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A New Approach to Addressing Business Complexity

Business complexity is rising and will continue to do so, while conventional management thinking falls short in this environment. “Hard” approaches that rely on structure, processes, and incentives increase complicatedness and lead to unintended consequences. “Soft” approaches that focus on feelings, relationships, and leadership styles at best deal with symptoms, add to workloads, and don’t sustainably improve performance.

Fortunately, there’s a third way: Smart Simplicity. It provides a differentiated approach to managing business complexity and changing behaviors—what people do and the way people act, decide, and interact. Performance is what it is because people do what they do. With Smart Simplicity, organizations can turn their ability to manage business complexity into a competitive advantage.

Complexity, as measured by the number of requirements companies have to satisfy, is rising steadily. To address each new requirement, companies often set up a dedicated function, create a new process or report, and then build systems to coordinate with existing functions. That leads to an increase in organizational complicatedness, meaning the number of procedures, vertical layers, interface structures, coordination bodies, and decision approvals. All of these internal complicatedness factors have seen a sharp increase over the past decades. This complicatedness hurts productivity and employee engagement.

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