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Complexity, The Internal Struggle

Every company is concerned with growth but normally takes an external view on how to accelerate growth. More advertising. More sales reps. More products. New markets.

However, most companies never look inside their operations for growth, specifically those processes and policies that stymie growth. What if your growth engine could speed up by fixing those processes that are not allowing you to grow and probably frustrating your customers to boot?

Often companies struggle to grow because they are too slow to take action or lack the right insights to drive growth profitably. “The Greatest Barriers to Growth, According to Executives” in HBR discusses several distortions that impede growth:

  • Distortion of Speed: how large organizations can be outflanked by nimbler up-starts.

  • Distortion of Motive: how management systems complicate how meritocracy drives results.

  • Distortion of Time: how management spends its time on the trivia of day-to-day operations and not on customers and key decisions.

  • Distortion of Decisions: how decisions actually are made and by whom vs. how management believes or wishes decisions were made.

  • Distortion of Information: how information gets redacted, reinterpreted and regurgitated as it moves up the hierarchy.

These are all interesting perspectives related to how a company’s complexity can contribute to its subpar performance. However, what are the real causes of that complexity that can be addressed in a systematic, structured way?

We learned many years ago while working for great clients at Accenture how to help clients combat their complexity. We classify complexity into its real drivers:

  • Product Complexity: how product management teams add new products and services to the basket of offerings to stimulate growth but never cull old, unprofitable offerings which rob capacity, reduce speed and increase a bloated cost structure.

  • Process Complexity: how processes evolve over time to become more complex as band-aid after band-aid like new approval requirements, increased quality assurance, and even task specialization all pile on to create a process that is slow and expensive to operate.

  • Organizational Complexity: how growing organizations subdivide into new kingdoms and ever more intricate ways to organize resources which slow decision-making, obfuscate accountability, and even create duplicate initiatives for a given business issue.

It is tempting to believe that these kinds of complexity are rampant only at a mega-corporation like GM or your cable company where complexity typically leads to slower but still upward growth. However, we have seen all of these at smaller, family-owned companies that one would hardly believe to be big enough to be complex. Just as with the large corporations, these sources of complexity rob smaller firms of their speed and profits, but at small and medium sized firms, complexity can present an existential threat.

Axcelion Partners has the expertise and experience to find and eliminate growth-stifling, resource-sapping complexity. Contact us to learn more about how we can help your clients increase their revenues, profitability and cash flow by simplifying their business.

#Complexity #HBR

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