13 Mar 2018
Simplification is difficult. We often see organizations struggle with complexity. The problem is, most complexity is self-inflicted. To fully understand this, it is important to zoom in on three factors: the way to further stretch the reduction of layers, a tendency to emphasize roles (while design could be based on teams in the first place), and a new complexity arising from the need to incorporate an increasing number of specialists into organizations. With these factors at play, the question is: How do you achieve simplification?
Simplification journey: where to startIf you want to get simplification off the ground, a powerful approach is to think in terms of horizons. The mid-term horizon represents the senior level at which people plan ahead - depending on your industry, this may be 3 to 5 years or 5 to 10 years. Of course, there are also teams that deliver near-future results within the coming 1 to 2 years. They are concerned with the annual horizon. Finally, the term 'next-day horizon' refers to teams delivering the best possible next day, week, or month.
Thinking in horizons is particularly powerful, because it allows you to explicitly clarify who is working on each 'best possible next day,' who is creating and delivering an annual plan, and who is leading beyond that.
The right mindset: teams first, individual roles laterOnce you've gained clarity regarding the goals and means on each horizon - information that is usually already at hand - you can define what the integrated teams on the respective horizons are set up to deliver. By thinking in teams rather than individuals, you break through complexities that have emerged for no good reason, such as a split between demand and supply, a hybrid of project and line roles, or a complicated 'internal-client-versus-internal-supplier structure' (remember that there is no such thing as an internal client).
If you build integrated teams around each horizon and empower them to do their job, the guiding principle will be trust rather than control. As trust is inherently more efficient than control, your teams will flourish as a result.
Well-thought-out team goals and means give rise to a clarification of the roles within each team. Who brings what to the table? How do individual contributions relate to the overall team goals? What is the rhythm of the input and output's flow? Which checks and balances are in place within the team?
Briefly put, a design along the lines of horizons and teams will challenge existing complexities, secure the empowerment of teams in your organization, and break down current walls that don't have to exist at all.
How to make the contribution of increasingly important specialists flowWhether in the commercial area, supply chain, production, IT, asset management, or engineering, we see that specialists are in high demand. As the latter tend to clump and stick together, specialization can be a source of complexity that needs to be dealt with. From data scientists, digital specialists, pricing specialists and forecasting specialists to, say, bridge or tunnel specialists in asset management: their respective contributions are specific and valuable. Oftentimes, however, it is tricky to make their contributions flow throughout the organization.
Our advice: stretch the introduced design principle even further and add specialisms to integrated teams rather than running them as separate programs. Of course, a programmatic approach can boost short-term results, but it is crucial to remember that it does not secure a true embedding of these capabilities. This will happen if you incorporate specialism into your integrated business teams - especially in pivotal business areas. This also gives rise to a different question: Which specialism needs to be proprietary and which one should you outsource? We will touch upon this topic in one of our upcoming blogs!