THE CANCER OF COMPLEXITY
©John L. Mariotti 2008
Companies all over the world are in danger, and most of them don't even know it. The reason cancer is such a deadly disease in the body is because normal body cells run amok, multiplying wildly and disrupting the function of other, normal cellular functions. This is exactly what happens with complexity in business. It consumes time and money, weakening the organization, and meanwhile going largely undetected, until it's too late.
Like the most virulent cancers, by the time complexity's damage is noticed, it has already advanced its attack and become harder to contain and cure. The secret is early detection, rapid treatment and vigilance in watching for any recurrence--just like cancer.
The problems of complexity started emerging in many places more than a decade ago. As more and more companies struggled with complexity, and its wasteful effects appeared in more and more situations, a pattern became evident. In a quest for high growth in low growth (or unfamiliar) markets, companies often took the apparently easier approach and proliferated everything. The marching orders were to "sell more new products, to more customers, in more places," and so they did.
The problem is that growth comes from truly great new products and not through mindless proliferation. Growth and great new products/services are the result of true innovation, which takes time and money--the very resources that complexity consumes and wastes. The new markets entered are only new to the company entering them, not to the incumbents currently entrenched in them and ready to defend them.
Ironically, the approach to understand, find and expose complexity is not all that difficult. Like diagnosing cancer, complexity requires knowledge about how to look, and where to look and what to look for. Also like cancer, the treatment in the early stages is simpler and less damaging. Late stage cancers are often inoperable or untreatable; the same is true of complexity, once it has overcome a company and crippled it.
The challenge is to recognize both the symptoms and the most common complexity hiding places then recognize typical early-stage symptoms. Unlike cancer, the solutions are often fairly simple: find complexity, and then drive it out--or use it for competitive advantage. Fortunately, there are also more elegant (computer-based) solutions to treat more complicated problems. The most perplexing question is, "Why don't more people see this problem and decide to address it?" The answer, perhaps, is also like a cancer case: They are in denial.
Unfortunately, many industries are suffering in the late stages of the cancer of complexity. One industry in particular, commercial airlines, comes to mind first. It's no coincidence that the most consistently profitable and best-service airline is the one with the least, best-managed complexity: Southwest. Mergers like the Delta and Northwest transaction actually make the complexity worse, with more different kinds of planes, many of them aging, to manage and replace.
U. S. automakers have been struggling with complexity, and are just now starting "treatment." GM still has too many brands and fears the costs and backlash of reducing them. It should fear more the consequences of not reducing complexity. For example, GM typically has as many as two-dozen different components (like door handle assemblies) whereas Toyota has only a few. Ford is already trimming complexity aggressively, and there are glimmers of hope for it, as evidenced by its improved quality. Less complexity almost automatically leads to better quality and lower costs. Chrysler admits it too has many models, but can it cut fast enough? All three have dealer networks far larger and more complex than they need (serving too many brands). Even the vaunted Toyota production system has shown some "cracks" in its quality as its rapid global expansion has added complexity in its new model introductions and rapid time-to-market.
When will your company wake up to the presence of this virulent form of cancer? Are your people drowning in work, never able to catch up? Are deadlines missed often; are budget overruns common? Are quality, service and profitability suffering from complexity? Don't wait until the cancer of complexity become too advanced Ð metastasizes Ð and makes it too late to remove the damaging growth and treat its residual effects?
Even many highly regarded companies are just now realizing that in spite of their continued growth in sales and earnings, something is wrong under the surface. And they'd better find it, and fix it or it will hinder them for a long time to come.
If you think industry is the only place afflicted with the cancer of complexity, check out government. With almost 90,000 governmental units in the U. S. alone, complexity is crippling our public sector governments faster than it is the private sector. And no one is even paying attention to it.
Now is the time to act. Recognize the cancer of complexity for the huge problem it represents. Find it; fix it; either "use it" or "lose it." Additionally, for every company that recognizes the problems of complexity, there are dozens of suppliers also suffering from it. Their waste is huge. Their disruptions are great. Their urgency is also extreme. Will you act fast and save your company? Or will you be one that succumbs to the cancer of complexity.
John L. Mariotti's newest book The Complexity Crisis--Why Too Many Products, Markets & Customers Are Crippling Your Company-And What To Do About It released early in 2008 and is available for ordering now--in quantity from www.800ceoread.com, --or in single copies from www.amazon.com, and other leading booksellers. Mariotti is formerly President of Huffy Bicycles and of Rubbermaid Office Products Group and now President & CEO of The Enterprise Group. He has written eight books business books and hundreds of articles and columns. John serves on several corporate boards, advises companies and does public speaking. He can be reached at www.mariotti.net.
