We all admire a leader who can simplify a complex problem into an understandable, simple, explanation of the essential elements. We are motivated by the leader who can set out a clear, concise solution to a complex problem. Ultimately, in the best companies this leads to a simple, clear strategy for success.
Paul O’Neill was appointed CEO of Alcoa in 1987 to turnaround the troubled aluminum giant which had a market capitalization of $3 billion and falling. By the time he retired in 2000, the market capitalization had grown to $27 billion. In his first, keenly awaited speech in a ballroom in New York, in 1987, he stated one simple objective that would energize and focus his management and staff for years to come – the company would transform one thing above all else – safety. By focusing on a subject no one could disagree with (the track record on fatalities in the workplace was not good), by focusing on one specific agenda item, he was able to drive a change in mindset, a transformation in efficiency, a complete turnaround in profits and a safety record admired around the globe.
Now having said that, it is important to be careful. HL Mencken, the legendary American journalist put it so well: “For every complex problem, there is an answer that is clear, simple, and wrong.”
It takes great insight, know-how, experience and intellect to understand the complexity of many business issues. But it is possible to strip down the problem into the essential elements to allow a practical, simple solution to emerge. The simplicity doesn’t make it right. It’s the specific deep domain knowledge of that space, mixed with great insight, curiosity and a burning ambition to crystalize an answer that often leads to the simple solution being right.
A few years ago the WSJ ran an article titled “Speech of the Year” which highlighted a speech delivered by Jackson Hole, a Bank of England regulator. The thesis of his speech? The dog and the frisbee. Basically Jackson explained, border collies can often catch frisbees better than people, because the dogs by necessity have to keep it simple. He went onto explain that banking regulations are way too complex to be effective.
For example as Bear Stearns was about to be rescued in 2008, it was actually compliant with complex regulations. Complex regulations that were clearly ineffective.
The simplicity thesis was covered again last week in the WSJ, in an article discussing Professor’s Hansen at the University of California’s new book, “Great at Work: How Top Performers Do Less, Work Better, and Achieve More.” In 2011, Professor Hansen conducted a five-year survey of 5,000 managers and employees, including sales reps, lawyers, actuaries, brokers, medical doctors, software programmers, engineers, store managers, plant foremen, nurses and even a Las Vegas casino dealer. Two major conclusions from the research were selectivity and simplicity. As the article explains, the highest performers carefully selected which priorities, tasks, meetings, customers, ideas or steps to undertake and which to let go. We should no longer take it as an automatic compliment to hear that we’re “hard working.” Hard work isn’t always the best work. The key is to work smarter.
Translated to the workplace, the research suggests according to Professor Hansen, “that we should seek the simplest solutions—that is, the fewest steps in a process, fewest meetings, fewest metrics, fewest goals and so on, while retaining what is truly necessary to do a great job. I usually put it this way: As few as you can, as many as you must.”
Is complexity getting in the way of your leadership performance? Consider the following:
- The story on your web site is verbose, rambling, jargon filled and confusing.
- Your sales scripts and engagement strategies with your prospects are peppered with complex features and terminology, way above the understanding of your audience.
- Leadership gives conflicting, complex messages to their staff making it impossible for them to assess priorities and resources required.
- Responsibilities for projects are shared, leading to missed deadlines.
- Dozens of minor tasks suck up precious resources while the big audacious goals are missed.
Simplicity Wins Every Time
- As the leader, please ensure you communicate your positioning to the whole company. What are you going to be #1 at? What are you going to be remarkable at? People are motivated by simple, believable goals.
- As the leader, you believe in Customer Service. Well, structure the company in such a way that proves you believe in it. Appoint a Customer Happiness Manager/Customer Support Manager. Create a concierge level of service. Give clients a human being to reach out to. Technology can be marvelous but offering “Humanity” is a game changer.
- Build a product or service that’s easy to understand.
- You want to motivate your sales team with a great commission plan. So far so good! The next step? Keep it simple. Every sales professional should be able to instantly understand (perhaps using a simple little table) their exact paycheck.
- Prospects have complex problems. But you don’t solve them by delivering complex questions. You ask diagnostic simple questions to get to clarity quickly.
- The product road map has a plethora of opportunities ahead of it. However think simplicity in terms of building the product, selling it, using it. Remember you are building the product to be used not to win an award.
- Big data thinking drives us all to imagine a million things to measure. The problem with measuring everything is that you end up managing nothing. Keep metrics measurement down to items that you want to manage. Allocate one person to cover each family of key metrics, to manage, to correct or at least to flag up to management that there is a problem.
- Financial management can be a complex affair. Don’t let it be. Understand the answers to these basic questions then get sophisticated:
- Why did sales miss target this month?
- What cost increases materially affected margins and why?
- Why was cash at bank below what I predicted at the end of this month?
- What Trailing 12 trend line covering any major financial metric worries me?
- What customers did I win or lose last month and why?
- For any income or expenditure item that exceeded budget by 5%, what were the volume and yield reasons behind the result? eg engineering payroll was higher by 7% or $35,000 because the salary (yield) of 5 software engineers was inflated by bonuses.
- After every meeting whether it involves two or 22 people, ensure there is a set of actions with ownership.
- For all challenges within your business decide whether it merits being tagged as a Project. If it does further define five things: Project Manager, objectives, success criteria, resources and timetable. Simple.
Simplicity is the key. You are either remarkable or invisible. Your choice.
The Portfolio Partnership (TPP) is an operational consultancy that scales businesses organically and by acquisition. All of our work has two common themes, we deploy our services through a Fractional C-Suite model using our successful tools and process that we know work. Our desire to work with a client is based on the ambition, openness and humility of the management team and rarely the sector. Ian@TPPBoston.com.