Overview of Findings
- Complexity is having a negative impact on the performance of most big organisations, but very few companies are successfully tackling this growing problem.
- Human behaviours are the root cause of complexity in big business; we all contribute (unknowingly) to the level of complexity in work.
- To change the behaviours that create complexity a new style of leadership is needed, driven by leaders who actively inspire, challenge coach and reward their people for removing complexity. We call this “Leading Simplicity.”
Excess complexity is slowing you down, demotivating your employees, and destroying your profits. In 2011, the Global Simplicity Index studied complexity in the 200 biggest companies in the world and proved that, on average, 10% of annual profits were being wasted through excess complexity.
So it is not surprising that leaders of large organisations now see complexity as one of the biggest challenges they face.
In tangible terms, the complexity of your organisation is visible as the ‘structural complexity’ that you can see in your organisation’s processes, systems, product/service portfolios, strategies, and organisational design. This could be described as the complexity that is built into your organisational ‘hardware’.
Complexity is also a human programing, or ‘software’ problem, because it is created by the mindset and behaviours of the people within your organisation. Actively attacking structural complexity (e.g., simplifying core processes or your organisational design) by using classic management interventions can be helpful. But, this will not address the behavioural and cultural roots of the problem. To sustainably reduce complexity, you will need to address both the structural complexity and the behaviours that create complexity.
This three-part white paper explores the pivotal role that senior leaders play in creating a mindset and culture of simplicity within their organisations. By the end of the three leading simplicity papers, you will understand why your leadership is so essential in the battle to sustainably reduce complexity and how you can become a more effective leader of simplicity within your own team or organisation.
OUR BEHAVIOURS CREATE COMPLEXITY
Overview: Management and leadership behaviours are the real root cause of complexity in large organisations
First, let’s explore the behavioural side of complexity a little more. A good start point is to ask ourselves where does complexity originate from? The truth is both simple and brutal – complexity does not create itself! It is created by the behaviours, decisions, and actions of people. That’s not to say that people go to work deliberately to create complexity – far from it. The vast majority of people are working diligently to contribute to the success of their organisation. But, we create complexity because it’s in our nature. Humans have a strong drive to progress, create, adapt, compete, and survive. All of these characteristics make us highly successful and adaptable creatures, but they also result in people changing and ‘improving’ their surroundings as they strive to progress and advance. In large organisations, there are thousands of individuals, all seeking to progress. As a result, big companies quickly become highly complex, adaptive systems. Complexity increases, largely unconsciously, as people seek to improve things, learn, progress, and satisfy their own needs and ambitions. It seems that, sometimes, we just cannot help making things more complicated! The innate force to improve overpowers the motivation to simplify.
The problem is compounded because most people are unaware that their own behaviours and actions cause complexity. In our work with management teams, we observe that, when prompted, people readily agree that complexity is preventing them from realising their full potential. But, they usually point to other teams as the creators of complexity, casting themselves as the victims. Typically they might say “The HQ mandates that we do it that way” or “We did not design this complex process, but we have to comply with it”. Very few people understand that their own behaviours create complexity, or that many sources of complexity are within their own sphere of control.
Complexity has become so pervasive that it seems natural. As a result, is not something that we typically spend a lot of time thinking about or challenging. So, we do not instinctively look to prevent or remove it.
Further, in work and life things rarely evolve to become simpler over time, they almost always become more complex. At home, we acquire more and more possessions and clutter. At work our products, services, technology, and processes tend to become more complex over time. In this sense complexity should be viewed as a ‘progressive’ problem, similar to heart disease. Once we have it, the disease will get worse – unless we actively do something to make it better.
Hopefully, you can see that the structural complexity we see in our business hardware (e.g., a complex process or product) is the result of our own behaviours and decisions. We are the creators of complexity; it does not create itself.
HERE ARE SOME EXAMPLES OF COMMON MANAGEMENT BEHAVIOURS THAT CREATE COMPLEXITY IN LARGE ORGANISATIONS:
- Over-intellectualizing or over-engineering: Making something more intellectual or more complex than it needs to be for the situation or the audience in question.
- Reinventing: Creating a new way of doing something, when we already do it well elsewhere. Replicating existing products/services, with unnecessary local adaptions.
- Mistrust: Lack of trust drives us to create processes, reporting systems and other management mechanisms ostensibly to control people or protect ourselves. We should invest more time in enabling people to do their jobs effectively… and then trust them to deliver.
