Why it's HR's job to kill organisational complexity

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Adam Howe is the founder of Stop., a simplicity consulting and training business. Stop. simplifies organisations by eliminating unnecessary complexity.

Jamie Lawrence, Editor, HRZone: What do you mean by simplicity and complexity?

Adam Howe, Founder, Stop.: Organisations are, by definition, complex systems. Some of this complexity creates value (e.g. a new product), whilst some complexity consumes value (obsolete KPIs).

We care about the unnecessary and harmful complexity which gets in the way of the things which really create value. These are the activities which make companies win and gets individuals promoted. It’s a dynamic picture which needs continual evaluation – what was highly valuable yesterday might be less valuable today.

It can be useful to look at complexity through the 3 lenses:

  • Sources. Complexity comes from external sources (e.g. regulation) and internal sources (e.g. management behaviours). The vast majority of complexity is created inside organisations
  • Symptoms. Harmful complexity is generally visible as time spent on frustrating day-to-day activities (e.g. administration, processes, reporting information, meetings)
  • Impact. Complexity impacts how time is used, how engaged people feel and how organisations perform

When you have simplicity, it’s easy for organisations and their people to do the things which really matter.

Jamie Lawrence, Editor, HRZone: What are the day-to-day symptoms of too much complexity in the workplace?

Adam Howe, Founder, Stop.: Complexity is visible in organisations as day-to-day activity and how people feel.

In terms of activity, what are people spending their time doing? That’s usually the first question we pose to the managers and leaders we work with.

Almost without exception, the most two most frequent answers are meeting and emails. People can spend 75% of their week on those two activities.

Now that’s not to say that all meetings or emails are bad, that’s clearly not true. But on the flip, much of that time could be better spent – a Bain study estimated up to 50% of time on both is unnecessary.

It’s not just meetings and emails: complexity means activity on things like management reporting, using IT and systems, complying with processes, procedures and policies, chasing decision sign, communication between teams etc etc.

And then there’s frustration. People get frustrated by complexity. How many times do people talk about things at work being a ‘waste of time’? Or how  it’s ‘really hard to get things done’? The employee survey often has a question on ‘how easy is it to get things done?’. And more often than not, that question scores badly.

In terms of activity, what are people spending their time doing? That’s usually the first question we pose to the managers and leaders we work with.

At its simplest simplification, or complexity reduction, is actually activity reduction.

Jamie Lawrence, Editor, HRZone: Why does complexity persist as a problem when we spend so much money trying to improve processes and improve business?

Adam Howe, Founder, Stop.: There’s a paradox here. It’s in our human nature to adapt, to improve, to evolve, to progress. But often when we try and improve something, we actually add more to it and make it more complex.

That’s not to say innovation is bad. It isn’t. But as data has become more accessible and communication through electronic means easier, there’s a temptation for more.

This is not about efficiency, lean or business process engineering. This is about changing long standing, deeply embedded cultures. It’s about fundamentally and constructively challenging what an organisation does. And as with any culture change, that requires time, resources and energy.

Jamie Lawrence, Editor, HRZone: What is the business impact of complexity?

Adam Howe, Founder, Stop.: Complexity impacts business performance in several ways. It wastes time, it wastes money, it frustrates people and it decreases agility.

There is an increasing amount of research on why being simple wins.

For example:

  • Organisations with lowest complexity grow 30% - 50% faster than their average competitors
  • Complex organisations are three times more likely to have disengaged people
  • A study by Warwick Business school showed that the world’s largest 200 companies wasted 10% of EBITDA per year because of complexity

The metric I am most keen on is time.

Organisations have a limited time budget and it’s up to them what they do with it. If your collective time is spent satisfying complexity, you are not speaking to customers, changing or innovating.

It’s the basic theory of opportunity cost: to do more of one thing, you need to do less of something else.

Jamie Lawrence, Editor, HRZone: It seems so simple to make things simpler. So why is it so hard?

Adam Howe, Founder, Stop.: The concept is simple, but the execution is anything but. Steve Jobs famously said “Simple can be harder than complex… but it’s worth it in the end, because once you get there, you can move mountains”. Not for the first time, he’s right.

Firstly, there’s the status quo. Old habits die hard! It takes courage to explore ‘what could be’ or a very hot burning platform to challenge and change what’s always been done.

It’s the basic theory of opportunity cost: to do more of one thing, you need to do less of something else.

People are used to complexity. We feel it, we are frustrated by it but we don’t know any other way. We see it as ‘just the way organisations are’. And then there are other competing priorities which, ironically, if you got rid of the complexity the organisation could do more of.

Secondly, our definition of simplicity is actually about doing less - simplicity by subtraction - to achieve more.

We want to cut the clutter and get to the stuff which really matters. But doing less is counter intuitive and against our human nature. We like more, more, more. So to ask people to do less requires a big mindset shift.

And lastly, simplicity is loosely defined, so it’s not always clear what an organisation is trying to achieve and why. This isn’t just about making an isolated process more efficient, or divesting a poorly performing business. This is about systemically identifying and eliminating unnecessary organisational complexity and the low value activity it creates.

