Drivers of Business Complexity & Simplicity
Wednesday, 14 November, 2012 Leave a comment
Drivers of Complexity
This is a brief but by no means exhaustive summary of some of the drivers for increasing complexity in a business. These include but are not limited to:
- Increasing customer choice through product proliferation
- Pressure for diversification of products & customers
- Many engineers, accountants and technologists (who love to work in complexity)
- People creating complexity to secure their jobs & positions
- Processes that people have been modifying for years without regard for the impact these changes have on the output
- Information departments / systems seeking or delivering ever increasing detail just because they can!
- Complex planning systems (or no planning systems)
- Increasing compliance requirements
- Belief that rigour equates to volume (e.g. of reports) when it comes to analysing, justifying and planning.
The drivers for simplifying a business have in the past generally only been exploited when the business is under intense pressure to improve performance i.e. when it is in trouble, as often occurs during economic downturns. It is a shame these drivers only appear in times of trouble rather than growth, for if they were a focus during good times then more businesses would perform well.
Drivers for Simplicity
A business with a focus on doing things more simply shows:
- Managers seeking cost removal and higher profits (or productivity) before growth for growth’s sake
- The expectation that strategic and business planning should deliver clear priorities rather than excessive detail and little focus
- Managers wanting easier or faster decision-making
- Fighting against information overload that stifles decision-making
- Making it easier for people to do their work well (i.e. owners, managers and staff who just want to “cut through the crap” and get good work done more easily)
- Lazy, intelligent people (including NetGen or GenY managers)
- Easier & more effective delegation
- A lack of skilled people, forcing smart managers to consider how to simplify the relevant parts of their business so the work can be done by lesser-qualified staff
- Owners and managers who are dissatisfied with the trends in working hours and looking for balance and quality of life
- Simpler supply chains
- Simpler ways to groom people for succession
This extract is from an excellent document [Reveal Your Hidden Profits…] written by my colleague in Australia, Dr Ian Dover. If you would like a copy please get in touch [email@example.com or firstname.lastname@example.org].
Whether you do or not is entirely your call but, irrespective, THE starting point on the road to a more profitable, effective and resilient business is right here: