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metric to guide development and marketing decisions will prevent you from getting into the wrong businesses in the name of growth Where are the roadblocks that can prevent your complexity leader and his/her team from carrying out their work In the short term, what measures are required to facilitate change What about long term Revisit your Complexity Profile If you re in a product-oriented company, what is the average part count over time What are your reuse metrics These were metrics that Toyota, Scania, International Power Machines, and effectively Capital One used in their own war on the cost of complexity to sustain performance Create your own reuse metric appropriate to your business A services-oriented company has the same issues, and the effects are often worse We worked with one business services company that had undertaken a review of its professional services offerings and found 300 offerings but only 10 to 20 distinctly different practices In their environment, it was incredibly easy to create a new professional service offering with little thought given to reuse or retiring obsolescent practices Many companies sales and marketing teams are compensated largely or solely on sales, no matter what degree of customization they have to offer your customers, and this compensation plan has produced high complexity levels It is futile to embark on an offering-reduction program without also tackling the root cause Conversely, in an operations-dominated organization, if cost becomes the only measure of success at the expense of participation in a new profitable market, incentives are misaligned Attacking the root causes of incentives and cultural norms is a far more powerful way to attack complexity than looking for a one-time hit Look closely at any incentives, policies, and practices that drive complexity-creating behavior, and make the necessary changes
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Cultural Ingredient #7: Nurture close customer connections
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Clearly one of the reasons that companies become overly complex is that they do not know what customers want or are willing to pay enough for to allow for positive EP A big mistake that companies make is assuming
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14: Creating a Culture that Can Conquer Complexity
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that gathering Voice of the Customer data is a one-time event rather than a continuous process The establishment or development of strong interfaces to capture the Voice of the Customer is vital to guard against the introduction of non-value-add cost, as well as to tap into potential growth areas As we discussed in 3, the increase in the number of communication nodes and layers in your organization can slow the transmission of information from the market The information is out there and it is in the minds of your customers The methodologies in 10 can be very powerfully applied to understand what customers are telling you what they value, not just what they want Establish channels to gather this information on an ongoing basis
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Complexity is spawned in every corner of your organization, and bringing it under control will take systemic, cultural changes It cannot be conquered by isolated efforts, even if they are led by knowledgeable, committed individuals Approach complexity as you would any major change, making the imperative clear to everyone in the organization What does conquering complexity mean to a sales person Delighted customers, shorter lead times, higher retention What does it mean to your product or service designers Less time wasted reinventing wheels; more time available for truly differentiating features What does it mean to product development A shorter development cycle, fewer suppliers to manage Make it relevant to the entire organization and make your commitment visible
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1 Durward K Sobek II, Jeffrey K Liker, and Allen C Ward, Another Look at How Toyota Integrates Product Development, Harvard Business Review, July 1, 1998 2 See Michael L George, Lean Six Sigma, 5, or George, Lean Six Sigma for Service, pp 22-23 3 Winston S Churchill, The Second World War, vol 1: The Gathering Storm 4 Kevin O Toole, Keeping it Simple, Airline Business (Reed Business Information, UK), September 1, 2002 5 Theresa Metty, Next-Generation Supply Management (keynote address from the 88th Annual International Supply Management Conference, Nashville, TN, May 18, 2003) 6 George Group Executive Roundtable, Waldorf-Astoria, December 4, 2002
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