Advisor insights from the field

Capitalizing on Complexity

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In my last post, I referred to the IBM study entitled Capitalizing on Complexity.  Here is another quote from that report: “…one set of organizations — we call them ‘Standouts’ — has turned increased complexity into financial advantage over the past five years.”

Complexity can certainly present trouble, but it also presents opportunity.  I see four ways in which your organization can capitalize on complexity:

  1. Prioritize.  Focus your organization and its resources on the best few areas.  Many of your competitors will waste precious resources trying to deal with too much.
  2. “Procedurize.”  Simplify processes by creating repeatable steps and/or integrating activities across the organization.
  3. Reorganize.  The organizational structure that worked in a different time and environment may not be the best fit for the current reality.
  4. Monetize.  Once you solve a complexity issue, share that solution with other businesses for a service fee.

Each of these is a form of innovation that either strips complexity out of the organization or creates new, more effective ways of managing complexity.  At a minimum, they will bring about cost savings, but in some cases, they will even generate additional revenue.

In short, don’t shy away from complexity!  It’s only going to increase, so you might as well use it to your advantage.  Some organizations simply charge their customers for increased complexity, but that’s the easy way out.  With a little fortitude and creative energy, you can capitalize on complexity to benefit both you and your customers.

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