Is Your Business Too Complex to Succeed?
In 2012, U.S. businesses face challenges at every turn—from the opportunities and pitfalls of globalization to ever-changing federal legislation like Sarbanes-Oxley. All too often, the response has been to make processes within the organization more complicated, rather than less. Some large companies have created so many internal layers of structure and reporting that they become virtually ungovernable, and therefore under-performing and unprofitable.
In a 2010 poll of more than 1,500 chief executives, IBM’s Institute for Business Value found that the primary challenge most CEOs face today is “the rapid escalation of complexity.” Most of the chief executives surveyed (80%) predicted greater complexity in the years ahead, while less than half claimed they were ready to deal with it.
What are the major symptoms of unwieldy organizational complexity? Ron Ashkenas, managing partner of Schaffer Consulting and the author of Simply Effective, offers a four-pronged diagnosis:
1. Organizational structure. In your business, how many layers of reporting exist between the CEO and front-line staff? If the answer is more than seven, Ashkenas says, the structure is more complex than it needs to be.
2. Products and services. If your products are in continuous need of “refinement,” if market research suggests the need for an ever-increasing array of new product features, chances are your manufacturing and marketing systems are rarely in alignment—a costly and perhaps redundant situation that cuts into the bottom line.
3. Processes. Whether spurred by new legislation or changes in leadership, business processes like budgeting, performance and customer relationship management tend toward increased variability. In other words, processes are unpredictable and things can quickly spiral out of control. Worst-case scenario? Inefficiency in business units across the board.
4. Managerial habits. Poor leadership at the managerial or supervisory level generates meetings that never provide measurable action steps and/or requests for reports and information that divert staff from actual work and create bottlenecks in productivity.
It’s a simple formula: Complexity kills alignment. Lack of alignment kills execution. Lack of execution kills growth.
Getting Back to What Makes Sense
Businesses afflicted by these errors often fall by the wayside, unable to find their way out of many-layered complexity. On the other hand, companies that embrace a simplified approach learn to measure and manage their core business functions—finances, operations and employees—with cost-effective and time-efficient strategies.
CNC Strategy Cloud Solutions offers an alternative to expensive, time-consuming “strategy sessions” that attempt to address these problems but in reality suck valuable resources away from core business functions.
The CNC Strategy Cloud Solutions S3 process (Simple Strategic Solutions) involves easy-to-complete diagnostic questionnaires and scorecards that highlight your business strengths and opportunities. These cloud-based “snapshots” assess how well your organization is aligned, measures deployment of your strategic assets—finances, people, information—and transforms strategy into execution.
We want to help you align your strategy and execution so you can eliminate organizational complexity and focus on what’s truly important—maintaining and growing your business.
Tell us about your current biggest problem and what stands in the way of implementing your vision and strategy. We can help.
