The risks of organizational complexity and how to be an anti-complex leader: An interview with Rend Stephan, author and CEO of ClicData

In this podcast, Heidrick & Struggles’ Adam Howe speaks to Rend Stephan, CEO of ClicData, a global data analytics and business intelligence company; the author of the book Anti-Complex: The Leadership Mindset for Ultimate Performance; and the founding partner of endCX, helping leaders build anti-complex business models. Stephan shares why complexity can be a trap for organizations and argues that being anti-complex is the most vital leadership capability.

Some key questions answered in this podcast include:

• (2:27) What do you see as the main challenges that an increase in complexity brings to organizations?
• (4:49) As we start to think about those major challenges brought by complexity, how do we start to get at some of the root causes? How do we start to address these major organizational challenges?
• (8:53) You mentioned our infinitely complex modern world, and I'm curious: how do you think the complexity challenge has evolved in the digital age? Does more data and more tools mean more complexity or does that create opportunity for more simplicity?
• (15:58) Which specific leadership capabilities you think will be most important for general success actually over the next three to five years?

Below is a full transcript of the episode, which has been edited for clarity.

Welcome to the Heidrick & Struggles Leadership Podcast. Heidrick is the premier global provider of senior-level executive search and leadership consulting services. Diversity and inclusion, leading through tumultuous times, and building thriving teams and organizations are among the core issues we talk with leaders about every day, including in our podcasts. Thank you for joining the conversation.

Adam Howe: Hi, I'm Adam Howe. I lead Heidrick & Struggles’ work in organizational simplicity as a part of Heidrick Consulting. In today's podcast, I'm speaking to Rend Stephan, CEO of ClicData, a global data analytics and business intelligence company, and the author of the book Anti-Complex: The Leadership Mindset for Ultimate Performance. Besides his CEO role, Rend is also the founding partner of endCX, which helps leaders build anti-complex business models. 

Rend, welcome, and thank you for taking the time to speak with us today.

Rend Stephan: My pleasure. Thank you for inviting me.

Adam Howe: Why have you decided to focus on the topic of organizational complexity? 

Rend Stephan: Adam, complexity is a fascinating topic. It is critical to our achievements since we need to add some complexity to the world and not stay on the simplistic side of things. Yet with all our good intentions, complexity can rapidly become our enemy, with dramatic consequences on performance, leadership, and resilience. In my career, I have dealt with a wide range of clients’ growth, reorganizations, and transformations, and I've seen why they succeed and, most importantly, why they often fail to fully deliver. I’ve also seen that despite the most advanced approaches and methodologies and setups and despite the involvement of highly competent leaders, managers, and experts, this question about why we see repeated non-performance despite all the resources, talents, and good intentions [has remained, and it] has led me to discover that nearly all non-performers, however, you define performance, is caused by one thing. Yes, just one thing: complexity. Or, more specifically getting trapped in complexity, as most organizations do—trapped in complexity that inhibits performance, leadership, and ultimately positive change. This is how anti-complex came about. It’s an approach focused on changing leadership mindsets toward relentlessly fighting complexity and seeking simplicity. 

Adam Howe: Really interesting. And just picking up on the piece around organizations and leaders failing, what do you see as the main challenges that an increase in complexity brings to organizations?

Rend Stephan: Well, most things across our organizations and ecosystems are far more complex than they need to be. And complexity brings three main challenges, three enormous challenges. The first one is non-performance. At a very basic level, complexity drains your energy and that of your organization, and as we dedicate more and more energy and resources to managing complexity, there is less available energy and fewer resources for what really matters. That leads to non-performance, that is, performance that is below its potential. Non-performance is by itself unacceptable, but even if you manage somehow to survive in such a state, it makes you weaker. Being weak reduces your ability to withstand shocks—think of the immune system, right? Hence the second challenge: fragility, with a high propensity to collapse. This is often overlooked. Complex strategies, organizations, operations, and transformations do collapse—complex governance and management do collapse. Nearly all complex models collapse more often than you predict and also when you most need them to perform. So, that would be the second big challenge. The third main challenge is blindness, which, for me, I think, is the most important. It’s the blindness to the complexity we create ourselves and continues to encourage and feed. We tend to surrender and accept complexity as inevitable. We let it invade our lives to epic proportions. We adapt to living with it and all its harmful consequences, continuing to believe we can manage it, only to invest more and more energy to no avail. So, in essence, complexity renders organizations and leaders nonperforming and weak, fragile, and prone to collapse, with widespread blindness to identifying the real culprit and doing something about it. I call that the complexity trap and most of us live in it. It’s not a very pretty picture. That's why I think a major reset is way, way overdue.

