The Focused Company

Complexity is a natural trait of any large organization—“natural” because it is a by-product of business decisions that are sound and rational. Is it any wonder that CEOs in a recent survey identified complexity as the primary challenge they face? Faced with such concerns, most companies try to take action. Teams attack product-line complexity, organizational complexity and complexity in IT systems. They create new structures. They re-engineer processes. They put in more stage gates and ROI hurdles for new products, and they pursue functional excellence. Unfortunately, what they usually find is that fixing complexity in one area is like squeezing a balloon: It just pops up somewhere else. Though one element of the organization may seem to work more smoothly, costs continue to rise and decisions continue to be bogged down in bureaucracy. The key, we have found, is to follow the connections where they lead. As anyone who has tried to squeeze the balloon can attest, the different kinds of complexity really are interrelated. It’s hard to get results by attacking just one aspect of the business, such as processes. But that interrelationship also creates a web of opportunity: Simplification in one area opens up possibilities for simplification in others. The result of such a multipronged approach, ultimately, is a truly focused company—and results that last.

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