How to Cut Through Organisational Complexity and Get Things Done

Published by:

Business Schore Publishing Corp. 2010

By Ron Ashkenas

The substitute of the book is ‘How to cut through complexity in your organisation and get things done’.

This book is about getting back to basics, eliminating unnecessary red tape and costly, yet ineffective procedures.  One’s immediate response to the subject of simplicity is that it can only be applied to small businesses.  By definition, large organisations are complex, therefore it is supposed that complexity is an integral component of corporate life and globalisation.

However, according to the author, this is not the case.   Ashkenas refers to many large conglomerates that have successfully simplified their operations and made them more efficient including:  Pfizer, Ford, General Electric, Johnson & Johnson and Zurich Financial Services amongst others.

Ron Ashkenas argues that managers can take control of the business, their workload and that the bottom line may be considerably improved by simplifying processes and systems.

But simplifying is much more than just streamlining operations; it is a mindset that managers must embrace.  Ashkenas identifies four ways in which complexity builds up:

1)    structural mitosis

2)    unchecked growth of products and services

3)    cumbersome processes

4)    management behaviours

1. Structural Mitosis

Mitosis is a name that refers to the growing, dividing and coming together of cells in the body.  In the same way that mitosis occurs within the cells of a living body so does it take place in a growing organisation.

Because of changes that constantly occur in business, the organisation structure is never rigid, it’s dynamic, always changing.  Consequently, developments are always taking place, reporting lines changing, new departments being created, consolidation, reorganising, rightsizing, etc.

2. Product Proliferation

Although it is important to provide a competitive range of products and services, it is equally important to keep the growth and complexity of products within appropriate bounds.

Every new product involves R & D, graphic and industrial design, manufacturing requirements, warehousing space, supply-chain implementation, marketing, account handling and more.  This is why a company should keep the growth of products and services within limits even though they are the lifeblood of a business.  Too much of a good thing makes it a bad thing.

3. Cumbersome Processes

Everything that happens in a company is accomplished through processes.  Processes are procedures or methods to get things done.  If these processes are difficult, cumbersome, confusing or inconsistent they seriously impact performance.

4. Ineffective management behaviour

Many managers unintentionally make work more difficult and complex by failing to:

a)    specify exactly what outputs are required

b)    provide clear directives and instructions

c)    be consistent

d)    consider the impact and consequences of directives

Approaches for Increasing Simplicity

1. Simplifying Structure to Overcome Structural Mitosis

There are four approaches for simplifying changes in organisational structure and function.

a) Differentiate between core and context. Core organisational components are those functions or units that drive business strategy.  These should be owned and self-operated because they give a company proper control and a competitive advantage.  Context functions or units support core areas but can be acquired from others.

To simplify, concentrate on maintaining effective control and streamlining essential parts of the business first.  Then outsource functions and activities.

b) Take a customer perspective. The key question here is:  “How can a company make it as easy as possible to do business with customers?”

Viewing the organisation from the outside reveals the irritants, cumbersome procedures and red tape that are often imposed on the source of all profits.

Many companies actually make it difficult for customers to transact business.  They do this through the myriad of forums, procedures and hoops that a customer must jump through.  Companies that serve customers always do better than those that use customers.  And one way to serve them is to make business a pleasure through simplification.

c) Consolidation. A symptom of structural mitosis is the existence of several units duplicating similar tasks in different places. Consolidation aims to bring these tasks together to be undertaken by fewer people in one place.  Many organisations have created what are called “Centres of Excellence”.  These are places where a high degree of expertise is available to deal with high volumes in one place.  To simplify through consolidation, the following matrix is provided:

For activities that are done frequently and require a high level of expertise, the simplification strategy would be to form a Centre of Excellence.

For high volume activities that require a relatively low level of expertise a service centre is the way to go.  If volumes are low but the required expertise is high it is appropriate to outsource tasks.

Finally, non-core tasks that do not require skilled people, and that have a low volume, may be addressed by creating resource pools or aggregations.  This means that work is aggregated in one place and done by people who have other responsibilities as well (i.e. they are not specialists).

