How to reduce organisational complexity
Building and running a company is challenging. Keeping it growing is even more challenging. Find out what you can learn from companies such as Nokia, Amazon and Toyota.
Growth creates complexity.
When people, processes, and technology begin to grow beyond a certain point, they become increasingly difficult to manage. Complexity becomes a major hindrance to growth.
In fact, the Founder’s Mentality research indicates that only 1 out of 9 companies sustain profitable growth for at least 10 years, and 85% of executives believe that the issues are internal and not external.
Complexity debt
When systems are tightly coupled and connected, changes are nearly impossible. Each team has their own priorities, so you have to schedule meetings, create lengthy reports and wait a long time for feedback and support.
You’re trapped in an overly complex system of work that makes it difficult to solve real business problems. All the work you do is blindly focused on small aspects of the whole, diminishing the quality of the outcomes. This affects not only team performance, but organisational performance as well.
Nokia is the perfect example of a large, successful company that encountered multiple internal issues. Nokia was disrupted by Apple and Android because they failed to prioritise their resources.
Rather than rebuilding the foundations of their software systems to make developers more productive, they spent hundreds of millions of dollars hiring more developers and investing in Agile. Why is this bad?
While the top management of the company was fully prepared to meet new competitors with an ‘agile’ mentality, the people at the lower levels of the company were not.
The addition of more team members to make them work faster just led to more problems, as it requires more coordination efforts and detracts from the return.
Their focus on growing their team and implementing agile impacted their technology management. It took their software developers 48 hours to find out if a change worked or needed to be reworked since they were restricted by the Symbian platform. As a result, they couldn’t build what they needed.
Ultimately, their strategic decisions led to their failure.
Complexity requires simplicity
According to Gene Kim, the author of The Unicorn Project, one way to reduce internal or organisational complexity is to make it easy for people to do their work. Poor designed systems can turn even the most motivated employees into frustrated poor performers.
“A bad system will beat a good person every time.”
— W. Edwards Deming
This requires changing the current structure of your work system so that everyone in your organisation can make changes quickly, confidently, and safely without needing to consult with other teams.
Here are some lessons that you can learn from Amazon and Toyota.
Amazon recognises the importance of solving problems at the front lines where the day-to-day work takes place. Over time, they rearchitected their internal services to be decoupled from each other in order to improve developer productivity, investing more than $1 billion, and by 2013, they were performing nearly 136,000 deployments a day.
Toyota invested in Andon cords to stop the entire assembly line whenever an issue arises. It gives them the opportunity to improve their work each day, so they are praised for doing so. Problems are quickly identified and fixed, and those insights are passed on far and wide. Through this, innovation, excellence, and outlearning the competition is made possible.
Picture this: You are a part of an organisation where everyone makes daily decisions, solves important problems quickly, and shares knowledge with each other.
