Business simplification is increasingly recognized as a strategic requirement for companies seeking to innovate and succeed in today’s complex business environment.
- As your business grows, the bolted-together systems and processes that worked when your company was smaller won’t scale sufficiently to support new customers, employees, product lines, and service offerings.
- Equally important, there’s a natural tendency for companies to create more complex processes over time – for example, to accommodate new customer demands or to work around disconnected systems. And as they build up, these complex processes create inefficiencies, drive up costs, and make your business less agile.
But if barriers keep slowing down your simplification efforts, you’re not alone. As noted in a recent Knowledge@Wharton paper, “Business Simplification 2015: The Unmet Strategic Imperative,” companies battle everything from a resistant culture (often due to fear that simplification will lead to lost jobs) to managers who lack the time to implement new systems, processes, and policies.
But sometimes simplification initiatives stall because they fail to start simple. Sometimes the best way to get the ball rolling is to focus on one or two processes – for example, a decision making and an approval process – and empowering the people closest to those processes to simplify their daily work.
The project should have clear-cut goals and incentives tied to performance.
For midsize companies, success in the current economy depends on the ability to optimize operations, increase efficiency, cut costs, and build lasting relationships with customers. For example, how do you make sure you’re carrying just the right type and amount of inventory? How do you make the most out of your limited resources? How do you redefine your products and services so that you can outlast your competitors? How do you attract new customers and retain your existing ones? As this example illustrates, this approach to simplification changes people and culture from the bottom up, paving the way for acceptance of larger initiatives that require a more top-down, technology-driven approach.
- Such projects still need to have the support of top management and be tied to strategic initiatives, of course – but the goal is to build momentum around the goals and benefits of business simplification.
- People can experience first-hand that it’s really just adopting a simpler way of working that reflects proven business practices. And they can realize the benefits directly, right away.
So where do you see opportunities to start simple with simplification within your business?