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COMPLEXITY – How to keep things simple in your Business.

The importance of keeping things simple…..

There is an issue that stifles business execution success. That issue is called complexity.

Tim Cook, CEO of Apple says: “We believe in the simple, not the complex,” and “We believe in saying no to thousands of projects so that we can really focus on the few.”

Businesses tend to become more complex the longer it exists. Also, the pace of technological change tends to increase complexity, as does globalisation, as does complex organisation structures.

If business leaders are not vigilant, their firm becomes increasingly complex, and their ability to execute strategy suffers.

To overcome this, you must foster a “strategy of simplicity”.

According to an article in The Economist, successful, enduring companies share three virtues in common:

1. They have a highly distinctive business model.

e.g. American Express with their focus on a high-income target market customers.

2. They keep their business model as simple as possible.

e.g. IKEA with their showrooms of ready to assemble furniture in flat packs.

3. They apply their business model relentlessly to new opportunities.

 e.g. Nike takes their “swoosh” to one sport after another.

Business leaders need to be constantly reviewing their business, to keep the complexity at bay, and make it simple instead.

Companies like McDonald’s have documented systems for every process, in order to drive simplicity and consistency.

What about industry disruption?

Keeping it simple sounds like a smart practice. That is, until an industry disruptor comes along to make your current business model obsolete.

Enduring companies survive these industry changes by deciding which bits of their business model to preserve – and which bits to dump.

If you keep things simple, your company will be much more nimble, and able to adapt to industry changes.

A Question…..

What parts of your business do you need to simplifying right now?


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