To Truly Simplify, Get to Know Complexity!
Remove the UNNECESSARY and simplify the NECESSARY
Part 1 of the 5 part series on Simplification of B2B Commerce
My years as a rock-climber and mountaineer taught me a lot about how to simplify...every unnecessary ounce and gadget presented a downside or risk; BUT leaving out an essential item could be a real problem. Each climbing adventure involved hours or days of planning, preparation, gear-sorting, and balancing. Clutter was the enemy; clean, light and simple was a best friend. I enjoyed the whole process – especially when everything I needed during the climb was there – and nothing I brought went unused. Truly simplified meant we’d found a perfect balance between necessary and unnecessary.
As it pertains to my days in large corporations, that’s been a real challenge. The balance between over and under simplification has been harder to reach. “Keep it Simple” often translates to “Dumb it down quickly” by grabbing the first quick fix to whatever was seen as too complex. Truly complex business challenges usually have deep roots – where the complexity cuts across customers, channels, organizations/people, business functions and systems. A favorite B2B example is “Clean Order” projects. In my days as a CIO in complex channel and product markets, we always faced eroding margins, sales inefficiencies and poor customer satisfaction in the Quote to Order processes. This is by definition a complex environment; and as a supplier we typically ‘ate’ the cost of any errors/omissions. They were absorbed in the leaking margin of these orders as they were ‘cleaned up’. So, I’ve seen at least twenty oversimplified Clean Order” attempts – frankly, most of them did nothing except to waste a lot of time, and frustrate the smart, hard-working people who tried to make them succeed.
The simplification projects that succeeded had common denominators – they didn’t OVERSIMPLIFY by ignoring the distinction between NECESSARY and UNNECESSARY complexity. In the clean-order example, selling complex products with varying components, specifications, and commercial terms through multiple channels to diverse end users and intermediaries is inherently complex. Rule of thumb: “EVERY TIME YOU ADD ONE ENTITY TO A PROCESS YOU DOUBLE THE POTENTIAL COMPLEXITY”. So, in that world there are lots of people, organizations, and business entities engaged in the cycle… ADD TO THAT THE COMPLEXITY OF THE PRODUCT SELECTION AND CONFIGURATION. Now you have a complex situation on your hands – but it’s one that is dictated by market needs, and essential to your value proposition. So it’s necessary. Simplify it to maximize your competitiveness or get ready to lose in that market.
“EVERYTHING SHOULD BE MADE AS SIMPLE AS POSSIBLE; BUT NOT MORE SO" (Einstein): Ignoring the value-added complexities inherent in the products and channels and customers fails to simplify. Wishing for simplicity doesn’t make it so. Oversimplification of complex B2B challenges includes commoditization of the products and the downside market share/margin erosion, reorganization of people/teams around the same weak processes and tools, or other ‘quick fix’ solutions. None of these ever works for long. They all fail to make a distinction between Necessary and Unnecessary complexity. They all leave out one or more key elements of true simplification. Beware of the OVERSIMPLIFIER!
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