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We're living in a frighteningly complex world, and the technology that we've embraced to make it simpler has only made things worse. That's the premise of "Simply Effective: How to Cut Through Complexity in Your Organization and Get Things Done," a new book by management consultant Ron Ashkenas. He's no stranger to complexity, having labored to overhaul some of the world's biggest corporate bureaucracies. Ashkenas, managing partner of Robert H. Schaffer & Associates (www.rhsa.com), has previously written books about the experience of implementing the innovative program known as Work-Out at General Electric Co. Now, he tackles the larger issue of how managers can reduce the complexity that creeps into every large organization over time.
Ashkenas sees four sources of complexity that are common to many businesses: organizational structure, product proliferation, process evolution and general management behavior. They all add up to the "stuff we take for granted - when we don't hold the mirror up to see that we're creating complexity ourselves."
The issue of corporate structure evokes the age-old nemesis of organizational silos. Too many companies function as a series of discrete functions that jealously guard their people, their data and their quasi-independence. The problem grows worse when mergers and acquisitions enter the picture. Ashkenas cites the case of ConAgra Foods, Inc., whose chief executive officer Gary Rodkin discovered that he had some 100 brands, all running as semi-autonomous companies, each with its own marketing and supply chain organization. Rodkin reassembled the company into a series of brand management teams which cut across disciplines. Jack Welch took similar steps at G.E. 20 years earlier, when he reorganized hundreds of strategic units into 13 major businesses. Now, with merger activity temporarily dampened by the recession, "this is a great time for managers to take a hard look at their structure and ask if it can be put together in a simpler way," says Ashkenas.
Product proliferation can cause headaches for consumers and supply chain managers alike. Who needs dozens of versions of a popular toothpaste, laundry detergent or sandwich cookie? A few big retailers are starting to cut back on the number of SKUs for branded merchandise, but confusion still reigns in the supermarket aisles. "You walk into stores," says Ashkenas, "and there's just too much choice."
In the age of "mass customization," buyers get precisely the product that they want, down to the smallest detail. At one point, Herman Miller was offering more than 4 million versions of its popular Aeron office chair, Ashkenas says. Upon discovering that only about 4,000 variations were being ordered with any frequency, the company reduced the options to a more manageable number.
"It's about trying to find the right balance," says Ashkenas. "It's not about going back to the Henry Ford era. But let's be clear about what are the implications and what are the costs [of choice]. Are we making it more confusing for our customers?"
Business processes tend to grow in complexity as they mature. Lean and Six Sigma initiatives have streamlined aspects of some organizations (although the programs themselves are anything but simple), but not every task has been subjected to their scrutiny. Areas such as corporate budgeting, information-technology prioritization and human-resources planning remain cumbersome muddles within many companies. Internal bureaucracies create too many steps before key decisions can be made. These "invisible" processes need to be reexamined periodically, Ashkenas says, "instead of dusting off the old one and putting in more detail and controls."
He relates the tale of a large hospital which was able to shorten the time needed to make beds available for new patients, by involving doctors, nurses, housekeeping and billing in a collaborative effort. "Once they were able to get their arms around [bed turnover] as a real process, they were able to take many hours and days out of that process," Ashkenas says, adding that the effort eliminated the need for building a whole new wing of the hospital.
"Simply Effective," to be published by the Harvard Business Press, will be available through the usual retail outlets and online sources later this fall.
- Robert J. Bowman, SupplyChainBrain
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