When Complexity becomes a Stumbling Block for Growth

When Complexity becomes a Stumbling Block for Growth

Inspiration

From Complexity to Simplicity: Unleash Your Organisation's Potential” by Simon Collinson & Melvin Jay, 2012, 308 pages


Thoughts

Keep it simple (smarty-pants); the KIS(S) acronym is probably familiar to most of us. We have thought it to ourselves or maybe even said it on occasions when people or solutions we encounter leave us frustrated with how hard they are to understand or operate. We may also have been on the receiving end of the comment when we have failed to see that our presentation of matters, our way of working or our organization has become overly difficult to understand, navigate in and has difficulty in responding to changing circumstances.

Complexity is prevalent in many organizations in many industries. However, organizations are not born to be complex. It is something that happens along the way and seemingly all too often without checks and balances to make sure that complexity is not being generated more or less for its own sake. Simon Collinson & Melvin Jay have written a book dealing with the reasons why complexity creeps up on us in our organization. Complexity is not bad in itself. However excessive, non-productive complexity is bad. We need to be ever vigilant that we keep complexity to what is needed to seize opportunities to serve markets and clients, and stop complexity that is developing into costly hindrances to our development.


Complexity Levels and Business Consequences

Where does our complexity come from? External factors such as markets, customers, partners, competitors, regulations and new technologies certain bring complexity to any organization. As long as the complexity in our company is introduced in direct response to the changing demands of our environment and complexity is consistently removed when no longer needed, our complexity is likely to remain on the productive level.

However, if we start to focus on how internal processes are run and build complexity into these, we may be on our way towards complexity overload and paralysis. Many of us have probably at one time or another experienced that internal processes, well-meaning as they are, have prevented us from speedy, appropriate actions in response to changes in our environment. We may even have experienced that internal processes have taken precedence over processes directed outward.

While at some stage in our development, these internal processes were meaningful, we may have kept them on and even elaborated on them without any connection to the environment we operate in. Our increasing internal complexity misdirects our efforts and will cause cost us more than we bring in.

It is important to remember here that while we want to reduce internally directed complexities, we need to have a productive externally directed complexity. Oversimplifying our business means that we may not have the means and methods to engage with our environment and grow.


Sources of Unwanted Complexity

While the majority of the complexity we need to accommodate comes from external sources like markets, customers, partners, competitors and regulations, what are the sources of internal complexity – the complexity we need to keep in check?

People
I hope this won’t come as a surprise, but the main creator of complexity is us, the people in the organization. Our different backgrounds and personalities, the way we interact with other people and the different roles we have. All of which are subject to constant change. What is more, most people have the drive to contribute, to tinker and make things better. However, most of us, employee or manager, don't contemplate the complexity consequences of our tinkering and thus don't understand when well enough should be left alone.

Organization
The way our organization is designed can be an enormous help or it can be a complexity machine that kills our agility and responsiveness to our external environment. Does any of this sound familiar: unclear roles, unclear structures, inter-team/departmental conflicts, many levels of management, many people reporting to one manager, many concurrent matrixes, unclear decision paths. What often happens is that the organization gets stuck in trying to navigate its internal structures and fails to devote sufficient focus and energy on external matters.

Strategy
We expect strategy to tell us where we need to go in a clear and easy to understand manner, perhaps as a short set of simple rules to guide activities. However, often strategy becomes an over-thought and under-communicated muddle with too much focus on internal challenges and too little focus on the external environment. Some organizations have several simultaneous, but not necessarily coordinated, strategies. Other organizations make so frequent changes to their strategies that no-one is really sure what the current strategy is. Lack of clear and consistent strategy brings frustrations and not results.

Process
If you have ever done process analysis, chances are more than good that you have come across a good deal of inefficiencies and unnecessary complexity. When taking the broader, organization-wide perspective, it is quite common to find process duplication across different teams/departments/divisions. Many processes have also been tinkered with and over-engineered for tasks that are actually pretty straight forward. Of course there are also all the special cases that occur once in a blue moon and deal with a very, very limited set of input- but none the less a special process has been put in place to deal with these special cases. Decluttering processes in number, variants and process steps will lighten the internal complexity load a good deal.

Product
Over time an organization may grow a somewhat bloated portfolio of products and services. This may happen if the organization does not focus on retiring products and services. It may happen if the organization creates many variants to suit many different markets and customer segments. Each product/service and each variant adds complexity to the value chain. However, the profits an organization makes tend to come for the largest part from a very small number of products and variants. These should be the products and services that the organization focuses on while trimming away as much of the rest as feasible.


Takeaways

Life in overly complex, internally oriented organizations tends to be a lot more frustrating than life in organizations that keep internal matters as simple as feasible and instead focus on dealing with external complexity: the customers, the partners, the competition and regulation. Externally oriented organizations also tend to find it easier to thrive in our ever-changing world, because they tend to be more nimble and can respond faster to customers, partners, competition and regulations.

In order to put our organization in the best possible position to grow and thrive, we need to be ever vigilant against inward oriented complexities resulting from our product and services catalog, our processes, our strategy, our organization and the people that are part of our organization. Whenever, we want to add to internal areas, we need to ask ourselves the questions: how will this help us in our externally oriented tasks and what is the simplest way we can achieve what we need. Finally, we must be prepared to prune internal activities that no longer provide value.

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