Adam Howe: So, as we start to think about those major challenges brought by complexity, how do we start to get at some of the root causes? How do we start to address these major organizational challenges?

Rend Stephan: I think we need to be specific when we tell people to be aware. Let me reiterate first that complexity is primarily created by us. That's extremely important. So, solving the complexity problem will not be achieved with a better complexity management framework or a better simplification framework. Solving the complexity problem will only be achieved with a radical mindset shift of leaders in their day-to-day decisions and actions. So, to your question, how do we begin addressing the complexity trap problem, the answer is by becoming aware of its main causes, which are three in my opinion.

The first cause is what I call the complexity fallacy. Read the news, listen to experts, you'll hear how infinitely complex our modern world is. We often react to that belief with additional complexity—complex plans, complex strategies, and complex initiatives. It is a vicious circle, feeding the beast instead of fighting it, but true leaders think and act otherwise. Here's what former GE CEO Jack Welch once said. He said that insecure managers create complexity; real leaders do not clutter. That's a very, very powerful thing to remember. So, our lesson number one should be: do no harm. Do not add complexity to the world. Let's start with that. The second root cause is what I call the incremental paradox. You see incremental improvements are generally warranted and justified. However, with each change, we create exponential complexity. And since we proceed with small steps, we don't see the complexity spreading like a disease, trapping us, our teams, and our organizations. Imagine you live in a beautiful house with your family. Your family is expanding, so it's time to upgrade the kitchen, then build the study extension, then install a new bathroom, and so on. Then one day you drive past new homes in your neighborhood and you start noticing their design: bigger rooms, better layout, larger garden, integrated wiring, plumbing, heating, no patched-on solutions, no overdevelopment. And it occurs to you that these homes are much better than yours, despite all the improvements made across the years. That's the incremental paradox, where a series of otherwise warranted and rational improvements—I insist they are warranted and rational when you actually make these decisions—lead to a complex suboptimal outcome. That's the second root cause. And, of course, there's a third one and the main cause, leaders choosing to overly rely on the complex frameworks and models of many experts, internal and external, disseminating them, most importantly disseminating them blindly and with little questioning across their organizations. I've seen these what I call surrendering leaders, when they concede their most important leadership prerogative to the experts around them, you know. They just do what expert X says, or just apply the framework that was designed by expert Y. In doing so, they resign themselves to merely managing complexity, with dramatic consequences on their organizational performance and on the leadership development. What I'm trying to say here is that experts typically add complexity, not because they want to add complexity but because they know they can find the complex solutions. It’s up to leaders to find the non-complex solutions. They are who I call the complexity warriors.

Adam Howe: You mentioned our infinitely complex modern world, and I'm curious—your two hats, running a data intelligence business and being a subject matter expert on organizational simplicity—how do you think the complexity challenge has evolved in the digital age? And more specifically, does more data and more tools mean more complexity or does that create opportunity for more simplicity?

Rend Stephan: Adam, that is an excellent question. It's not news that data is now everywhere; it's an integral part of our professional and personal lives. This can be a blessing, although most of the time it is a blessing in disguise. The problem with data is that it can rapidly become overwhelming, hindering insight instead of enabling it. You can see the parallel with our earlier discussion on complexity. The proper use of data could enable strong innovation, faster decision making and economic growth, but it can rapidly trap everyone in an ocean of complexity, inhibiting development and performance. I'm sure you remember the movie The Mask, where an ancient mask amplifies the core personality traits of whomever wears it. We can see Jim Carrey perform becoming a powerful yet gentle monster, whereas you know, other gangsters using the mask become profoundly mean and dangerous. It is the same with data: it will amplify all the negatives of those not adopting the anti-complex mindset, creating more complexity, more energy drain, non-performance, and fragility. But it would also amplify the complexity warrior’s ability to leverage its superb potential for higher performance and resilience. I believe the widespread uses of data will accentuate the contrast between true anti-complex leaders and the rest. So, if we want to generate tremendous value from the digital economy, we cannot simply create more and more data and with more and more complex methods to manage it. Instead, we need to make organizations data-centric, putting insightful data, not noise, at the center of every decision. 

Adam Howe: Yes, that makes a lot of sense, and I think this insightful data versus noise is the key point here for me. I do want to probe a little bit more on this anti-complex leaders piece though, because I find this really fascinating. I'm curious as to what you think organizations need to do to their culture to reduce complexity.