- Tinkering: Making changes that reflect your personal preference for how something should be done – your way is probably different, but is it actually better? This behaviour is also driven by a desire to stamp our mark on things.
- Avoidance: Focusing on the process or the politics rather than the real problem or issue in hand. This creates a distraction that confuses people about the real issue/problem.
- Lack of focus: Focusing on too many small things, failing to look for and/or prioritize the bigger opportunities that create real value in your company.
- Aimlessness: Failing to set a clear and/or correct destination from the very start. This leads in teams of people wandering aimlessly in the wrong direction, or duplication of activity.
- Adding without taking away: Adding to something without taking something less important away first. Stopping things is hard for people, we don’t enjoy cutting projects out, but we should!
- Perfecting: Trying to make things 120 per cent perfect, when 100% is good enough!
The list is not exhaustive. You can probably think of other behaviours that create complexity. However, these examples illustrate that human behaviours and actions create complexity. This creates a frustrating paradox: As humans we dislike working in overly complex systems. We want to see the fruits of our labour and when we cannot make progress, or see the impact we are having, we become frustrated and demotivated. That’s right! We become demotivated about the complex system we have helped to create.
So if our behaviours are a major driver of complexity, it follows that changing these behaviours (and ultimately changing corporate culture) is essential in the battle against complexity. If we don’t change our behaviours, we will not find a sustainable solution to this pervasive problem. One generation of managers may successfully remove some of the structural complexity, but if we do not have a culture or mindset of simplicity we will miss thousands of smaller, more local, complexity issues. If we do not change our organisation’s behaviours and culture, the next generation of managers will simply undo the structural reforms – making things more complex again!
A multinational company we know has complexity reduction as a key goal for their business. Whilst working with them on a project we heard several complaints about the introduction of their new expense reclaim system. Despite having a stated goal to reduce complexity, they had just introduced a new expense claim system that was significantly more complex than the old one. When the team who developed the new expense claim system were asked why it was more complex, we were told that simplicity was not one of the design parameters used to guide the project. Of course, they could easily have made the expense reclaim system both better and simpler, the two are not mutually exclusive. But, this did not happen because they do not yet have a simplicity mindset within their organisation. In most companies, evermore complex systems and processes are being launched every day – not because they have to be more complex, but because simplicity is not something people instinctively consider in their daily work. Hence, avoiding or reducing complexity is not top of mind.
Leadership is critical in the battle against complexity. Unfortunately, data from Simplicity Consulting’s 360 survey demonstrates that leaders in big companies today are not good enough at leading simplicity. The Simplicity Personal 360 Survey explores how effective people are at living simplicity as a behaviour and mindset day to day. To date, over 7,000 people from a broad cross section of global companies have completed this survey.
The survey gathers feedback on an each individual leader from several people who know them well – their direct reports, peers, and bosses.
THE KEY 4 KEY AREAS COVERED IN THE SURVEY ARE:
- Valuing simplicity – Do I truly believe in and value simplicity as way of working?
- Communicating simply – Do I communicate with clarity and simplicity?
- Living the simplicity behaviours – Do I exhibit simplicity in my work behaviours?
- Leading simplicity – How good am I at bringing simplicity to life within my team?
Taking the combined results of 7,000 people, leading simplicity is given the lowest score, followed by living the simplicity behaviours. In other words, as leaders, we are not yet living simplicity as a value or encouraging it within our teams.
Our work behaviours and decisions are the root cause of complexity. For any significant behavioural shift to start, your leaders MUST embody the behaviours that you want the rest of the organisation to mirror. Without this leadership drive, the desired change in your behaviour and culture will be impossible to achieve.About the author: Melvin Jay is founder and CEO of Simplicity Consulting. He has 30 years of commercial and consulting experience. The first 15 years of his working life were spent battling complexity in blue-chip companies including Danone and Novartis. As a leading expert in simplicity, he now works with the world’s biggest companies to help them reduce complexity. He spends all day, everyday, thinking about simplicity and helping his clients reduce complexity. He is passionate about the role that leadership plays in creating culture and changing mindsets in large organisations and regularly coaches senior executives on how to lead simplicity. He co-authored the bestselling and award winning book “From Complexity to Simplicity” with Professor Simon Collinson.