Making Lemonade Out Of Lemons: A Simple Solution For Overcoming Complexity

Chetan Reddy

simplicity of a lemonade standDoes your company have organizational charts with a whole web of different lines pointing to various team members and managers – a web that would make a spider jealous? If so, simplification is for you.

Scratch that – simplification is for everyone. Whether you’re a 22-year-old entrepreneur running a startup in Silicon Valley, a C-level executive of a Fortune 500 company, or anyone in between, you can reap the benefits of simplification. With companies, on average, losing 10.2% of their earnings before interest, tax, depreciation, and amortization to complexity, it’s clearly time to dam the river of waste generated by convoluted business practices.

Simplification is a purification process for your business. Remember the traditional childhood lemonade stand? In essence, it’s a business that sells pre-made lemonade powder mixed with ice-cold water. Great. So you walk up to the eight-year-old kid who has set up shop on the side of your cul-de-sac and ask to buy some lemonade. The conversation sounds like this:

Kid: Sure, but I’m also selling 22 different papier–mâché butterflies. Wanna take a look?

The pint-sized salesperson then shows you his entire inventory and details each item one by one.

You: They are really cool! But I only want one cup of lemonade.

Kid: I sell a minimum of two cups at one time. But I can check with my sister, who needs to ask my mom, who needs to talk to my dad, who needs to consult with my grandpa…

You get the point. Before you know it, you’re waiting 10 minutes for an answer from Grandpa, who’s in another country sleeping next to his iPhone that desperately needs to be charged.

You: I gotta run, kiddo. I’ve got a social listening call in the office now. Maybe another time?

Obviously this is a trivial example, but that’s the point. The complexity involved in this scenario took away from the core business – too many products and too much hierarchy.

“A simpler company culture is one that has an easily defined, easy-to-use structure,” advises Darren Gibson, global people and organizational change leader for Ernst & Young. If our lemonade salesperson could make decisions on his own and didn’t need to defer to an antiquated hierarchy, he would have made a sale. When you scale this example to suit a multibillion-dollar businesses, it’s easy to see how complexity can get in the way of profit generation.

Simplicity is vital to removing the remaining friction within all internal tools and processes, according to the 2015 Future of Work Study conducted by the Jensen Group. With roughly 67% of all business leaders citing simplification as the next key strategic important in the future in the “Simplifying the Future of Work Survey” conducted by Knowledge@Wharton, it’s wise to start evaluating your own businesses. (This is one of the few times I will advise you to follow the herd, but they’re onto something here.)

Sina Wendt-Moore, CEO of Leadership New Zealand, understands why the kid in our example lost his business: “Simplicity is about letting go of where power sits. It’s not about going three levels up the chain of command to get approvals.” People want to see how they can make contributions to the workplace and organization’s ultimate outcomes. When they have to continually seek approval further up the chain of command, employees become disengaged and less courageous in wanting to make a significant difference.

Simplicity filters out “all the unnecessary things until you get to the essence of what’s really important and necessary,” says Sam Yen, chief design officer at SAP. If the kid had eliminated his superfluous stock of butterflies from his lemonade stand, he could have focused on the core money-making product. There was a clear motive originally: to sell lemonade on a hot summer day. The butterflies only distracted from that ultimate plan.

A company’s way of doing things either creates complexity or leads to simplicity. To learn more about the drivers of simplification, stay tuned for next week’s blog. In the meantime, deconstruct that spiderweb you call an organizational chart. Since it may take a while, sip some lemonade to keep hydrated too.

This is the first of a three-part blog series on the Simplicity Culture Map in partnership with Bill Jensen, CEO of The Jensen Group.

For more insight on why simplification should be part of your business’s future strategy, see The Time For Simplification Is Now: Why It’s Important And How You Can Get Started Today.

The Future of Work is being by a number of trends, is one trend more important than the other? Is your business strategy aligned to any of them? We want to hear from you! Help us discover these answers and more by taking this 5 minute survey!

About Chetan Reddy

Chetan Reddy is a Duke sophomore studying Economics. He was a corporate marketing strategy intern during the Summer 2015.