Performance Improvement
Complexity Management
Complexity Management is the process of delivering value while
simultaneously identifying and executing the actions necessary to
reduce complexity over time. This brings significant benefits
in a relatively short time.
Prioritizing Complexities
Determine your zero-complexity costs and then assess the costs
of adding variety back in. You can also assess the benefits of
innovation and determine the focal point where a given innovation
overshoots what most customers want and are willing to pay for.
Organizations get the best results by attacking product
complexity first and organizational complexity next and only then
focusing on process complexity. The reason is: complex processes
often reflect unnecessary product variety or poor organizational
design. If you attempt to simplify a process without changing
product or organizational complexity, you find even more complexity
cropping up in some other process area. It's like trying to make a
balloon smaller by squeezing one part of it- another part just gets
bigger.
Product complexity
Unnecessary product complexity means offering products, services
or options that relatively few customers want. Most organizations
like to give their customers choices. But managers often
overestimate buyers' wants and willingness to pay for all those
choices. Sometimes, indeed, it's obvious that companies have
carried innovation too far.
Effective Complexity Categorization
Organizational complexity
As a company expands, products vary or it moves into new
markets, managers are likely to add organizational complexity. They
may try both to maximize scale and stay close to the customer.
Pursuing both these objectives often leads to complex matrix
structures, duplicated costs at different levels and a lack of
clear accountabilities. Each decision to add an organizational
layer may make sense, but few companies in good times assess the
overall impact of these decisions.
Strategically Aligned Organization
Process complexity
Companies that do attempt to manage complexity usually begin
with processes, often through efforts such as Lean Six Sigma.
However, reducing process complexity should be a company's last
step, not its first.
Understanding Processes
Managing process complexity helps in controlling overspending
and tracking performance more effectively.
How can we help?
All these complexity management efforts help a company
become lean and flexible.
If you would like to know more about how we can help your
organization, click
here.