“The ability to simplify means to eliminate the unnecessary so that the necessary may speak.” — Hans Hoffman, German-American abstract expressionist painter.
The modern business world is becoming more complex, competitive, and unpredictable by the day. Those of us at the leadership level must remain constantly aware of this reality, because the decisions we make affect the lives and careers of everyone on our team, and they may ultimately determine the fate of the entire organization. Occasionally, one must stop, take a good look around, breathe, and attempt to do what we can to reduce the complexity we face.
While you may have no control over issues associated with overarching trends like globalization, rapid technological change, or national economic policy, you can certainly attempt to influence and reduce complexity within your organization. Indeed, as Brazilian businessman Carlos Ghosn observes, “The role of leadership is to transform the complex situation into small pieces and prioritize them.” Ghosn’s quote reflects his extensive experience in the field. Educated in Lebanon and France, he joined the tire manufacturer Michelin & Cie immediately after college. In 1985, as a 30-year-old wunderkind, he took over Michelin’s failing $300 million operation in South America. By emphasizing diversity as a core business asset and simplifying the organization’s business processes, he returned the operation to profitability by 1987.
Currently, Ghosn serves as Chairman and CEO of Japanese automaker Nissan, French automaker Renault, and the Renault-Nissan Alliance. Though he’s faced criticism for his demanding and confrontational leadership style, the fact remains that he has succeeded in transforming a series of complex multinational business ventures into simpler, profitable operations.
In large part, organizations grow overly complex because leaders rarely let go of their old responsibilities when they take on new ones—even when they’ve become unprofitable, overcomplicated money pits. The European Business Review estimates that the 200 largest Fortune 500 companies alone suffer from “value-destructive complexity,” costing them a total of $237 billion a year. Aside from an unwillingness to abandon excess responsibilities and unworkable initiatives, leaders often cause unnecessary complexity when they:
• Overthink business situations.
• Over-engineer products and services.
• Lose focus on what truly matters.
• Avoid handling the organization’s important issues.
• Repeatedly reinvent the wheel from a process standpoint.
• Aimlessly chase unclear goals.
• Fear that eliminating complexity means eliminating jobs.
Instead of crashing and burning against the wall of overcomplexity, hit the brakes, take your sledgehammer out of the trunk, and start breaking down the wall so you can move forward. Simplify with these simple tips.
1. Apply simple rules of thumb to business situations instead of building elaborate decision-making and process flow frameworks. This has worked wonders for companies like Cisco and Intel, which quickly identify their process bottlenecks, create a few simple guidelines for handling them, and put them into profitable action. Take a look at your existing process frameworks, and you may discover that rather than having dozens of similar processes to deal with, you actually have one core process that applies to dozens of situations. Needless to say, cleaning them up accelerates business processes wonderfully, resulting not only in greater simplicity but also greater profits.
2. Eliminate unnecessary positions. When you apply Tip #1, you may discover you no longer need so many people to do the job. While no one likes to let people go, it may be necessary for the organization’s survival. After all, if the company fails, all employees lose their jobs. If possible, try to decrease headcount through attrition, retirement, and lateral promotions first.
3. Include a sunset clause for all projects and initiatives. Make the end of an endeavor part of its natural life cycle. Plan for that ending, and when it comes time to shut down, do so—unless there’s some overriding reason to continue.
4. Triage items that don’t fit organizational objectives. If an initiative or endeavor fails to move the company forward, then why bother with it? Cut it loose and move on.
5. Reduce your biggest remaining complexity issues. Make a list of the biggest problems your group has to deal with, and then start looking for ways to break them down into more manageable pieces. Develop specific simplicity rules (see Tip #1), implement them against a “proof of concept” issue, and then apply what you’ve learned to the other items on your list.
6. Lead by example. Demonstrate your personal commitment to simplifying your business processes, and the rest of your team will be more likely to follow. If you can get buy-in from other team leads or higher echelon leaders as well, then so much the better.
In 2012’s What to Do When There’s Too Much to Do, I introduced my mantra of “reduce, reduce, reduce.” It works as well with excess complexity as it does with most other aspects of business. Keep this in the forefront of your mind, because it’s human nature to overcomplicate most situations; we all want a hand in the solution, and no one wants to tell anyone else no. Well, you have a choice: you can keep building tottering towers of business complexity, doomed to eventual failure, or you can pare them down to stable, simple structures that will stand indefinitely. How have you done this within your organization? I’d love to hear your success stories!