5 Signs Your Business Is Too Complex — and What You Can Do About It
Despite all the money that goes into reducing the effects of complexity, customers can still notice when processes are taking too long or not working at all.
It might sound overly dramatic, but I view complexity as a corporate disease and simplification as its cure.
Complexity can limit your growth, make your customers unhappy, and significantly reduce profitability.
Instead of dealing with it, many companies choose to mitigate the effects of complexity by hiring more employees, expanding their call centers, or buying expensive computer software in the belief that automating these complex processes is the solution.
Unfortunately, these measures are likely in vain as the underlying complexity of their organization won't change; only the symptoms might subside.
Despite all the money that goes into reducing the effects of complexity, customers can still notice when processes are taking too long or not working at all, and they must spend countless hours waiting for an agent to fix issues that shouldn't have occurred in the first place.
I am sure you have experienced many frustrations yourself, either as an employee dealing with furious customers or as a customer trying to find someone who can solve your problem.
5 Signs Your Business Is Too Complex
You may already be aware, albeit secretly, of some of the complexities in your organization. However, I strongly recommend taking action if you detect these five signs.
1: Your customer service call volume has increased while your revenue stayed flat
It is normal to receive service calls because some problems are so rare or specific that they require a human to find the best solution. But a sudden spike, even a steady increase, in the service call volume would be a reason to worry, especially at flat or declining revenues.
2: Your service reps are frustrated
If your service representatives have become more frustrated, it's a sure sign that something is wrong with your operation. Remember that any unresolved issues with your software or products will eventually end up with one of your service reps.
3: Your website only offers a few or no self-service options
Websites that offer few or no self-service options can appear outdated. Some reasons — such as products not being suitable for self-service or customers not wanting self-service options — seem more like an excuse for not having developed self-serviceable products or for not replacing disjointed, old, or user-unfriendly internal software tools.
4: You are behind on your paperwork
If you are behind on your paperwork or it is a mess, you should consider hiring help to sort it out. Otherwise, you won't know how healthy your company is, how high the unpaid customer or supplier invoices are, how much money your business is making, and how much you can safely invest.
5: You avoid additional work for fear of worsening the situation
Feelings of fear can indicate that something is wrong. If you are shying away from business opportunities for fear of worsening your situation, you should make urgent efforts to address the root causes of your organization's complexity.
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Simplification — the Cure
"Anyone can make the simple complicated. Creativity is making the complicated simple," said Charles Mingus, the famous American jazz bassist, pianist, composer, and author. What applies to music also seems to apply to organizations.
Here are three steps to simplify your business. Unfortunately, none are easy. And they all require a healthy dose of creativity.
Step 1: Simplify your product and service portfolio
The more business lines your company has, the more complex it usually is. Therefore, to reduce an organization's complexity, you must question the number of business lines your company maintains. The less, the better. Remember, your goal is to simplify your portfolio, not expand it.
Fortunately, not every business line contributes equally to a company's overall profitability. Because these differences can be significant, you must analyze each business line's profit contribution and ask what would happen in terms of revenues and direct and indirect expenses if you closed the least profitable one. If you don't want to close it, ask what it would take to turn the least profitable business line into the most profitable.
Step 2: Simplify your core processes
If you don't know your core processes, assume nobody does. Undefined core processes can lead to a lot of friction, finger-pointing, and yelling between departments because it is unclear who is responsible for which task.
Therefore, first, describe your current processes. Second, define and redesign your core processes by reducing the friction between departments. Finally, establish clear responsibilities and performance metrics for each process step.
Step 3: Simplify your software architecture
Software is supposed to adjust to your processes, not your processes adjust to your software. While that is the goal, the reality with off-the-shelf software often differs.
Most cloud-based software packages base transaction flows on industry best practices. This is great because you can access these best practices instantly once you click subscribe. However, to get the most out of your subscription, you'll need to make some compromises and tweak your processes to fit the software's embedded logic.
If you combine software from different suppliers, make sure they make your life easier, not more difficult. Can they autonomously exchange data, and if they do, what permission level is required? Look for applications that natively integrate with your leading software.
There Is Beauty in Simplicity
Simplifying your business is like uncluttering your home. It is challenging and requires a lot of patience and perseverance. But when you're done, your company will be beautifully simple, with happy customers and employees, and ready to grow again. After all, there is beauty in simplicity.
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