Jamie Lawrence, Editor, HRZone: How do you increase simplicity in organisations? Are there particular processes to follow?

Adam Howe, Founder, Stop.: As with any change intervention, you need a clear goal, a reason for changing, senior sponsorship and so on and so forth. Once you have the conditions for change, the process for simplicity is as follows:

  1. Look honestly at what the organisation (or team) currently does. And be honest.
  2. Be clear on what really matters to that organisation. What do we want our people doing to achieve our goals?
  3. How does our effort align to value? We encourage our clients to categorise what happens day-to-day by:
    1. Critical, strategic activity – these are the things which really really matter. You goal is to maximise bets here.
    2. Necessary but not strategic activity – you need to do these things but they aren’t critical to the strategy. These are things which should be simplified in order to minimise the organisation’s effort.
    3. Finally there are things which are unnecessary – they add no value. They might have done at some point but they no longer do. These should be stopped.
  4. Once you have a list of activities which could be stopped or simplified, you need to prioritise what you change. This is a simple exercise of yanking and ranking by impact (by time, money and frustration) and the effort to change.
  5. Once you are clear on what to change, you then need to understand what is causing the complexity. And then, with that in mind, design a simpler alternative. We like to use design thinking and zero basing in this step. For example – this marketing management report is complex. What value does it need to create? For who? And why? If the company was to start again tomorrow, how would we design that? This is about disruption and innovation – creating many new ideas for simpler working.
  6. Once we have agreed those ideas, it’s then about testing and experimenting with them in the organisation. For example, this month, we’ll pull the sales meeting and see what happens. If we can free up 20 hours of net sales team time, what’s the impact? Do we sell more? Do people miss the meeting? What do they miss?
  7. And once we have tested, we agree a simple implementation plan, we measure impact, we guard against complexity returning and share learnings across the organisation.

Jamie Lawrence, Editor, HRZone: What is the human side of making organisations simpler? How do you get peoples' buy-in and how do you help them understand why it is so different from 'business-as-usual?'

Adam Howe, Founder, Stop.: The human side is critical. If you only address the complexity symptom – the processes, the meetings, the way KPIs are reported – the fix will be pretty short-lived.

Why? Because all internal complexity ultimately comes from the behaviours and decisions of people. If you want sustained simplicity, you need to change behaviours, mindsets and habits.

You get buy-in from people by actually changing the things which waste their time and frustrate them.

All of sudden the policy deemed as archaic has gone, the performance management process which used to take 20 hours a quarter now takes 2 hours. And you have more time. More time for innovation, more time for your team and perhaps more time for your family.

You get buy-in from people by actually changing the things which waste their time and frustrate them.

It’s different from BAU because simplicity is an ongoing process. It’s a way of working. It’s about enabling your people through a simplicity playbook to continually look for and remove unnecessary complexity. Think of it as pruning the garden this time of year. New flowers cannot bloom if the garden is full of weeds.

Jamie Lawrence, Editor, HRZone:  Why should HR own the process of making organisations simpler?

Adam Howe, Founder, Stop.: Because this about what happens in the organisation day-to-day. It’s about what an organisation and its people do and do not do. The issue is people-based and the solution is people-based. It’s about creating a process where everyone, from the CEO to the frontline employee can call out complexity when they see it and redesign work to be simpler.

They will need support from the business, ideally from the CEO, but HR need to own the process. Without HR owning this, the focus will start and stop at fixing isolated efficiency problems. It will not become a de facto way of working.

And the great thing? In an evolving space, HR can be the hero. They can take credit for changing what frustrates people and take credit for getting people working on the meaningful work which will ultimately drive the organisation’s success.

Jamie Lawrence, Editor, HRZone:  What are some easy ways people can reduce the complexity in their work lives by themselves? And do you have examples of what organisations have done?

Adam Howe, Founder, Stop.: On the individual level:

  • Leaders can create personal capacity and empower their teams by pushing decisions down a level to their direct reports. They can send one of their  reports to a meeting they always go to, or decline it all together.
  • Managers can experiment with only checking their emails in two windows per day – and having a line on their email signature which makes that clear.
  • Frontline staff should be given the permission to call out complexity which falls on them from above – a throw away comment from a Manager can lead to days of work.

On the organisational level, I’ll give you some examples of what other organisations have done.

  • Home Depot: store managers were issued with ‘anti-bullsh*t’ stamps which they could apply to paperwork which they deemed complex.
  • General Electric: all decision sign-offs have been simplified to two people – the boss of the person who needs the decision made, and the boss's boss.
  • Ferrari: has introduced an email plug-in which prevents an internal email from being sent to more than three internal people.
  • Leading UK retailer: we’ve worked with them to simplify their management reporting by running an experiment where we stopped all management reports for two weeks to see what information was missed.
  • Financial services client: we helped them experiment with decision-first meetings. The chair lays out their proposed decision on the meeting agenda, next to each agenda item.

About Adam Howe

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21st Apr 2017 10:33

I agree. Similar to my perspective on the future of HR as 'Organisational Usability': https://www.linkedin.com/pulse/future-organisational-usability-nick-shac...

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