Complexity of System Management, Governance and Adaptation

Generally systems are difficult to manage due their complexity and rapidity changing environment.

Adaptation, innovation and transformation are extremely difficult to manage and realize; ‘doing the rights things’. This difficulty is mainly associated with failing to understand complexity and the variety propagated by systems and too much reliance on single managers or super CEO. Many fail to exploit the cognitive intelligence available to them to do the rights things.

Typical example of expecting too much from single person to execute major transformation relates to HP: HP Carly Fiorina may be an excellent CEO but it does not imply the CEO has the ability to carry-out major transformation and successfully introduce industry paradigm. Same can be said about Steve Jobs: very successful with iPhone, tablets ect..; but it does not imply that Steve Jobs at Nokia would have made a difference.

Nokia ( ) further example adaptation failure: in this case adaptation issue was not related to innovation but more related to fact that their whole governance model was based on a crumbling paradigm impacting their resilience. They failed to understand that innovation in a crumbling paradigm can only lead to failures.

Within the European Union specifically Euro member country there are countries with exceptional performance such as Germany while Italy exceptional low performance. Is this caused by the Euro or is it mainly due to poor system governance that limits potential and limited resilience.

Why innovation fails?

“If you had to guess, what percentage of ideas for ground-breaking new products or services would you say are marketplace flops, or just never see the light of day? 50%? 80%? According to Mark Payne, it’s closer to 90%”

Why transformation fails?

The reported failure rate of large-scale change programs has hovered around 70 percent over many years.

Accenture:  According to Gartner, “almost 90% of transformation projects miss their mark.”

According to research by McKinsey & Company, about 70% of all changes in all organizations fail.

After almost two decades of intense change from corporate reorganizations, new software systems such as ERP , and quality-improvement projects (six sigma) , the failure rate remains at 70%. Project failure not only has impact on cost but can actually result in major decline.

When changes fail, people often grow cynical impacting motivation and become afraid of their current and future security.