10. How CEOs Cope with Complexity

Abstract thinking is core in and the first instrument for dealing with complexity. What matters is what type of abstract thinking is applied. Authentic abstract thinking is about the willingness to see and acknowledge new possibilities, to see new connections, and to question assumptions. Authenticity here is used in the existentialist way, which is about the willingness, the courage to see new opportunities and to make choices. This authentic abstract thinking is opposed to the abstract thinking used in artificial intelligence and machine learning. Mathematical abstract thinking, especially in economics and business, is reductionism, identifying a dominant causal relation, identifying how act to be successful. Authentic abstract thinking if different from out-of-the box thinking, it is an intellectual activity, although with CEOs it often has more the nature of slow intuition as explicit analytics. Because authentic abstract thinking is about questioning assumptions held by others and thus questioning the status quo, the tendency to do so also depends on the personality of the CEO and his social context. The art of abstract thinking is to move an organization from its conceptual past into its conceptual future (§ 11.4). Related to personality is that those CEO dealing successfully with complexity have developed themselves a high load of cognitive complexity on which is based a high capability of integrative thinking. They master multiple, often conflicting concepts and models and are able to switch perspectives and viewpoints. Authors like O’Toole and Martin deserve more appreciation when they explain that successful CEOs “look for simplicity beyond complexity” and “wade into complexity.” Martin’s description of CEOs dealing successfully with complexity as mastering the art (but it is as related to personality) of integrative thinking is consistent with research dating back to the sixties on characteristics in thinking of political leaders. This denies the main stream popular management books that emphasize simplicity. They need to do so in an institutional environment that is hostile to questioning the waning assumptions underlying those institutions, but seeing the new opportunities created by the declining costs of information.

Complexity leadership as coined by Uhl-Bien & Marion takes issue with the conventional concepts of leadership, especially the popular transactional leadership. Building on the concept of complexity of Herbert Simon, dating back to the sixties, complexity leadership is about creating conditions in the organization in order that members of the organization themselves can observe unexpected and deep changes in the environment and initiate a response to it to maintain the accomplishment of the mission of the organization, while maintaining its integrity.