Business Simplification: What It Means And Why You Should Care

Wilson Zhu

keep it simpleInflexible processes. Lost opportunities for growth. Revenue loss due to inefficiencies. If these scenarios sound all too familiar, you’re not alone. In fact, the Global Simplicity Index revealed that 200 of the largest companies in the world lose on average 10% of their profits each year.

So whom do you blame? Your workforce? Technology? Processes? Leadership egos?

The truth is all of them are culprits of a larger issue: complexity.

Complexity: A love-hate relationship

Although most people work diligently to contribute to the success of the organization, their behaviors, decisions, actions, and tools bring about complexity. In turn, it inevitably creates an environment that is slow to respond, demotivating, and suboptimal in terms of profitability. Humans have a strong need to progress, create, adapt, compete, and survive. These characteristics make us highly adaptable creatures, but they also result in people changing and improving their surroundings and innovations as they strive to progress, grow, and succeed.

According to research from Simplicity Consulting, examples of these complexity-inducing tendencies include:

  • Over-intellectualizing or over-engineering: Developing new products and processes to the point where it goes beyond what’s needed for the situation or the audience in question.
  • Reinventing: Creating a new way of doing something when it’s already done well elsewhere is not only unnecessary, but it’s also distracting.
  • Mistrust: Where trust is lacking, there’s a strong desire to control others and ourselves. As a result, new processes, reporting systems, and other management mechanisms are created. Instead, time, money, and effort should be invested to help people perform better and more effectively.
  • Tinkering: Changing things based on personal preference – not because it was wrong in the first place. Is your way really better?
  • Avoidance: Pandering to politics is a common issue. This focus creates confusion and a smoke screen covering what’s really important.
  • Lack of focus: Paying attention to the small stuff makes it more difficult to seek out and chase bigger opportunities that generate real value.
  • Aimlessness: Failure to set a clear destination from the very start results in teams that wander in the wrong direction or perform redundant efforts.
  • Adding without taking away: Remove less important things first to make room for something new. It may not be easy, but it’s necessary – like spring cleaning.
  • Perfecting: Simply put, 100% is good enough!

The list is not exhaustive, but you get the idea. When you combine thousands of individuals exhibiting these behaviors, complexity increases quickly and largely unconsciously. We become demotivated and complacent whenever progress and meaningful change are not visible.

Why a culture of simplification is the answer

Personally, I equate simplification with spring cleaning. Many of us make it a tradition to reassess our wardrobe, drawers full of random items, and knick-knack collections, and purge any unwanted, unneeded items. This process sometimes takes a series of weekends to complete, but it’s worth it.

The same thing is true with business simplification. By peeling away layers of complexity, organizations have an opportunity to establish closer relationships with customers. Employees are given the space to do what they do best. Efforts are focused on what customers value. And when employees and customers have a voice, they can ignite action – usually for the better. Not only is the workforce happier, but so are customers.

Want to simplify? Get your leadership on board first

Like spring cleaning, a shift towards greater simplicity does not happen naturally. Instead, it takes commitment, sweat, perseverance, and teamwork to achieve the ultimate goal.

Consider a multinational company undertaking simplification as a common objective. Despite stating a desire to reduce complexity, they had created a new expense claim system that was significantly more complex than the old one. When the team that developed the new system explained why it was more complex, they said that simplicity was not part of the scope. Of course, it is possible to deliver a system that is both better and simpler – but they are not mutually exclusive.

To shift the general behavior of employees, senior leadership must embody the habits and instincts that should be mirrored throughout the enterprise. Without this drive from the top, complexity will always persist – even if simplicity is the best way.

Read how your business can think simple, act simple, and run simple. Read part two of this series, “Agility Through Simplification: 11 Ways to Expand Your Business and Increase Revenue.”

Do you want to learn more about business simplification?

Engage in our upcoming #SAPChat Tweet Chat around “What Is Simplification?” with thought leaders including Kerry Brown, Bill Jensen, and IBM.

Details:

  • When: June 23, 2015
  • Time: 11:00 – 12:00 PM EDT
  • Topic: What Is Business Simplification?
  • Guests: Kerry Brown (SAP), Bill Jensen (Simpler Work), and IBM
  • Host: @SAPNorthAmerica

New to Tweet Chats? Follow the #SAPChat hashtag and join from 11:00 – 12:00 PM EST with your questions and comments.

To prepare for this Tweet Chat, download and read the study “Leading Your Organization Out of the Complexity Wilderness” from Simplicity Consulting and get ready to have your questions answered by our panelists. Join us for part 2 on Thursday, June 25.

 business simplification tweet chat

Want more on how to simplify? See Taking Charge of Business Simplification: Why Simplification Initiatives Succeed Only When Executives Lead.

 


About Wilson Zhu

Wilson Zhu is a Marketing Manager at SAP. He focuses on the topic of Digital Supply Chain and IoT. Follow him on Twitter: @thezhu.