Economic growth has been slowing worldwide. A poor improvement of worker productivity is partly to blame, but one of the key reasons is simple: the constant rise of complexity.
Complexity of organisational structures, complexity of procedures and processes, complexity of metrics and committees, complexity of the customer offer and messaging, everything that – ironically – companies deploy to manage increasing complexity in their external business environment. Organisations suffering from complexity syndrome, will simply not grow as fast as those who value and promote simplicity. We call this the value of incisiveness.
The need to think and act incisively
As competition increases, with new technologies offering a greater array of ways of deliver products and services and connect with customers, the threat of complexity increases with it. But herein lies an opportunity: the businesses that simplify their strategy and streamline their processes – to both think and act incisively – can respond more quickly and effectively in these complex business environments and gain a significant advantage over their competitors.
The solution is not, as most businesses do, to add even more levels of complexity such as new structures, rules, meetings, and processes. These invariable result in slowing reaction time and productivity. Businesses that cut through the complexity by thinking and acting incisively boost efficiency and cut operational costs, resulting in above average revenue growth and profit margins.
The cost of complexity
Complexity costs every business time and money and morale, regardless of their size. Even the smallest businesses can be affected if their systems, processes, and culture get in the way of respond effectively to changes in market conditions or customer demands.
How complexity is perceived depends on the level of managerial responsibility. Employees with no managerial responsibilities are 70% more likely to perceive complexity than directors. This truth lies at the core of the primary cause of complexity, because the top leaders in any business have a significant impact on how complex that business becomes. But because they are not regularly at the coalface, they don’t tend to see how much the complexity of their organisation’s structures, processes, and interactions harm employee productivity – and they don’t feel the direct effects of that complexity, although their bottom line suffers.
Also, top leaders don’t generally need to abide by the many regulations and processes they create and can instead work outside the systems that apply to the workforce. Unfortunately, too many managers take little responsibility for the complexity of their employees’ lives. Many of them actually believe they are good at reducing it.
So, if top leaders and senior management don’t have a clear view of how much complexity is affecting their business, then any attempt to make that business more incisive becomes far more difficult. That is why it is vital to address every aspect of your organisation when evaluating its complexity.
The value of incisiveness
Every business seeks the path to higher profits and faster growth in an increasingly competitive and complex environment; most struggle to find it. Instead of looking at external causes, successful leaders examine their own business more carefully. This way, they target where complexity has crept into many of their structures, systems, and processes. And worst of all this is reflected in the complexity of the brand.
Rooting out complexity, especially when it comes to brand focus, is only possible by taking a strategic and structured approach. Businesses that follow this path will reap the rewards of improved productivity, customer focus and achieve a competitive advantage.
Four steps to a more incisive business
1. Assess. Start by identifying the issues and customer barriers that are caused by complexity. Carry out high-level evaluations to uncover the areas of complexity that need further analysis.
2. Blueprint. You then need to understand the underlying cause of your complexity syndrome. Usually, this can be achieved through in-depth interviews focusing on specific issues linked to staff performance and customer engagement.
3. Design. Next, you need to develop changes that address the root causes of those specific complexity issues. These changes need to be carefully targeted to encourage desired behaviours and produce a clearly measurable impact on performance.
4. Construct. Finally, you need to apply those specific changes by establishing a project management team to prioritise these solutions, develop a roadmap for change, drive the change process, and then track the improvements.
And 8 ways to implement incisiveness
Incisive changes are needed in any or all the following parts of a business. It all begins with more incisive leadership, which holds together and affects every other area:
1. Leadership. Lead by example, define clearer rules and keep to them. This will encourage greater clarity of communication and reinforce desired behaviours.
2. Vision and brand strategy. Sharpening your company’s vision and brand strategy, enabling simpler and more effective initiatives to cascade through the organisation for alignment and consistency.
3. Business structure. Remove unnecessary organisational layers, streamline reporting lines, and simplify controls.
4. Activities and roles. Sharpen definition of responsibilities for departments and staff, and remove duplication of activities to eliminates non-value-added work and make the business easier to navigate.
5. Systems, processes and IT. Again, clarify definition of policies and simplify rules for company processes supported by an appropriate IT infrastructure. Avoid handoffs between departments.
6. Employees and interactions. Structure career paths, improve employee development, increase engagement, remove silos and lessen the importance of personal connections when it comes to promotion.
7. Decisive decision-making. Clarify the mandate of managers to make decisions, avoid escalating decisions through several layers, promote understanding and cooperation.
8. Performance management. Sharpen your view of the business through aligned KPIs, processes, and incentives. Everything should lead back to simplifying your brand and strengthening your customer focus.
All these elements are interconnected, and a more incisive business has taken more than one of these. And addressing one area of over-complexity at a time won’t work either – transformational change requires simultaneous change in every area. For instance, organisational structures and processes usually become more complex as new departments and functions appear. But these areas can’t become more incisive over the long-term without also making changes to leadership, to how company vision and strategy are communicated, to how roles and responsibilities are defined, to how employees interact and are supported, and how incentives are established.
To reduce complexity in your business and increase value through incisiveness, talk to the established brand agency that specialises in your sector. Ask about CMDi’s Brand Builder programme >
