An article entitled “It’s Complicated” appeared recently in The Economist magazine and, of course, caught my eye. What especially captured my attention was the concluding paragraph that included this profound statement:
“The biggest threat to business almost always comes from too much complexity rather than too much simplicity.”* [Emphasis added.]
On 14-15 November 2013, hundreds of management enthusiasts of all kinds met in Vienna, Austria, to discuss the complexity of today’s business environment and what managers and executives can do to survive and thrive it the midst of it.
There is no doubt that managers and executives are being confronted with increasing complexity. The article says:
“Businesspeople are confronted by more of everything than ever before: this year’s Global Electronics Forum in Shanghai featured 22,000 new products. They have to make decisions at a faster pace: roughly 60% of Apple’s revenues are generated by products that are less than four years old. Therefore, they have a more uncertain future: Harvard Business School’s William Sahlman warns young entrepreneurs about ‘the big eraser in the sky’ that can come down at any moment and ‘wipe out all their cleverness and effort.’”*
Simplicity out of complexity
Interestingly, in the midst of all of this, an apparent dichotomy has emerged.
“Organisations built for this new world may look complex and unwieldy but they have an inner logic and powers of self-organisation. Global networks such as Kiva, a crowdfunding website, and CrisisCommons, which musters tech volunteers in disasters like the Philippines typhoon, can mobilise thousands of people with little top-down direction. Accelerate, a call-centre company, employs 20,000 people but has no call centres: they work from home.”
How is it possible for complex, loosely-knit organizations such as Kiva, CrisisCommons and Accelerate to function efficiently and effectively in meeting the needs of their clients and customers?
The answer appears to be found in recognizing that the old “command-and-control” mechanisms of a fast-passing age can no longer be applied.
The failure of command-and-control
The genius of Taiichi Ohno at Toyota Motor Company was that of involving people in building the processes by which they conducted business and interacted. By inviting them to participate in building something—rather than attempting to exercise “command-and-control”—he was able to take that which is complex and manage it successfully based on inherent simplicity.
The concept of “inherent simplicity” simply assumes that the complex a system (or situation, or problem) appears, the simpler the answer must be to be effective.
Look closely at how relatively self-organizing networks like KIva, CrisisCommons, Accelerate or even (to a great degree) companies like Google or Toyota work and you will discover, I think, that they have avoided “being blinded by complexity” by concentrating “on the few simple things that can give their business focus and their workers direction,”* just as the article’s author suggests.
Concentrating on the few simple things…focus
More and more, as we work with small to mid-sized business enterprises, we are discovering that they are being overwhelmed by the complexities of their own organizations and the increasing complexities they perceive in their supply chains.
As a result, it is increasingly necessary for us to help them apply tools that bring them back to a focus on the very few simple things that will provide trustworthy direction and will guide their actions toward that which will be effective in bringing immediate return on investment (ROI).
Focus becomes everything.
Our guidance in the application of focusing steps has helped our clients increase Throughput while holding the line on operating expenses. This means improvements in cash flow and better profits.
In many cases, no new technologies are involved in making these gains.
Our experience concurs with the findings of the article in The Economist:
The biggest threat to businesses and their supply chains almost always comes from too much complexity rather than from too much simplicity.
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* "It's Complicated." The Economist 9 Nov. 2013: 68. Print.