I know a renowned school, with over half a century of history, that is going through a series of difficulties. It has lost a large part of its students in recent years, has seen competition increase drastically, has had to lay off many people and, consequently, has had its marketing budget reduced — which has contributed even more to this cycle of uninterrupted decline.

The question that the executives of this school have been asking themselves over time, without being able to react effectively, is: how to reverse this situation and return to growth?

However, the great difficulty that these executives are really encountering is learning to play in a new arena: that of complex systems. And why is it so difficult? Because they are intellectually unarmed, prepared only to act in simple systems, playing a game that belongs to the past.

To make the difference between the systems clear, here are some examples:

• Simple System – there is a completely predictable cause-and-effect relationship, with unique and obvious solutions to certain problems. Example: a clock is a simple system; if a part breaks, it is easily replaced, and we also know that, at some point, the battery will run out.
• Complex System – there are multiple parallel cause-and-effect relationships, with totally unexpected behaviors. Example: the launch of a new product and its acceptance by the public.

As you can see, companies that are still embedded in simple systems are so rare that, as I write this article, none come to mind.

The problem, in my view, is that, instead of executives adopting a growth mindset and opening themselves to a new way of operating and designing their marketing and sales strategies, a good portion still insist on:

• incessantly seeking to simplify what cannot be simplified;
• artificially constructing incorrect cause-and-effect relationships;
• not adopting systemic thinking, focusing only on parts instead of the whole;
• reinforcing old mental models that support structures doomed to failure.
  

First and foremost, these people need to look at the complex system with acceptance and understand that they are embedded in an arena whose main characteristic is unpredictability. Viewing this variable as the new rule of the game is difficult because it’s part of our essence (and our primitive brain) to seek constant stability and security.

There’s a brilliant quote from Kahneman about this:

“An unbiased appreciation of uncertainty is the foundation of rationality—but that’s not what companies and people want.”

In short, if you intend to embrace the unpredictability of the complex system, be prepared for:

• more complexity → more indeterminacy → more difficulty in making sense of things → more difficulty in acting;
• looking at the whole and understanding that it is greater than the sum of its parts, that is, it is not possible to understand the system by simply analyzing its elements;
• adding new mental models to existing ones—only in this way will permanent and lasting changes be achieved;
• being flexible and building organizational structures capable of dealing with unpredictability.
  

Good luck! 

This article was inspired by the lectures of the brilliant professor Marcos Telles.