Is complexity killing my business?


Yesterday I saw ANZ CEO, Shayne Elliot, speak at the Australia-Israel Chamber of Commerce Luncheon in Melbourne.

While pleased to be invited to the event, I’ll admit I had my skeptisism about how engaging listening to a bank CEO would be.

Side learning – don’t judge a book by its cover, or assume that all bankers are boring. It turns out they’re not.

One topic of conversation that resonated with me was Shayne’s commentary on the dangers of complexity in business.

Before I go on, a quick comparison between ANZ and my own business:

ANZ employ around 45,000 people.

My business employs exactly 20 people (including me).

I am under no false sense of grandeur, nor of the belief that the complexity of my and Shayne’s businesses are on par. But the theory of pursuing simplicity over complexity stands, no matter the size of your business.

As I grow my business, I am faced with new challenges on a daily basis. Increasing our headcount, expanding our service offerings, diversifying our industry specialisation, augmenting our client engagement strategy. The list goes on, and they are just the internal ones…

What about external ones? Emerging technologies, new competitors, evolving customer buying patterns, regulatory changes, economic instability, Donald Trump…

One thing is for certain, running a business seems a whole lot more complicated than it did 10 years ago, where the most complex of business problems were solved over a 6-pack and a game of Wii Sports.

So how does a business respond to this increased complexity? Well we fight fire with fire. Policies, processes, procedures, methodologies, complex decision making chains, working groups, a white board filled with shapes and arrows, and an over-enthusiastic MD standing in front of it, saying the word “game changer” a lot.

I like to think that I am not naïve. As a business grows, it is inevitable that so too must the formality of its operations – the alternative is inconsistency and unfairness, poor quality of service, increased and unsustainable risk, dissatisfied customers and frustrated employees.

But is there a tipping point in the pursuit of efficiency, where adding complexity to an organisation’s structure and its processes begins to have a negative impact on productivity?

According to the complexity curve, the answer is yes:

As layers of complexity are added, decisions become harder to make due to the sheer amount of considerations that are forced to be given and, in turn, the decision-making process can often drag out. We find that the very efficiency that we were pursuing is what we end up losing and, yep, productivity diminishes. On top of that, staff risk being confused, irritated by red tape and ultimately disengaged.

So, what’s the solution? Throw all our processes and procedures in the bin and dust off the Wii?

Absolutely not. The result would be nothing short of chaos.

Instead, I’ll take a leaf from Shayne Elliot’s book and commit to the pursuit of simplicity over complexity. I’ll do my best to best to focus on the objective, not overcomplicate decisions and avoid getting lost in flow charts and Venn diagrams along the way.

So… Is complexity killing my business? No it’s not, but I feel it’s lurking in the shadows ready to pounce. I’ll be sure to keep an eye on it, because if decision making can seem this complex when Aspect has 20 staff, I shudder to think about when we have 45,000.