Rend Stephan: Absolutely. As we have seen, becoming aware of the roots, the root causes of complexity, is a very important first step. It opens the door to questioning the status quo in order to uproot complexity from across the organization, most often through a series of system redesigns, not through incremental improvements or complexity management initiatives. It takes a lot of courage to do so. E. F. Schumacher once said that any intelligent fool can make things bigger, more complex, but it takes a touch of genius and a lot of courage to move in the opposite direction. Not an easy journey, but a really worthy journey. And on such a journey of making the organization anti-complex, I suggest leaders adopt and use three very effective weapons—I'm going to talk about two of them today. They are ideas that could be controversial to many. The first idea is linked to the economies of scale, which, simply put, is about doing things more efficiently with increasing size. However, the question is, do we apply this concept properly? And is bigger always better? And what I've found is that most of the time, the answer to both questions is no. We forget that scale often generates enormous complexity and our thinking models frequently make the systemic error of not properly factoring in the cost of negative impact of such complexity. That is why, in reality, the supposed scale effects rapidly vanish way faster than we think. Everybody talks about the economies of scale mantra, which is true, but it gets rapidly overwhelmed by the complexity it creates itself. So what I advise leaders is to do what I call the economies of small, which is reversing the “bigger is better” default position and believing that smaller, non-complex systems have an inherent advantage most of the time, until proven otherwise. So start small and then figure out if really, really you need scale. That's the first weapon. Sometimes it's controversial, but it works most of the time. The second idea is related to focus. As you mentioned, we are all familiar with diversification as a way to optimize performance. Indeed, some argue it allows you to reduce risks, some others argue it allows you to pursue many opportunities, and hence not miss out. I really suggest that we drop that belief, seriously. Because, you know, when we set up to achieve something, advice like “don't put all your eggs in one basket” is not good advice. Why? Because resources are finite—money, attention, energy—we only have limited amounts, and diversification also builds exponential complexity in trying to juggle the multiple options available, most of the time leading you to non-performance. I would suggest people explore the massive body of work in support of concentration. You will find very few arguments supporting diversification as a general rule, and anti-complex is fully aligned with that position. I call it the advantage of focus: make sure you focus, let go of the things that are not important. And letting go means letting go of things that could be attractive, and that's the most difficult thing in order to focus on one or two things that really matter.

Adam Howe: That’s super interesting and it goes back to some of the basic psychological and human needs that we have, scarcity and the fear of missing out—FOMO. And now we're talking to leaders about JOMO, which is the joy of missing out and actually being OK with stepping away from an idea, a product, a strategy, a process, or a meeting. 

As we wrap up our time together today, I'd be curious as to which specific leadership capabilities you think will be most important for general success actually over the next three to five years. 

Rend Stephan: It will come as no surprise that in my view the most important leadership goal is to ensure that your team, tribe, organization, ecosystem, and society are not trapped in complexity and that leaders do not endlessly endure its damaging effects on organizational performance, but also on their own engagement and well-being. For me, that's number one. Because leading them on anti-complex perspectives is the most transformative and the most genuinely caring leadership act you can accomplish. Otherwise, how can you ask people to follow you and offer their minds and souls and time and skills and creativity? How can you ask people to commit to the vision you are advocating, knowing very well that they will be constantly fighting, consciously or unconsciously, by choice or by surrender, irrelevant and painful complexity battles along the way? How can you lead people into the complexity trap, depleting their most valuable resources to little avail? Well, my view is that you shouldn't, because the most critical leadership capability is becoming a complexity warrior. You cannot be the leader you want to be if you do not make the battle against complexity your primary objective, period. I mean, that's a very short answer from my side. To illustrate that, I also want to advise all leaders not to fall for what I call the descriptive leadership frameworks that may be positioned implicitly or explicitly as prescriptive leadership tools—do this or that and you will be a great leader. Why? Because the truth that is successful leaders display a wide variety of leadership characteristics and we find successful leaders at the opposite ends of any leadership dimension you pick, and anything in between. Let me give some examples: some great leaders are charismatic, others are low key, some are outspoken, others are soft-spoken, some are creative, others are less original, some are more EQ than IQ, others are more IQ than EQ. And it goes on, you know? What I'm trying to say is that you can take these characteristics, use them as descriptive and think about what actually is good for you, for your style, but the only prescriptive leadership characteristic is being anti-complexity. Be the complexity warrior we talked about. Use the weapons we talked about, make sure you take your team, your organization on a non-complex path. That's the only thing we need you to focus on.

Adam Howe: I love the simplicity of that message. So, Rend, we’re at the end of our time together today. I really appreciate you making the time to come and share some of your insights from your experience and the new book, and we look forward to talking to you soon.

Rend Stephan: Thank you very much, Adam. I really enjoyed it, thanks a lot.

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About the interviewer

Adam Howe (ahowe@heidrick.com) is a partner in Heidrick & Struggles’ New York and London offices. He leads Heidrick Consulting’s Organizational Simplicity offering and co-leads the Digital Transformation offering in Europe & Africa.