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  • Writer's pictureNigel Adams

Solving Complexity

Everyone wants to simplify. But you must understand the drivers of complexity first!

Simplification seems to be a fairly universal goal these days. This is particularly so among traditional firms with legacy infrastructure and nervous executives carefully watching the encroaching tentacles of new technology start-ups. The symptoms of a complexity problem will be familiar to many: exasperated customers bounced from department to department, improvement projects running late, over-budget and never really delivering what they promise, lengthy time to competency for new recruits as they master all of the process variants, high error rates, remediation programs, overwhelmed staff, lengthy backlogs of change requests with even longer lead times, multiple hand-offs, a high proportion of failure demand work requests, hollowed-out-but-still-there systems, to name just a few.

The consequences are serious: Disenfranchised customers, just one more error away from defecting to the competition; Great difficulty in finding and retaining talent; Struggling to keep pace with the tech start-ups; Knowing the potential cost savings are significant but all too elusive to realise. What To Do?

A typical approach is to start simplifying processes. There are a whole range of tool kits and passionate professionals out there ready and willing to help but something frequently missing is a way to measure the complexity. As we know – “what gets measured gets done” and this can certainly help in the design stages of your simplification program. Failing to test your assumptions about the degree of simplification that is achievable, before getting too far down the path, may lead to disappointment.

How Do You Measure Process Complexity? There are probably more technically correct definitions but I’ve found the following useful:

The logic behind it is simple: anything you do that will reduce the number of steps in a process, the number of decisions an operator has to make, the number of applications they have to learn and apply to run the process and the number of hand-offs in the process will make it less complex. So, similar to the calculation for a Risk Priority Number in an FMEA (Failure Modes and Effects Analysis), multiply out the number of steps, decisions, hand-offs and applications to get an overall process complexity number (PCN). You could also include the number of process variants in the calculation - a frightening thought in most service organisations . In some ways it is a meaningless number but the logic behind it is intuitive. If you calculate the PCN based on both your ‘As-Is’ and ‘To Be’ process, you will get a sense of whether you are making the process simpler.

Job Done? Unfortunately, in my experience, tackling complexity process-by-process rarely yields the material benefits sought by senior executives. Why is this? I’ve found that individual process complexity is merely a symptom of the wider malaise of organisational complexity. Organisational complexity manifests by spawning tens, if not hundreds, of thousands of processes and process variants – a consequence of variation at its worst. Project teams start out full of hope that they will tackle some of their organisation’s thorniest problems but a few weeks later are faced with a serious dilemma: try to tackle the problem at a material level and risk the budget and timeline blowing-out by a factor of 10 plus, or stick to the original budget and timeline and deliver something that, while materially better, is materially insignificant.

What Causes Process Proliferation? A glib answer would be simple: variation driven by a lack of process thinking at an enterprise level. As all of the operational excellence aficionados know, process lies at the heart of everything we do, and building stable, repeatable processes designed for re-use is process 101. But this is not obvious for mere mortals tasked with launching new products, opening new markets, extending available channels etc... For these people the obvious answer is to create a new process to help them fulfil their objectives, not track down the process Tsar and beg for an audience, hoping, beyond hope, that the architectural riches on offer will deliver a simple solution to their problem. As organisations evolve, this bias for action and paradoxical quest for quick wins, leads the organisation down a slippery slope, into the corporate equivalent of Dante’s circles of hell – frozen process and technology spaghetti!

To measure process complexity at the organisational level, a similar approach to the PCN would typically include factors such as the number of: markets and geographies served, segments, channels supported, products and services offered, systems and platforms in production, sites supporting the processes, 3rd parties and partners in the supply chain, operating divisions, and organisational cultures present (typically when an organisation has grown by acquisition).

A high number does not necessarily guarantee that the organisation will be complex. There are many examples of organisations that have operated in multiple markets, offering significant choice to a wide customer base, without suffering the consequences outlined above. One example is a car manufacturer’s use of platforms, where every car rolling off the production line is different to the preceding one, or Chipotle with its almost infinite range of menu options but limited SKUs in the kitchen. However, if the organisation lacks a comprehensive, in-use process architecture, then it’s reasonably safe to assume that the organisation will be complex to navigate and suffer the symptoms highlighted in the introduction.

Following the above approach, reducing any of these factors will, intuitively, simplify the organisation, but clearly this is much harder to do than merely re-engineering a single process. Some of the factors may be locked in such as the markets served. The burden may fall on just one or two factors and, to have an impact, the reduction needs to be significant e.g. the Lego story of halving the number of parts.

What Are The Costs Of Process Proliferation? Horrendous! Unfortunately, they are dispersed amongst the fog of organisational day-to-day operations. They are not all neatly held within a single cost centre called “Organisational Complexity” and trying to put a number on them can be like trying to catch smoke. But they are there. Every process needs to be documented, maintained, quality assured and controlled, audited, productionised, resourced, to have a developed business continuity plan, measured, reported on, enhanced, simplified, re-engineered and automated, to name but a few of the activities required to support a process. Multiply that by the number of processes and, when your bowl of process pasta runs into the tens of thousands of strands, you start to realise just how expensive the lack of a formal (and adhered to) process architecture can be.

What Is The Path To Simplification? In many ways the path to improvement is a familiar one:

However, before stepping on the path, a more fundamental decision needs to be made - to adopt process thinking across the business, with all the trimmings. This means: a process architecture, process model, process engineers, process owners etc. Get this right and then follow the stairway to process heaven!

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