Complicating matters: a little complexity could be what your business needs to stay alive - Digital Planet designs Web sites but constantly monitors and uses the latest technologies - Management: Leading Edge

Entrepreneur, Sept, 1996 by Mark Henricks

IN A WORLD where Mosaic rules one minute, then is replaced by Netscape the next and who knows what Internet search tool down the road, it's tempting to try to avoid the confusion by ignoring the latest advances in World Wide Web technology. It's a temptation Joshua Greer regards as deadly.

"The biggest challenge we have in our company is that the technology changes very fast," explains the chairman, CEO and founder of Digital Planet, a 2-year-old, 25-person interactive communications company in Culver City, California. "Throughout a year you're going to have four different product cycles, each of which makes the last outdated."

In a world of such mind-boggling intricacy, Greer regards maintaining his own complexity as a strategic imperative. Five Digital Planet employees are devoted to monitoring Web sites designed by competitors, checking out emergent interactive technologies, and otherwise trying to peer through the whirling cosmos of Internet multimedia communications.

Greer is always ready to shift gears or change directions according to the Byzantine visions his intuition and information present. Digital Planet started out designing Web sites for Hollywood movie promotions. Today, Digital Planet works not only on movie sites but also on interactive online ventures for major newspaper and book publishers and technology corporations.

"It's sort of like saying 'We want to build a car and want the car to do these certain things, but we don't know whether we want the car to have a gasoline or electric engine, or have four wheels or three wheels,'" Greer says. "We constantly have to hedge our bets as to what we can do."

Greer's refusal to streamline and simplify may seem wrongheaded in an era where companies are often urged to focus on core competencies and otherwise simplify themselves. But in the opinions of some organizational experts, he's doing exactly the right thing by not only tolerating but encouraging complexity and complication.

"You need to have many models in your head to identify opportunities and potential pitfalls," says John Geirland, a management consultant in Studio City, California. "Complication is a strategy for doing that."

* INFINITE VARIETY

The idea of the value of complication is formally expressed by something called the law of requisite variety. This dictum states that for an idea or an organization to operate effectively, its level of internal complication must roughly reflect the complexity of the outside world.

Theorists who have applied the law of requisite variety to the business world include Karl E. Weick, a University of Michigan organizational psychologist and author of the seminal The Social Psychology of Organizing (Addison-Wesley). Weick points to a number of successful examples of complication, such as current Asian management practices.

Complication is best known for its use in scenario-based forecasting. Scenario-based forecasting helps planners look at possibilities beyond those that are expected and set up contingency plans for events that may be unlikely but would have a large impact if they happened.

This strategic planning tool gained fame when Royal Dutch Shell used it to prepare for the otherwise unexpected worldwide oil price drops of the early 1980s. Shell planners started with the widely held idea that the price of oil would remain high. Then they developed additional scenarios, including one in which the price of oil would drop.

The Shell planners asked, What would lower oil prices require of our company? Then they presented their scenario to management for consideration in the company's long-range plans. When prices dropped, Shell was well-positioned to profit and gained a lasting reputation for sagacity. But there was no mystery behind Shell's actions, says Geirland: "What they had done was complicate themselves."

* PRACTICAL COMPLICATION

Complicating your business need not be expensive--or even complicated. Injecting variety into your thinking can be a onetime event, or it may take the form of a profound shift in your everyday operations.

One way to complicate things is to hire employees who bring more than one viewpoint to their jobs. Geirland says workers with expertise in more than one discipline--an office manager, say, who produces community theater on the side--naturally take a less simplistic view of things. It doesn't necessarily cost more to hire such dual-skill employees, and it can significantly add to a company's overall complexity.

On a more ad hoc basis, a company can add complexity to a specific project by simply being open to new ways of looking at the problem, says Eva Sonesh-Kedar, an organizational consultant and co-founder with her husband, Ofir, of Management Information Technology Inc., a database software company in Menlo Park, California. For instance, instead of product planners looking internally at their own company's, competitors' and industry's strengths and weaknesses, Sonesh-Kedar suggests they turn their eyes outward, considering sociological, economic and technological trends in the world at large when formulating their plans for new products.