Copyright 2004 by George Group Click here for terms of use in Software

Painting Code 3/9 in Software Copyright 2004 by George Group Click here for terms of use

valuable); and in many cases they settle for a decision based on executive fiat, an outcome neither side may support Such decisions may leave a lot of the complexity profit pool untapped, as their driving force becomes one of arbitration to keep both sides happy rather than of collaboration to find the best solution that will create the greatest estimated incremental increase in shareholder value As the Celica case study demonstrates, however, it is possible to have a culture where conflict drives innovation not wasted time Conflict is a good thing so long as it is driven by data as much as possible, and by good judgment when data is not available Yes, Toyota has a powerful set of commonized components and assemblies applied across platforms, but such tools are useful only when there are cultural norms that value the control of complexity and its costs Your organization must reach a point where functional silos cease to be an obstacle to conquering complexity, where pet causes are subsumed under the greater good of the organization This will happen when you: 1 Believe conquering complexity is an imperative 2 Require ongoing executive engagement 3 Target high value-at-stake opportunities 4 Dedicate organizational resources 5 Provide an analytical methodology and toolset 6 Align metrics, incentives, policies with complexity goals 7 Nurture close customer connections

The decision to focus on reducing product and service proliferation has led many companies to identify offerings that could be outsourced or deleted It has also led companies to withdraw from certain customer segments or markets in the pursuit of higher Economic Profitability and

overall growth Other companies find they need to expand product or service offerings to reap maximum Economic Profit These types of changes are dramatic for marketing, for sales, for the company as a whole Such changes can lead to market leadership and improved economics But they require significant courage and a strong will to make them happen Resisting the drive to grow through proliferation (more and more options to the customer regardless of cost) is not easy; guiding expansion into new markets or customer segments can be just as difficult To carry it off, you have to believe that conquering complexity is not optional for your business Conquering complexity must be seen as a significant part of your equation for becoming a business with positiveEconomic Profit and positive-growth It must be part of your We can t just stay where we are message In today s fast, global markets, this is clearly not a platitude but a cold hard fact Another component will be the identification and communication of a Future-Back vision: if we can t stay where we are, where are we going It s not just that the status quo will not do; the companies that have conquered complexity are not only efficient and make money, they are exciting companies with bright futures What is your company s Future What might your company look like in 10 years time Now translate that Back: what does it mean for you today What is the pathway of transformation that other companies have taken Emphasizing your goals with a Future-Back message negates many of the fears that can arise with cultural change (There s more on Future-Back visions in 15, see p 302) The ultimate message is we have to do this to become a great company At a minimum, greatness implies positive EP high efficiencies, and , ecstatic customers who love your value proposition Personalize case studies like those in 1 to your business so that everyone understands that, at a minimum, conquering complexity can only propel the company toward greatness