"To the man with a hammer, everything looks like a nail."
The environment and the challenges it poses might be complex, but the man only has a hammer. And so he goes about, trying to treat every problem like a nail, and fails eventually.
Why does this happen?
Well, cybernetics and control systems theory has a good answer for this. And it has to do with the complexity of the environment and the variety of responses (tools) you have in order to face the challenges it throws at you.
Now, this might get a bit technical, but trust me, there's a payoff waiting for you at the end.
In cybernetics, variety in a system is simply the number of different possible states within the system. For example, a thermostat or a light switch only has two states, ON and OFF, while a die roll has a variety of 6 as it can assume a total of 6 different states.
As systems evolve, this variety grows exponentially, with the system getting more and more complex to handle more and more problem-solution sets to deal with the external environment. Our processes develop in a way where at the start they only deal with the central problem and gradually get more complex to accommodate more and more edge cases.
In 1958, W. Ross Ashby, a psychiatrist and pioneer in cybernetics proposed a law that explained the relation between the complexity of the organism/system and the complexity of the environment it was dealing with.
"When the variety or complexity of the environment exceeds the capacity of a system (natural or artificial) the environment will dominate and ultimately destroy that system. In order to deal properly with the diversity of problems the world throws at you, you need to have a repertoire of responses which are (at least) as nuanced as the problems you face."
Also known as the First Law of Cybernetics, the crux of Ashby's Law of Requisite Variety is that to deal well with a complex environment, a system should be equally or more complex than the environment it is in.
Thought in a different way, the only way you can control your destiny is to be more flexible than your environment.
As John Dabell writes, "The system/person with the most flexibility of behaviour will control the system. The more flexible you are when you hit a challenge the more likely you will control your life and get what you want. In other words, it’s considered a good strategy to generate more choices in a given situation."
A simple example of this law in effect is to consider two football teams: one with strategies capable enough of dealing with only two situations within the play, versus another with a strategy capable enough of dealing with 50 different in-game situations.
According to Ashby's Law, the latter team with more variety will be able to handle more situations well and will win in most situations. Though the losing team's defence may have practised and developed many systems for defending, the other team's attacking strategies will prove too varied and result in them scoring more goals. The losing team will not have the requisite variety to adapt to its environment, i.e., the other team.
Another example would be to think about the difference between what you learn in school and what you have to deal with in the real world. If your school education didn't equip you with the requisite variety of tools needed to respond to the variety of challenges in the real world, you won't be able to adapt to it, unless you equip yourself to face those challenges in real-time.
How does Ashby's Law matter in management and operations?
To understand this, let's take the example of two scenarios:
Setting a process for a customer service desk vs. setting processes for managing a large project with many stakeholders.
A service desk's environment consists of handling customer calls and providing the required support. It's a process that can be easily standardized as it requires low variety to deal with a low variety environment. Sure, there might be more call traffic on some days versus others, but as long as the system has the necessary slack built into it, in terms of customer service professionals on the bench that can be called to service the increased traffic, the process mostly works without too many hiccups.
Contrast that with a project management gig that has way more variables to deal with and works on a much longer timeline — something that can subject the system to much more environmental changes and variety that a project manager will have to deal with for successful completion of the project.
Besides project duration, a project involves many ill-defined technical tasks that have to be executed while coordinating with different stakeholders. A service request, on the other hand, consists of one or a small number of well-defined tasks.
A project also involves many stakeholder groups, with diverse interests and opinions. In comparison, a service request typically has considerably fewer stakeholders, with few conflicting opinions or interests.
To build a simple, low-variety process for project management like you do for a customer service desk is not only difficult, it's ill-advised, simply because project managers are subjected to a greater variety of disturbances than service desks.
But organizations that are focused on efficiency will still try to standardize processes to regulate this variety, which can lead to a lot of bureaucracy and sluggishness as the organization grows in size and scale.
Now, standardisation does work well when the variety the organisation is exposed to is known and limited, for e.g., standardized production of the same goods or services. But it does not work well when the variety is unknown or unlimited, like in the case of a startup adapting to a fast-changing market, in search of product-market fit.
When you standardize something, you reduce the levels of variety available, in favour of efficiency. However, if the environment the company is operating in demands more variety of responses than the company is capable of handling, the company will soon be ill-adapted to the market and will face obsolescence.
Hence, teams and organisations that face a lot of unknown variables and changes must develop systems that have the necessary slack and flexibility to allow them to respond to external stimuli by absorbing new information and developing new strategies and services to counter them.
This is also why as organizations grow, they turn more rigid and slow and aren't able to adapt as quickly to the environment.
They have regulated too much variety out of the system via efficient processes. The result is you get bureaucratic PMs who respond to unique requests and challenges with cookie-cutter textbook solutions that don't solve the problem well.
To see how the concepts of slack (redundancy) and flexibility can be applied on an individual level, read this essay.