Systems are complex to govern, difficult to maximize its potential, extremely difficult to adapt (do the rights things) in terms of innovation and transformation.
The performance of the system depends on how well the parts fit together, not how well they perform individually and the ‘whole’ system exhibits emergent properties that are not to be found in its parts.
The performance of the system is not the sum of the performance of its parts but rather determined by the efficacy of its parts and specifically the efficacy of the parts relationship to realize system purpose.
Any organization for it to be viable it must be capable of dealing with the complexity of its environment. Organizations are not able to create the same amount of complexity internally as their environment expose: only variety absorbs variety (Beer) therefore to cope with complexity, the variety the organization can produce has to be amplified towards the environment at the least possible costs and the variety that environment exposes has to be attenuated towards the organization.
Systemic complexity requires effective governance framework that that not only deals with complexity but ensure that the necessary governance functions are in place to ensure long term viability and sustainability. These necessary functions need to continuously strive to achieve system balance; doing the mix of right things that lead to effective innovation, transformation and maximizing system potential.