December 10, 2007

Good day, team,

Many of my clients are going through organizational changes. Needless to say, it’s a difficult time of year for people to undergo changes that affect their jobs. However, many companies want to reposition themselves for the new year to increase their competitive advantage and revenue share. To do so, they institute structural changes that range from modifying reporting relationships to transferring people and establishing new departments and positions.

In the midst of these changes, our instinctive need to feel snug and secure in wintertime is often ignored, not to mention the added cost to finance holiday celebrations. (Sometimes I wish companies would factor the patterns of nature into their decision-making process. But that would require an awareness of how these patterns affect our behavior and how connected we are to the natural world; perhaps the next generation of leaders will take them into account.)

When companies go through numerous changes, their processes, reporting structures and ability to get things done become more and more complex. In a recent article in the Harvard Business Review, “Simplicity-Minded Managements,” Ron Ashkenas writes, “Complexity is actually the cumulative by-product of organizational changes, big and small, that over the years weave complications into the ways that work gets done. For example, at a major pharmaceutical company, the CEO realized that too many layers separated him from the frontline employees. When he challenged the leadership team to flatten the organization, many of the divisions were surprised to discover that there were more layers than they had realized—as many as 14 in one case. The organizational structure had taken on a life of its own.”

In many cases, employees end up spending most of their time navigating the labyrinth of complex structures and personalities within the organization. In the end, accountability is unclear, and decisions are muddy. Sooner or later, it becomes impossible to get anything done.

Your challenge this week is to consider ways to simplify or eliminate some of the complexity in the way you do business. Here are suggestions from the HBR article:

Make simplification a goal, not a virtue:

* Include simplicity as a theme of the organization’s structure
* Set specific targets for reducing complexity
* Create performance incentives that reward simplicity

Simplify the organizational structure:

* Reduce levels and layers
* Increase spans of control
* Consolidate similar functions

Prune and simplify products and services:

* Employ product portfolio strategy
* Eliminate, phase out or sell low-value products
* Counter feature creep

Discipline business and governance processes:

* Create well-defined decision structures
* Streamline operating processes (planning, budgeting, etc.)
* Involve employees at the grassroots level

Simplify personal patterns:

* Counter communication overload
* Manage meeting time
* Facilitate collaboration across organizational boundaries

Engaging your team members in this simplification exercise can reap you large rewards. “At Nortel, employees generated 3,000 simplification and improvement ideas, implemented 900 and saved $14 million”, according to the HBR article.

In our desire to reorganize and function more efficiently, let’s not forget the useful reminder of K.I.S.S., or “Keep it simple, stupid.” A phrase that comes to my mind frequently for me is “Less is more.” Whatever reminder works best for you, make it a priority in the new year to simplify.

Have a great week!


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