Who said running a business was easy?
It’s a bit like learning to drive a car. You have to remember to look in the mirror; you have to press on the clutch and then change gears; don’t look down, you have to steer; and don’t forget which is the accelerator and which is the brake pedal – what, I have to do this all at once?
So, anything to reduce complexity would be a boon for business owners, right? A bit like driving an automatic, at least that’s ONE pedal and the gearshift out of the way!
A business has four areas that can attract layers of complexity:-
- The structure
- The products
- The processes
- Management behaviour.
The business structure can be complex. There is the legal entity, and each different one has different regulatory and reporting aspects, some more complex than others. You can review the legal entity and perhaps choose one that is more simple to operate (but be careful of tax ramifications in any change).
The business structure can also be complex because of the way you organise the business units, or branches. It may also be complex because you are in different locations and they have to be managed differently. There may be layers of management across the whole that have to be dealt with. A review of your organisational structure can lead to the release of some aspects of your organisational complexity. Should you have a flatter reporting structure? Should there be common reporting requirements from units or branches?
Products (and services) can themselves add complexity because it is the norm that you add products and services, or you add aspects of a product such as new features. You very rarely subtract from your products. In this way the management (marketing), processing and even manufacturing of products add complications as they develop. Reviewing the way your products are featured, developed and manufactured can, in some cases, reduce complexity around managing them.
Another area that accumulates complexity as time goes by are your business processes. Often processes and procedures evolve through operation rather than by management. Over the years, people add on layers to procedures, “just to make sure” that things are done right. In time, what was understandable to one group of people becomes a maze of processes for another.
The fourth source of complexity in business is management behaviour. As management give assignments, send email or provide instructions, this can get complicated. Instructions become mini how-to manuals. The feedback requirements cause layers of complexity that may not provide any useful management response.
Email causes complexity by the simple use of the “reply all” button which sends useless information to the wrong people. Email can also get complicated when people attach all types of documents that are not particularly relevant for them but are attached “just in case you need all the detail” (which is unlikely).
So, how do we try to reduce complexity in the business?
If you look at the four sources of complexity in business, the common factor is that they are mostly caused by our behaviour! So the first step to reduce complexity is to recognise and admit that we cause complexity.
Once you can honestly admit that, look at how we do things and what level of detail you actually require. This question can be leveled at structure, product, process and behaviour. Do you really need step by step procedures on how to buy postage stamps? Should it rely more on common sense about what you email to a colleague, that is, what information and level of detail does she really need to use that information in her work? Does there need to be a management structure for each location or can some of them be made common? Do we really need daily feedback on some initiatives accompanied by weekly written reports? Are day by day expense analyses any more informative than monthly ones?
Get together with your colleagues to look at the different processes and demands that you have. Look for common issues and themes that you can all use, or that can be used across the business to reduce any superfluous work.
Running a business is complicated – business is complex enough as it is without human beings adding layers of added complexity that were once useful but no longer serve a purpose, or that asks for necessary detail.
Drive the automatic, not the manual!
If you agree with the way people over-complicate their business, let me know. Log on to www.teikoh.com and get your free tools and resources to help you formulate strategy, provide leadership, and grow your business. While you’re there, subscribe with your name and email and we’ll send you more tips about running your business straight to your inbox. I assure you, it will not complicate your life, it will simplify it!