“From Complexity to Simplicity” – Simon Collinson & Melvin Jay
Okay: so let’s be clear from the start – Collinson and Jay have a consultancy to promote. Cunningly called The Simplicity Partnership, it provides business consulting to a range of impressive clients. All of which is fine, since their approach is something that I’ve been interested in for a while; hence my enthusiasm to review their book, which is targeted at all business managers and leaders.
Complexity arises out of strategic, operational and organisational decisions and frameworks. Collinson and Jay demonstrate through case study how different types of unnecessary complexity have stymied some well-known corporate behemoths.
The authors’ research into the causes and impacts of complexity conclude that as much as 10.2% of EBITDA is lost by companies that are over-complex, compared to those that appear to be managing their organisations with appropriate levels of complexity. And that – taken across the world’s larger organisations – is a lot of dosh!
What became clear to me, as the book’s first section came to a close, is that the balance of complexity / simplicity is, as much as anything, about knowing what your corporate competencies are and then playing to them as strengths; bearing down on non-value-added processes and constantly reducing pointless bureaucracy; and maximising new customer-centric opportunities to develop new revenue streams.
The authors spend around 35% of the main body of the book discussing the impact of people and organisational design on complexity. This is because people - with their multi-various operational relationships – make up many of the components of an organisation; they are a great source of complexity. The main people-issues (identified from the research which underpins this book’s thesis) relate to unhelpful management behaviours, complex Comms and meetings-structures and a poor focus on simplicity.
Organisationally, decisions about divisionalisation, centralisation, geographic spread, functionality, cultural diversity and management control-spans determine levels of complexity. The authors’ research shows that complexity is minimised where organisational structure is focussed single-mindedly on delivering the greatest degree of customer-centricity. They offer a good summary of the ways in which organisational complexity can be reduced, using tried and tested methods.
The book also looks at complexity arising from corporate strategy and the pain that is caused by frequent changes in strategic direction. The authors highlight as unduly ineffectual the sheer process of developing / updating annual budgets. They offer some standard approaches to challenging strategic direction and ensuring that the right priorities remain at the forefront of activity.
Also discussed as purveyors of complexity are operational processes, product / product portfolios and external factors.
Researched exhaustively, the book is supported by academically–robust findings from desk research of 200 of the Fortune Global 500 companies and a survey of 600 managers from large European organisations. It is written in an acceptable, flowing style and the authors have balanced concepts, discussion and case-study material equitably. Backed up with three extended case studies from the pharmaceutical, banking and insurance sectors and with recommendations for further reading, this is a useful reference book for those of us that need reminding about the need for simplicity.
It is fair to say that neither the overarching thesis nor the solutions provided by the authors are particularly new or different, and commonplace tools and techniques are outlined as complexity-killers and straightforward assertions of intent guide the reader toward simplicity. Nonetheless, it is helpful to be prompted about good practice; it is beneficial to read about business in terms of simplicity; and it is useful to have the remedial tools and techniques available in an easy-to-read book.
Despite the lack of originality in the detail and the fact that the “complexity kills” / “keep it simple” messages have been out there since the mid-1990’s (when Michael Hammer unleashed business process re-engineering onto an unsuspecting world), this book is commendable. Whilst it may not fully deliver on its sub-title “unleash your organisation’s potential!” it will undoubtedly give you cause to pause for thought on the things you could be doing differently to make your organisation more profitable, more manageable and therefore more fulfilling to all involved in it.