part of any organization that can learn.
Conclusion
Organizations are not machines that you can master and fix. They are living systems that you should understand. Instead of focusing on control and planning, we need structures that can steer themselves. This is the only way a complex system can keep working, even when its environment is always changing.
Complexity is not a threat. It is the natural state of modern organizations. To handle it, you need variety, a willingness to learn, and open, fearless communication. Leaders need to make sure teamwork runs smoothly. They must also ensure that knowledge is shared and that the different parts of the company help each other grow.
Ultimately, this is the main point of managing living organizations. It is not about trying to control the system. It is about keeping it alive and dynamic.
Source: https://www.blinkist.com/https://www.blinkist.com/de/books/strategie-des-managements-komplexer-systeme-de