If the concerns I hear from the people I coach and train are any indication, complexity is rapidly becoming a major issue in the workplace as well as for the well-being of employees at all levels. Ask yourself whether things have become significantly more complex in the past several years in your organization. Is it adding to your cost of doing business? Is it threatening your efforts to maintain quality? Is it causing more stress for everyone?
Here are a few relevant quotes on the subject:
Simplicity is the glory of expression – Walt Whitman
Nothing is true but that which is simple – Goethe
Everything should be made as simple as possible, but no simpler – Albert Einstein
Simplicity is the ultimate sophistication – Leonardo da Vinci
Less is more – Mies van der Rohe
Interdependence
We are more interdependent than ever before. On 20 March 2010 a volcano in Iceland erupted which bore a name that many people could not pronounce (Eyjafjallajökull). By volcano standards it was not a very large eruption and it was far away from most population areas. But it created a disruption of air traffic which was second only to that caused by World War II. And how many other things that air traffic were affected?
We are all interconnected. Nothing occurs in isolation from all the things with which it has a connection. So nothing is immune from being impacted by all the factors in its surroundings. Consider the popular concept of the six degrees of separation. Is it any wonder that diseases which develop in one part of the world, rapidly become global issues.
Sources of complexity
In business we see the following factors as potential sources of complexity:
- Pressure to grow the business
- Expansion of the product range
- Increased variety of the customer base
- Customer demand to customize products
- Regulatory requirements in various jurisdictions
- The impact of working in different cultures
- Ambiguity
- Flux
Impact
Complexity does not impact every business equally. The high-tech sector is likely to be more impacted as are global businesses and those whose products rapidly evolve. A conservative estimate suggests that complexity increases the fixed costs of a manufacturing business by at least 20% and in some cases easily 40% or more. Calculating the figure is not simple because it requires absolute transparency of cost information. The cost in employee frustration and burnout could easily raise that figure.
Controlling Complexity
There are two categories of things which can be done to bring complexity under control. One is to remove it to the extent possible through processes of simplification. The other is to reconfigure the complexity in ways that make it work for you. Here are some specific examples:
- Discontinue any product which does not bring an acceptable level of profit
- Stop serving customers who are not profitable
- Shift customers away from custom solutions to standardized products
- Select and concentrate on important customer segments
- When you launch a new product, discontinue an old
- Reconfigure the production process: eliminate stock pools and concentrate activities to achieve economies of scale and scope
- Automate business processes where doing so is economical
- Simplify and streamline administrative procedures for yourself and those below you
- Improve commonality of parts and product modularity
- Delegate decision-making in your organization so that fewer people need to be involved in approvals.
Embrace Complexity
A 2010 global study by IBM (see link below) suggests that we can make complexity work for us by embracing what they call business agility, the ability to respond quickly to change while simultaneously serving as a force for change. Leaders must be comfortable with higher levels of ambiguity and experimentation in order to promote creativity in their units. They must reinvent customer relationships and make getting connected with customers a top priority. Operational dexterity means redesigning operating strategies for ultimate speed and flexibility. Complexity can only be brought under control if everyone from the board room to the assembly line is committed to fighting wasteful and unnecessary practices.
Read more about complexity
An Internet search will produce lots of material about complexity. These links might be good places to start if you wish to read more:
IBM - Capitalizing on Complexity
Prof. Pieter Klaas Jagersma - Managing Business Complexity
I would love to hear your experiences on the subject. Drop me a comment.
-Herb