To prepare your organisation for a digital future, it has to move fast at scale. You can only achieve this if you eliminate the complexity from every part of your organisation.
Every organisation leaves a trail behind it. Some new things fail to live up to their promise, some things that used to work become obsolete. Unlike Adam Smith’s Invisible Hand or Darwin’s Survival of the Fittest, no natural force exists to terminate activity within a company. They will linger on dying a slow death – and there will always be someone will always fight for their persistence, avoiding unsettling change or acknowledging failure.
This means that management have to wield the scalpel with their own hands.
One thing most likely to stifle speed is organisational complexity. Choices that made incremental sense add up to a total mess of partners, products, projects, channels, business models, policies, processes, meetings, reports. Decision-making processes designed for achieving global consistency in 1980s multinationals will make you a dinosaur in the 2020s digital future
As important as space in people’s calendars is space in people’s heads. The baggage from action-past sucks your organisation’s time and energy, with the old assumptions and ways holding you back until you can draw a line under your past.
And the easiest way to complete the past is to stop doing it.
List out everything you do. Products, markets, channels, customers, initiatives, systems, projects, policies, processes, meetings, reports. Apply the 80/20 rule. Up the ante through a zero-based approach – “What would you not start now if you weren’t doing it already? What would happen if we didn’t do this?” Bring your people into the discussion, energising them by making it clear that the intention is to create space for the new, not to eliminate jobs.
It is this ruthless simplification process that enables PE companies turnaround underperforming companies, like 3G’s acquisition of Heinz and Kraft. If your company has not done this ruthless organisational simplification recently, you could achieve the same breakthrough.
Your company also needs a “survival of the fittest” mechanism to kill off underperforming complexity. You can count on the budget process to do this for obvious profit bleeders, but what about meetings, initiatives, policies whose costs are invisible to the accounting system? Try a simple rule: For everything recommended to start, something at least as big has to be stopped.
Once organisational space has been created, the new will rush in.