There is always more gained from sharing knowledge than from hoarding it. And there’s plenty to go around now that we are generating 2.5 quintillion bytes of data every day. Yet there are still some game-changing unknowns:
- How can I compete when it’s no longer clear who I’m competing against?
- When did my customer start knowing more about me than I know about them?
- How can I find the talent I need to solve the challenges that don’t exist – yet?
- When will my data stop reporting the past and start predicting the future?
What is impeding our ability to answer these questions? Believe it or not, the culprit is complexity.
Why simplify now?
Information is fertile ground for new ideas and innovation – the more we have, the more we generate. It’s in our human nature to tinker, refine, challenge, and modify our environment. However, it can be difficult to let go of older practices and mindsets at the same time. As a consequence of this aversion, many of us prefer to add new methods and ideas to already instituted processes – whether or not they fit or make sense. Unfortunately, this is creating a convoluted environment of processes that are redundant, do not add value, and get in the way of real progress.
In the digital economy, leaders cannot become complacent with complexity. As people continue to exhibit increasingly digitally native lifestyles, employees and consumers expect companies to be powered by a digital core – bringing greater efficiency, speed, and more-intuitive ways of working. Because these changes are done within the context of a new business model, route to market, or offering, it is reasonable to fund simplification of core processes when revenue is associated with a new market opportunity.
Simplification calls for genuine soul-searching, vision, and planning
It’s not unusual for the C-suite to get on board with the concept of simplification and start writing a check to support it. But just like anything else, it requires effort and clear leadership – not just money. Yes, at the end of the day, simplification saves money, makes operations easier, and creates a more agile enterprise. However, none of this is possible unless senior leaders explain with clarity to the entire business network why simplification is relevant now and in the future.
First, leaders need to ask themselves what they envision for the future of their company. What are the ultimate benefits? Is it faster time to market, being more agile and responsive to customers, or attracting the best talent, or capturing market share? How does that change improve operations? And more important, how does it impact the customer experience?
When the future state is mapped out, a framework must be developed to measure progress in terms of achievement and impact. This is one of those steps where many enterprises fail. Although there’s always the temptation to simplify everything blindly, simpler is not necessarily better for every case. No matter what, simplification must deliver greater value to your organization or customers – leaving organizations responsible for quantifiably proving whether the effort is living up to its promises.
Anything can be simplified – especially processes that never change
When it comes to prioritizing areas where complexity is inhibiting the enterprise, every process should be on the table – whether it’s in the network, on the plant floor, or within general business activities. Something as straightforward as your annual strategic planning or approval process may be holding your company back.
Now, you may think such processes are set in stone and fully optimized. I urge you: Don’t remain surrender to that notion. Through design thinking and technology, you can unite transactional and analytical processing into a unified view to reduce the number of steps in any process – even those that rarely – and for some, never — change. In the end, you’ll soon find that certain processes can become more responsive to customers and business conditions while achieving significant outcomes.
This is where digital economy comes into play. While some companies are on the verge of digital transformation, they are also figuring which elements need to be simplified to meet the needs and expectations of today’s customer. By taking the best practices that exist today, you can prioritize any area of the enterprise that would deliver value when simplified.
There is a line between value-drive simplification and oversimplification
Sometimes, customers are willing to pay for a little bit of complexity at a premium. And in other cases, they are not. Nevertheless, simplification efforts shouldn’t blind leaders from breakthrough situations where the business is crossing a boundary of opportunity.
Take Uber, for example. This is one service that truly personifies how simplification can make all fronts better. Unfortunately, that is only the case for certain use cases. If you try to schedule a Uber car to pick you up after your flight lands at 7:00 p.m. on a Tuesday night, you’re not going to get a car. Why? The ease Uber is famous for does not allow consumers to preschedule a car. Although consumers are most likely willing to pay a premium for this service, Uber chose an enterprise configuration strategy that is focused on the band model.
It’s all a balance between knowing which market opportunities make sense, what degree of simplification and complexity is needed to succeed, and whether the cost and effort outweigh the ultimate benefit.
The next time you see a new market opportunity sitting before you, ask yourself: Can my company move quickly enough to capture it and adapt core processes when needed? If not, you may want to check out the white paper Leading Your Organisation Out of the Complexity Wilderness.