5 Reasons Why Companies Need to Start Simplifying – Now

Anastasia Dyakovskaya

African American businessman looking out office window --- Image by © Mark Edward Atkinson/Blend Images/CorbisA recent study, powered by SAP and Knowledge@Wharton, has revealed that 51% of today’s business leaders believe that simplification is of strategic importance – and yet only 17% feel that their efforts have been successful. What’s more, according to Bonnie D. Graham’s recent episode of SAP Game-Changers, a 2010 report from Boston Consulting Group showed that effectively managing complexity can result in at least a 25% increase in profit margins.

Those are some big numbers, and though we’ve been making some progress, it’s not nearly as much as we could be. Business has witnessed simplification movements like process improvement and the growth of managerial self-service since the late nineties, Game-Changer panelist and IBM’s Institute for Business Value research director Eric Lesser reminds us. Efficiency experts have been hired and deployed across organizations in streamlining efforts, and still there is work to be done.

The time is now, and simplification is more important – and attainable – in 2015 than ever before. Here’s why:

1. The retention crisis

To put it bluntly, if your organization doesn’t start simplifying soon, you’ll see your best people start to stray. Josh Bersin, founder of research and advisory firm Bersin by Deloitte, says, “Retention and engagement is the number one problem business and HR leaders are worried about.” The rise of Silicon Valley and lean start-up culture has shown people a new kind of work reality, based on high levels of productivity and fewer and fewer unnecessary distractions and time-wasters like irrelevant conference calls or meetings, floods of emails, having to wait exorbitant amounts of time while a project or document makes it’s way from department to department, and so on.

2. Overwhelmed employees

People have had it up to here with that kind of workflow (or un-flow, rather) and they’re looking for something better. Bersin is quick to add, “The overwhelmed employee is now a problem in two-thirds of all organizations,” not least due to the at times damaging or overpowering effects of technology. “If we want to make life simpler,” he says, “leaders have to help people focus… Let’s not give out 15 goals. Don’t send a new email everyday that has another idea in it. Help us decide what the most important priorities are so that all of us feel free to not do the things that are not important.” Amen.

3. Soaring amounts of data and information

Especially considering how much we’re all already working with. “Just the sheer amount of information that companies and individuals are expecting to handle and process and make decisions from continues to increase exponentially,” says Lesser, and it’s not just transactional data, either. “It’s about mobile interactions, locational data, social data; what we call this idea of systems of engagement. And when you have all of this data coming at you from all different places, what happens is people get stuck.” He predicts that visualization and graphic design will continue to help us make sense of it all. Turning dry, never-ending data streams into easily digestible images will be key, powered by the creation of new and interesting ways of catching people’s attention with graphics, layout, and display.

4. Millennials won’t settle for less

Though much industry decision-making is still left up to baby boomers, SAP’s VP of user adoption Kerry Brown predicts that as Millennials begin to move into leadership roles over the coming years, we’ll be able to more clearly see and understand what exactly about our work processes has been unnecessary and inefficient up until that point. Just imagine how much more streamlined we are today than we were 20 or 30 years ago – and thanks mainly to the digital tools that have become available to us. As we move forward and begin to fuse cutting-edge technology with progressive practices, success is sure to follow.

 5. Simplification leads to success

All that’s well and good, but at the end of the day, the conversation must inevitably circle back to one thing: culture. Without a true commitment to change, evolution, and innovation, there’s no room for forward movement, and without simplification, there’s simply less potential for success. “Culture is the new black in today’s data-driven environment,” says Bersin. “Anything we can do to understand and improve our workplace culture results in higher performance and greater customer success. It’s time to reinvent the workplace and how organizations function with the focus on transparency, simplicity, sound leadership and continuous growth.”

That’s the kind of thinking we need to start adopting as we embrace digital transformation and the need – and opportunity – to really start to streamline our organizations. “One of the principles of simplification is giving people tools and freedom to focus,” says Brown, and companies need to create an environment that makes people feel comfortable doing what they need to do – instead of performing unnecessary tasks. People want the freedom to succeed, and leadership will have to put it in place to allow for it to happen.

To hear the episode in its entirety, including the panel’s predictions on the future of business, tune in to SAP’s Coffee Break with Game-Changers discussing Simplifying Your Business: Are Your Leaders Equipped?