By applying the Expertise/Volume matrix tasks may be consolidated in several ways, depending on the nature of activities, importance, required expertise and frequency.  In so doing organisations are able to consolidate core activities and not be distracted by contextual tasks – this simplifies the organisations as consolidation is the opposite of fragmentation, which creates complexity.

d) De-layering. The fourth principle for simplifying organisation structure is to reduce the number of hierarchical levels.  A flat organisation structure reduces costs and improves communication by making it easier for ideas and information to flow up and down.

1. Reducing Product and Content Proliferation

Products and services are the lifeblood of a company.  Corporations need and remain competitive.  However, too much of a good thing can become a bad thing.  For accumulation of an excessive number of products and services frequently become confusing.  Product proliferation can also diffuse focus and add to the cost of production to the extent that it becomes a competitive disadvantage.

Product/service complexity usually has any of the following root causes:

a)    Volume complexity. This refers to a large number of products and services being provided and the adding of           features to the vast array of offerings.

b)    Support complexity. This occurs when customers have confusing or unclear instructions on how to use                   products properly.

c)    System complexity. Having systems and methods that are cumbersome and lack integration are a source of          significant frustration in companies.

d)    Design complexity. This occurs when products are poorly designed or where there are an excessive number           of options built into a product.

Companies often forget that products and services need to be understood.  They should be straightforward and user friendly for customers to gain the intended benefits.

2. Streamlining Cumbersome Processes

Five tools may be used to simplify processes:

a) Best-practice Identification. A highly effective method for simplifying processes is to examine what is being          done by others to achieve outstanding results.  If these approaches fit your situation, employ them.

b) Process Mapping. To simplify a process, establish the flow of processes by means of a Flow Chart.  Specify            what steps are involved, how they are sequenced and who carries them out.  With a Flow Chart in hand                   redesign processes – make them simple and efficient by eliminating unnecessary steps, duplication and                   crossover activities.

c) Six Sigma and Lean. Six Sigma refers to the achievement of less than six standard deviations from the mean in     the ongoing process.  Effectively that would be fewer than 3.4 defects out of a million applications.

Lean is a methodology that focuses on eliminating wasted time and reducing costs.  The Six Sigma and Lean        Processes necessitate analysis and measurement.  With objective information to hand methods are sought for        achieving the required standard and eliminating waste.

d) Rapid Results. Sometimes analysis and logic are insufficient for breaking the logjam of complexity.  In such          situations an approach is needed to breakthrough.  The establishment of a focussed and dedicated team for the      purpose may be needed.  These are sometimes called Cheetah Teams.

A Cheetah Team is a group of people that has been put together for the express purpose of solving a specific             problem.  These teams are given a project with an objective, a time frame, and the unnecessary authority to do       what it takes to meet its purpose.  The rapid results method (or the use of Cheetah Teams) forces the issue.  It         gives a group no choice but to figure out how processes may be simplified and improved in a short space of               time.

e) Work-out. Process simplification is an on-going event.  Because companies are growing entities made up of          living people, simplification must address the human context in which work takes place, including working          environment, motivation, expectations, feelings etc.  All of these make up the culture of the organisation.  The      Work-out approach is intended to improve processes in the short-term while shaping the culture of ongoing          simplification in the long-term.

The Work-out process may be summarised as follows:

1. 1. Curbing Ineffective Management Behaviours

The author refers to what Robert Schaffer has identified as, “The seven deadly sins of demand making”.  These are the traps that managers fall into that cause complexity and confusion.

These are:

• Compromise or break-away from specific requirements and performance measures.
• Engage in charades.  Saying one thing and doing another.  Being inconsistent.
• Accepting trade-offs.  A trade-off occurs where a manager agrees to give relief in one direction as long as something is given back another way.
• Setting vague or distant goals that are not specific or measurable.
• Imposing consequences for sub-standard performance.
• Setting more goals than people can realistically achieve.
• Allowing less relevant activities to disrupt the attainment of important goals.

Other disruptive management behaviours include:

• Imposing objectives and targets on staff.
• Micromanaging.
• Indulging in laissez-fauve management.
• Having poor work-planning discipline.

All the traits mentioned need to be curbed.  These may be done by implementing an effective performance management system that provides the know-how.

THE AUTHOR

Ron Ashkenas is a Managing Partner of Rober H. Schaffer and Associates, where he consulted to CEO’s and senior executives on leadership, organisation transformation and post merger integration.  He is also the author of:  The Boundaryless Organization, the GE Work-Out and Rapid Results.