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BUSINESS FIRST September 2012 www.businessfirstmagazine.co.uk


keep it simple,


KATE TOJEIRO EXAMINES WHY BUSINESSES MAKE LIFE SO DIFFICULT – AND COMPLICATED – FOR THEMSELVES.


anagement consultants Boston Consulting Group recently published the results of a 15 year study of US and European


companies. There were a number of interesting findings, among them that the levels of complexity within the organisations they studied had increased anywhere from 50 percent to a staggering 350 percent. The levels of complexity were defined by the volume of procedures, vertical layers, interface structures, coordination bodies, and decision approvals needed. Furthermore, in many of these organisations managers spent 40 percent of their time writing reports and up to 60 percent in coordination meetings. It begs the question how any of them managed to find the time to get any real work done!


In today’s drive for corporate growth, organisational complexity is one of the greatest challenges facing business leaders. In some companies, the development of multilayered structures has become so entrenched that it’s now very difficult for managers to unravel and simplify. For many, these structures materialised during periods of substantial economic growth,


as experienced following the dot-com crash of 2000. The systems and procedures implemented during these periods of growth were designed to help management plan and control corporate performance, improve human resources efficiencies, aid decision making and communication of business issues, and so on. The problem was that these companies were developing so rapidly it rapidly got out of control.


Reversing the trend is far from easy and requires something of a balancing act.


Increasing simplicity and reducing complexity should not be confused with making things easy. The rapid advances in technology we have experienced over the last decade might well have made life easier for many of us but they have also contributed to substantial levels of corporate complexity. A major multinational services firm has experienced precisely this and is now in the process of stripping out the layers of complexity built up within the organisation over the


senior partners told me, it was untenable for his department to wait - sometimes for several months - to get the technology that would enable them to provide the level of service expected by the firm’s clients. He was completely unaware of the difficulties IT staff faced, caused primarily by the levels of complexity within his firm.


For many, this will sound a familiar tune. Layers upon sublayers of management resulting in


last ten to fifteen years. One area that is receiving considerable attention is the IT department. In the past, any changes to the IT infrastructure had to be passed through, and signed off by, several different divisions across a number of time zones before any final decision could be agreed. Not only did this take an inordinate amount of time, it also made life extremely difficult and frustrating for IT managers and their staff. As one of the


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