How to Decrease Organizational Complexity

Do You Need to Decrease Organizational Complexity?
Unfortunately, organizational complexity can often be an unintended consequence of business success.  We define organizational complexity as a combination of excessive management tiers, inefficient systems, cumbersome procedures, misaligned performance metrics, confusing role definitions, and cloudy accountability.

Different from institutional complexity related to business model decisions such as geographic reach, product scope, and operational scale, organizational complexity makes it difficult, frustrating, and confusing to get important work done in a way that makes sense.  These complications can become both glaring and hidden barriers to profitability, growth, and employee engagement.

Four Key Steps to Decrease Organizational Complexity
The goal is to identify and reduce unnecessary complexity that has arisen from misalignment between how work gets done and the strategic priorities of the company.  Our organizational alignment research found that solving this misalignment between strategy and culture  accounts for 40% of the difference between high and low performing companies.

1. Clarify Strategy and Align Leadership
   Before the way work gets done – your workplace culture – can be improved, executives need to have strategic clarity regarding what matters most and why. It is almost impossible to meaningfully decrease organizational complexity until leadership agrees upon where the company is headed – ideally on a one page Strategy Communication Map that outlines the clear and compelling choices about where to play and how to win.

   When leaders show why and how to simplify and focus how work gets done, they show the workforce that they are committed to doing what it takes to both get the desired results and to behave in alignment with the corporate values.

   Unfortunately, our research found that employees on average report that their organization’s strategy is half as clear to them as to their executive team.  And 2-out-of-3 executive teams are strategically less aligned than they believe.  Is your strategy clear enough?

2. Align Cultural Choices to Your Strategy
   Once your strategy is clear enough, it must go through your people and your culture to be successfully executed. To ensure that your culture is helping and not hindering your strategy, your next step is to take a close look at the key choices related to how you do things as a company like serve customers, beat competitors, make decisions, manage risks, reward behaviors, and operationalize work flows.

   The goal is to make sure that the way work gets done is not only aligned with your strategy but also easy on your employees, partners, and customers.

3. Simplify, Reduce, and Eliminate
   Once your strategy is clear enough and your culture is healthy and aligned enough, it is time to ruthlessly simplify, reduce and even eliminate the unnecessary steps in how work gets done. Focus on the most misaligned, duplicative, or complicated layers, processes, projects, roles, and activities that are directly inhibiting effective strategy execution.  Make sure that employees have the freedom to improve products, processes, and services.
4. Incentivize and Monitor
   Once you have simplified and aligned how work gets done, it is time to ensure that you are incentivizing the right behaviors and developing the skills required to execute the strategy in a way that makes sense. Then you need to monitor, track, and report on progress so that everyone knows where things stand.  Ensure that your performance management systems reinforce the desired behaviors.

The Bottom Line
Beware of complexity creep.  It can stall growth and decrease organizational health.  Make alignment and simplicity an ongoing priority.

To learn more about how to have your culture accelerate your strategy and motivate your employees, download How to Create a Purposeful and Aligned Culture for your Unique Strategy