The Future Business Formula is my new book that provides insights into the changing landscape of business and how organisations can adapt to succeed.
In my latest blog in the countdown to the book’s release in May, I provide an overview of Chapter 9 – Simplification. In a world of complexity, is it possible for organisations to simplify themselves to allow a faster response and better decision-making that will help them outperform their competitors?
Principle Nine – Simplification
Formula 1 teams know the importance of simplicity and clear goals. They focus on key performance indicators that matter, such as speed, reliability, and safety, rather than overcomplicating things. The most competitive teams operate as closely networked organisations with short lines of communication to ensure a rapid response to problem solving and alignment across the business.
To outperform their competitors, businesses must simplify themselves, operate at the speed of a start-up or Formula 1 team, and focus on the things that will really make a difference.
The complexity excuse for not delivering
Bureaucracy, born out of the industrial revolution, has become inflexible and rigid, causing delays in decision-making and wasting time, money, and effort. It’s time to strip out the bureaucracy and simplify.
Organisations need to adopt new tactics to navigate the complex world we live in, where traditional cause-and-effect analysis no longer works. Often, unnecessary complexity exists within organisations and removing layers of bureaucracy will have no detrimental impact on business.
We need to embrace complexity by using fast experimentation and make decisions based on the best information we have at the time.
Are you managing performance or enabling it? Bjarte Bogsnes, Chairman of Beyond Budgeting, uses a traffic metaphor to demonstrate the difference. Traffic lights disempower people with rigid rules and old information, while roundabouts enable people to make real-time decisions based on guidelines and principles. Which method is more effective, safer, and cheaper? Always the roundabout. What kind of organisational construct are you building?
Simplify to align
There are numerous things you can do to remove functional barriers and align your business:
- Break down silos and align your leadership team behind a common purpose.
- Simplify your agenda and focus on the most important strategic drivers.
- Performance management should be measured against outcome-based KPIs, not individual contributions.
- Ditch unnecessary bureaucracy, and re-engineer for ‘minimum required policies/processes’, or simply use guiding principles, to release your employees from the sclerotic, disempowering tangle that has been created.
- Embrace experimentation to validate solutions and demonstrate value in a low-cost, low-risk way.
- Delivery should be valued over process to make a real difference for your business.
- Don’t let the status quo hold you back.
Good decision-making requires experimentation, not just intuition. Leaders must embrace complexity and allow for testing and adaptation to find solutions. Cognitive diversity and evidence-based decision-making are also key.
Organisations that embrace simplicity, operate at speed and focus on key performance indicators will outperform their competitors. Simplification will ensure better decision-making, faster innovation and ultimately a more competitive edge. It’s time for organisations to strip out bureaucracy and operate with the speed and agility of a start-up or Formula 1 team.
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Read Principle One: Strategy
Read Principle Two: Customer
Read Principle Three: Alignment
Read Principle Four: Leadership
Read Principle Five: Culture
Read Principle Six: Talent
Read Principle Seven: Innovation
Read Principle Eight: Change & Delivery
Read Principle Ten: Organisation Design
Read Principle Eleven: Learning
Read Principle Twelve: Measurement
More information on The Future Business Formula