Source: Stacey RD. Strategic management and organisational dynamics: the challenge of complexity. 3rd ed. Harlow: Prentice Hall, 2002.
A useful map for navigating your way into the concepts and field of complexity is “The Stacey Matrix”. It can help to guide you by offering a method to select the appropriate management actions in a complex adaptive system based on the degree of certainty and level of agreement on the issue in question.
The art of management and leadership is having an array of approaches and being aware of when to use which approach. Ralph Stacey proposed a matrix to help with this art by identifying management decisions on two dimensions: the degree of certainty and the level of agreement.
- Choosing between management or leadership approaches for a specific issue or decision.
- Making sense of an array of decisions (or agenda for a group).
- Communicating with others why a particular approach is appropriate.
- When innovations and creative alternatives are needed, this matrix can be used to deliberately try to increase the uncertainty and disagreement to nudge the system to the edge of chaos.
|Close to Certainty:||Issues or decisions are close to certainty when cause and effect linkages can be determined. This is usually the case when a very similar issue or decision has been made in the past. One can then extrapolate from past experience to predict the outcome of an action with a good degree of certainty.|
|Far from Certainty:||At the other end of the certainty continuum are decisions that are far from certainty. These situations are often unique or at least new to the decision makers. The cause and effect linkages are not clear. Extrapolating from past experience is not a good method to predict outcomes in the far from certainty range.|
|Agreement:||The vertical axis measures the level of agreement about an issue or decision within the group, team or organization. As you would expect, the management or leadership function varies depending on the level of agreement surrounding an issue.|
There is a large area on this diagram which lies between the anarchy region and regions of the traditional management approaches. Stacey calls this large centre region the zone of complexity – others call it the edge of chaos. In the zone of complexity the traditional management approaches are not very effective but it is the zone of high creativity, innovation, and breaking with the past to create new modes of operating.
- Technical rational decision making
Much of the management literature and theory addresses the region on the matrix which is close to certainty and close to agreement. In this region, we use techniques which gather data from the past and use that to predict the future. We plan specific paths of action to achieve outcomes and monitor the actual behavior by comparing it against these plans. This is sound management practice for issues and decisions that fall in this area. The goal is to repeat what works to improve efficiency and effectiveness.
- Political decision making
Some issues have a great deal of certainty about how outcomes are created but high levels of disagreement about which outcomes are desirable. Neither plans nor shared mission are likely to work in this context. Instead, politics become more important. Coalition building, negotiation, and compromise are used to create the organization’s agenda and direction.
- Judgemental decision making
Some issues have a high level of agreement but not much certainty as to the cause and effect linkages to create the desired outcomes. In these cases, monitoring against a preset plan will not work. A strong sense of shared mission or vision may substitute for a plan in these cases. Comparisons are made not against plans but against the mission and vision for the organization. In this region, the goal is to head towards an agreed upon future state even though the specific paths cannot be predetermined.
Situations where there are very high levels of uncertainty and disagreement, often result in a breakdown or anarchy. The traditional methods of planning, visioning, and negotiation are insufficient in these contexts. One personal strategy to deal with such contexts is avoidance -avoiding the issues that are highly uncertain and where there is little disagreement. While this may be a protective strategy in the short run, it is disastrous in the long run. This is a region that organizations should avoid as much as possible.
- Complexity zone
There is a large area on this diagram which lies between the anarchy region and regions of the traditional management approaches. Stacey calls this large center region the zone of complexity – others call it the edge of chaos. In the zone of complexity the traditional management approaches are not very effective but it is the zone of high creativity, innovation, and breaking with the past to create new modes of operating. In management we spend much of our time teaching how to manage in areas (1), (2) and (3). In these regions, we can present models which extrapolate from past experience and thereby can be used to forecast the future. This is the hallmark of good science in the traditional mode. When we teach approaches, techniques and even merely a perspective in area (4) the models seem ‘soft’ and the lack of prediction seems problematic. We need to reinforce that managers and leaders of organizations need to have a diversity of approaches to deal with the diversity of contexts. Stacey’s matrix honours what we already have learned but also urges us to move with more confidence into some of the areas which we understand intuitively but are hesitant to apply because they do not appear as ‘solid.’
Schulich School of Business,