What Can Leaders Learn from Cybernetics? - Toward a Strategic Framework for Managing Complexity and Risk in Socio-Technical Systems

How can leaders cope with the seemingly inexorable increase in complexity of their world? Based on the cybernetic “law of requisite variety,” formulated almost fifty years ago by W. R. Ashby, we propose a pragmatic framework that might help strategic decision makers to face and manage complexity and risk in organizational, political, and social systems. The law of requisite variety is a fundamental hypothesis in the general theory of regulation and defines an upper limit to the controlling ability of a system, based on its “variety” (complexity) level. The strategic framework discussed here assumes that complexity breeds systemic risks and suggests three mutually complementary approaches to managing complexity at a strategic level: 1) where possible, reduce complexity in the system to be controlled; 2) effectively manage residual complexity; and 3) increase complexity of the controlling system. Each approach is then discussed, and practical examples provided.