The hidden cost of complexity
Many leaders seem to believe that more work means better results, but this is a dangerous misconception. Complexity creeps in when organizations fail to simplify their priorities and processes.
Common causes of complexity are:
- Too many priorities. When everything is important, nothing is.
- Bloated processes. Redundant steps, excessive approvals, and slow decision-making create friction.
- Disjointed technology. Multiple disconnected tools slow down work instead of enabling it.
- Lack of clarity on decision-making. Unclear authority and escalation chains create bottlenecks.
- Focusing on the wrong work. Wasting resources on tasks that add little or no value.
Do you have any of the above complexity in your organization?
The impact of complexity
Why is complexity bad for our organizations?
- It makes us slow which is not very good in today’s fast-moving world.
- Slower execution means we are always 2 steps behind our competition and never win. When decision-making takes longer, and work moves inefficiently we will never be able to compete.
- It drives higher costs. More meetings, more systems, and more approvals means wasted time and money often doing what should not be done at all.
- It reduces employee engagement. Frustration grows when teams struggle with unnecessary bureaucracy. As leaders we need to make it obvious, easy, attractive and satisfying to achieve great things if we do not we block our employee’s ability to perform.
- It means loss of agility. When things are complex it becomes much harder to adapt quickly. Rigid, overcomplicated processes block us from adapting fast to changing circumstances as shifting customer behaviors etc.
If complexity is not actively removed, organizations risk wasting resources on things that should not be done at all.
Leaders must take responsibility for simplification
Simplification does not happen by itself. Leaders must actively work to remove complexity and create clarity. Without clear priorities and streamlined operations, organizations will continue to struggle with inefficiencies.
“Complexity is your enemy. Any fool can make something complicated.
It is hard to make something simple.”
– Richard Branson, British business magnate
Set clear priorities, what matters most?
A major cause of complexity is the failure to prioritize effectively. Leaders must distinguish between what to improve and what to maintain.
What are the critical improvements for this quarter? What are the top three to five initiatives we want to improve and how do we measure success? If this is not clear to everybody, employees will engage in wasteful work. This also means we need to have a watchlist. Areas of interest that should be monitored but do not require immediate action.
Making a clear distinction between improvement and watchlist metrics is critical to simplify what will happen in our organization.
Executives must learn to say NO to distractions.
If priorities are unclear, employees will waste time on work that does not drive results.
It becomes much easier to say no if we have a clear purpose and vision.
Streamline processes: remove unnecessary steps
Overcomplicated processes slow everything down. Leaders must challenge inefficiencies by:
- Cutting unnecessary approvals and bureaucracy. Example: Reduce the number of meetings required for decision-making.
- Automating repetitive tasks to eliminate manual inefficiencies.
Simplifying workflows does not mean lowering quality. It means eliminating waste so employees can focus on valuable work and so you can identify opportunities for effective reusability and automations that increase quality.
Create a cohesive system
Technology should simplify work, not add complexity.
Many organizations have a chaotic system, forcing employees to waste time navigating chaos instead of executing goals efficiently.
Executives should:
- Standardize core systems across teams.
- Standardize tools and templates used.
- Ensure technology is optimized for business impact (around what matters for customers in the customer journey) not the technology in itself.
Leaders must ensure seamless workflows instead of complexity.
Case studies of smart simplification
A large industrial company applied the Smart Simplicity approach to its R&D operations, focusing on enhancing cooperation with suppliers. This strategic simplification resulted in a $400 million boost in revenues and an 11% reduction in time-to-market for new products. (Source: BCG)
A retail bank implemented a comprehensive simplification strategy that increased its productivity by 47%. The project involved streamlining processes and systems, leading to substantial financial benefits and improved customer service. (Source: TOP)
Technology should eliminate friction, not create it.
This means we must start by simplifying before we automate, or we will risk scaling chaos. Scaling poor technology or flawed processes will only create more chaos. If a system is inefficient or poorly designed, automation or scaling will not fix it, it will only make the problems bigger and more widespread.
“The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.”
– Bill Gates, Co-founder of Microsoft
Simplify decision-making: remove bottlenecks
Slow decision-making is a major cause of inefficiency. Leaders must create clear structures for who has authority to make decisions and reduce unnecessary escalations. Which decisions require collaboration and which do not?
Nor is it a good idea to create communication blockers by dated organizational structures or bureaucratic rules that hinder progress.
One example of this is the sometimes slow communication and decision paths in function organizations versus modern customer journey-based organizations.
Where automation can replace manual decision-making. AI and data-driven tools can speed up routine approvals. When decisions can be delegated to people with the best knowledge data-driven decisions can be made faster with higher accuracy.
By simplifying decision-making, businesses move faster, reduce bureaucracy,
and empower employees to take action without unnecessary delays.
Eliminate work that should not be done at all
A major part of simplification is stopping unnecessary work. Instead of improving inefficient processes, ask if they should exist in the first place.
Leaders should regularly ask:
- Does this process add real value?
- If we stopped doing this, would it hurt the business?
- If we don´t do this, would it hurt the business?
- Are we measuring success in a way that truly brings value to customers and hence drive profitable growth?
If something does not create value, stop doing it.
The competitive advantage of simplification
Organizations that simplify their operations execute faster, reduce costs, and improve employee engagement. They create a culture where employees focus on what truly matters instead of navigating complexity.
Leaders who fail to take responsibility for simplification will face waste, inefficiency, and slow execution. Those who actively simplify their organizations gain a competitive edge by:
- Making better, faster decisions.
- Reducing costs by eliminating unnecessary work.
- Creating an agile organization that can adapt quickly.
- Boosting employee motivation by removing bureaucratic obstacles.
Simplification is not about doing less, it is about focusing on the right things at scale.
Key takeaways
Complexity slows businesses down, increases costs, and reduces efficiency. Leaders must actively and consistently simplify by setting clear priorities and eliminating waste. Looking at what can be simplified should be part of every leader’s agenda:
- The best organizations stop doing work that should not be done at all and focus only on value-driving activities.
- Making sure a prioritization system helps everyone focus on what truly matters while keeping a watchlist for secondary areas
- Simplified processes, smart technology, and streamlined decision-making increase speed and agility.
Organizations that remove complexity and embrace simplification will execute faster,
innovate better, and outperform competitors.
Do you want to learn how to simplify your work and work smarter not harder?
