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Managing Complexity for SMEs

Complexity made simple

The Rubik’s cube was launched across the world in 1980 as the most difficult puzzle ever with more than a billion possible variations across its six sides.

What makes a Rubix Cube difficult? Simple, every time you move a side to line up a colour it moves something else on another side. Simple yet incredibly complex. The key was to find a reference point from which you could solve the puzzle. The reference point was difficult to find but once found, solving the most complex puzzle of the century became possible.

The Rubix Cube is a perfect analogy for business. Whilst an end product or service may be simple, the sheer number of moving parts, such as human psychology, processes, logistics and paperwork makes the number of possible ‘moves’ as great as a Rubix Cube.

The perils of complexity

‘Business’ has tried to solve this by the introduction of compliance, technology and high speed communication but the complexity of running a company is ever increasing, with new technology, globalisation and customer demand. This complexity can be overwhelming. History is full of disaster stories where complexity takes what appears to be a robust system and turns it to dust in a heartbeat. The Air France disaster of 2014 is probably the best known example of this. The pilots had to make the right call based on contradictory information, failed systems coupled with Air France’s approach to risk management and a crash resulted. This means that making the right call is very difficult without hard, unbiased and non contradictory data (even in life and death situations).

The SME challenge

For SMEs, complexity can result in problems such as low moral, poor quality, high staff churn, leadership misalignment. These are all signs that the system isn’t functioning. Many business leaders recognise that problems exist but just like the pilots of Flight 447 making the right call with poor, contradictory or misleading information is a huge risk.  This is why so many businesses fail.

Current business improvement solutions

Sometimes businesses turn to third party consultants for help and advice. That is if they know where to look and have pockets deep enough to engage them.  These consultants spend considerable time and energy trying to gather enough information to provide some direction to fix business issues. However this is also high risk. Consultants are only human with their individual motivations, inherent bias, desire to win business and a filtered view of the world. Moreover, the issues that arise will be symptoms of some other interconnected problem.

For example, consider what happens when a business appears to have a culture issue. Poor culture doesn’t just happen – often it’s a direct result of something else;  for example, a leadership issue or poor process management. Bringing in a expert to fix the culture is doomed to fail. In addition, expecting a culture expert to be able to find analyse and fix an inter-related problem such as process management isn’t realistic.  Without the correct data and root cause, problems will soon re-emerge. In short seeing Symptoms as Causes is a major challenge.

So what can an SME or any other business do?

‘Solving’ Complexity

Accept not all complexity is bad – complex systems can create wonderful things and in these cases it’s the complexity that is key (the human nervous system for example).  Don’t try to manage everything or you’ll fail, but understand everything is connected.

Always seek simplicity where it can be found – Can each part of a complex system be made simpler?  So be curious and always ask if it’s a simple as it can be and if not, what can be changed without breaking something else.

Create a big picture – The end goal is the most important where it’s a product or a service. There is a balance between focusing the attention on what’s most important and getting over burdened with small details that can stop the flow of the operation.  Bureaucracy has a tendency to do just that.

Plan your delivery (but have a plan B and a Plan C) – Be dynamic in planning.  Assume it won’t be perfect first time so back up is important.  Having a good plan is more than just about execution as it allows a business to scenario plan as it goes and makes a business answer the ‘what if’ questions.

Create ownership of each part of your plan – No ownership means no accountability and no decision making and as a result probably no delivery.

Empower those at the operational level to make things work better – Business leaders can’t be everywhere.  Use the expertise you have, especially operational expertise.  They will see things differently to the leadership and see individual parts of the system that the leaders can’t. They may have solutions leadership has not thought of nor is able to see.

Fail fast and fix – Make decisions, don’t expect perfection and don’t call it failure.  Paralysis by analysis creates stagnation and missed opportunity. An SME is successful if it adapts quickly and is flexible.  That means an idea or a process may work one month and then not work the next. Make a decision, learn from it and then move on.