The squads won. The principle behind the success isn't just that decentralization is important. Traditionally, decentralization has been based on the idea that the person dealing directly with a customer or supplier will make a better decision than a senior executive who is more remote from the situation. Instead, complexity theory argues that organizations function like animal colonies in an ecosystem, adapting successfully to changing circumstances based on the spontaneous actions of individuals. So, businesses need to be prepared to fully exploit current core competencies, but they also have to be ready to shift to radically new ways of doing business on little notice.
Tropical jungles sustain more species than temperate zones.
So, as the business climate heats up and becomes more like a jungle, firms need to keep seeding new products and ventures to sustain themselves. St. Paul, Minn., may hardly be the tropics, but it remains a business hot spot as 3M keeps reinventing itself. Post-it notes and Thinsulate were invented there. Complexity theory helps locate patterns and relationships that may not be obvious, including a variety of organizing principles. AMEC used complexity theory to understand what customers wanted and to change its bidding priorities.