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The complexity of simplicity

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Over complicating things is something intelligent business leaders do all the time. Every business leader has a tendency to add complexity, to various areas of their operations, to the degree that their personal knowledge in that particular area increases.  A deepened level of understanding naturally leads us to ponder what makes the (whole), (greater than) the (sum of its parts). It shifts the focus toward segmentation, like taking apart a clock and focussing on how each individual piece contributes to making it tick.

With deeper levels of knowledge and understanding we get this desire to isolate and optimize each individual part of whatever we are involved in. (i.e. Our companies’ strategy {overall or department specific strategy}, a new marketing methodology, different leadership concepts, our companies logistics, the different elements of our cost structure. etc.)

Expanding core knowledge/understanding and executing what we’ve learned is not a bad thing by any means. It fact it’s absolutely vital for success! But the law of diminishing returns is in full effect concerning the amount of complexity we incorporate and the level of optimization we can expect to achieve.  Economies-of-scale naturally bring new layers of complexity but the key to sustainable success is developing systems where complexity “levels-out” after a certain point. (Similar to the old adage “missing the forest by focusing on the trees”, in that it’s possible to miss the overall point sometimes when we are so focused in one particular area.) For the sake of a business’s longevity there should be a plateau in the level of complexity before any slowing of growth!

Now, obviously, a larger business, or a rapidly growing business, requires a more complex and segmented strategy than that of a small “Mom & Pop” business. But still, size is not an excuse to have an overly complex business structure!

For example:

A lawn-care company that grows from a 2 employee business with 20 customers to a 12 employee business with 200 customers would obviously benefit from (or rather NEED)  a more robust logistics strategy. But a company that grows from a 200 employee business with 3,000+ customers to 400 employees and 6,000+ customers shouldn’t require any added complexity.

Smart companies realize that (optimization capabilities) are finite and the benefits from focusing on optimizing diminish at a certain point. So, since smart companies/people realize that complex thinking has a limit to the amount of benefit it renders, they develop systems to account for future complications & potential problems. This then allows for a balanced approach to optimization and scalability.

The most effective business leaders comprehend the different complexities of their operations and the intricacies of their distribution channels and financing structure but, they don’t fall prey to the “trap of over-complicating”. They can explain their business model and strategy with ease; they have software, HR systems, marketing/sales systems, and business development systems that break-down the massive complexity of their business into (semi) simple & comprehensible manuals. It’s like a painter constructing a master piece, all the different colors and strokes on his canvas look un-purposeful and convoluted at first, but once he’s finished the completed work becomes so utterly simple to see and appreciate. That’s how successful businesses look; a series of complex inner workings that deliver an easily comprehended and very holistic end-product/service.

I love Warren Buffet‘s take on complexity (as it pertains to education):

“Business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective.”

So in summation:

A certain level of business acumen and insight is beneficial in developing greater efficiencies in your business but be careful not to get caught up trying to “reinvent the wheel” in every aspect of your business. Deeper knowledge should obviously lead to better business performance but understand that even though the most successful businesses have extremely complex systems, they are seamlessly executed to deliver utter simplicity in their end-product. Think about McDonalds, Starbucks, Apple, Salesforce, Tesla. Or B2B companies in industries you probably don’t even think about (unless you’re in one) like automation services, collection & disposal services, pharmaceutical companies, the list goes on. A company with thousands of employees and millions of working parts can deliver a seemless service as simple as cheeseburgers from a drive-through.:-)

So, are you engaging in productive strategic action or are you over-complicating things simply because you can?

 

 

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Josh Hamilton

Josh Hamilton

Hungry, Determined and Motivated. These three words sum up my personal disposition. The key to strong business infrastructure is strong relationships. I seek to build long-term business relationships that transcend a simple monetary transaction. My aim has been, and will continue being, to establish very strong win-win relationships throughout my business journey. Opportunist and business creator. My experience lies in building business systems and concepts. My passion lies in motivating and inspiring others. I'm constantly reading and learning to maximize my value creating ability so that, I can achieve my overall goal of fostering substantial wealth for the Kingdom!

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