“Simplicity is the ultimate sophistication.”– Leonardo da Vinci
“Keep it simple.”
Although it’s a phrase even children understand, the irony is that it’s not always easy to achieve.
Have you ever wondered why the creep of complication is a constant in our personal and professional lives? It’s because we tend to value complexity! For example, we think people who talk about complicated things are experts (they’re often not), we favor complicated products over simple ones (they’re not necessarily better or more effective), and we believe it’s worth paying more for complicated features (it’s often not).
Business leaders often exhibit a dulled sense of how growth begets complexity, which springs a trap that slows growth, dilutes cultures, and breeds mediocrity. This growth trap captures those who can’t or won’t adjust to the reality that as any organization becomes larger, its complexity increases at a rate that’s exponentially faster than its linear rate of growth.
A scaling business works exactly in this way. In your mind, your firm grows in a linear fashion—adding one client, one employee, or even one store or office location at a time. But in reality, with each unit of growth, you add multiple layers of complexity to accommodate communications, processes, required materials, resources, and more.
This is one of the main reasons that businesses struggle at scale. At the extreme, complexity swamps organizations and destroys value.
It’s up to leaders to understand that linear growth is an illusion and that the inevitable complexity must be incorporated into the planning, structure, and execution of the firm.
In other words, it’s your job to keep things simple!
Before I share a few techniques to simplify your organization, it’s important to distinguish between simplicity and being simplistic. By saying you should strive for simplicity, I’m not suggesting every facet of your organization can or should be elementary. Every industry requires a deep understanding of certain technical aspects and nuances.
For example, consider the engine in your car. Internal combustion engines are quite simple—they convert air and fuel into mechanical energy—but designing an engine to do that reliably for 100,000-plus miles is anything but simplistic!
What follows are three key areas where your business may become unnecessarily complicated as you scale—and questions you can ask to simplify your operation. Although the questions themselves are quite simple, the thought processes required to produce the answers will be anything but.
When you don’t have a clear business model and strategy, business can feel very complicated and stressful. You might be doing too many things at once or trying to please too many different types of customers. Even worse, if your business model isn’t solid, you’ll be trying to build your firm on a shaky foundation.
These three questions will help simplify your thinking about both business model and strategy:
An ideal or core customer must meet all three of the following criteria:
Leaders often mistakenly identify their core customers as those who bring in the most revenue or have been with the firm the longest. But just because they’re big or long-standing doesn’t necessarily mean they fit all three criteria! In fact, misidentified core customers are most likely to be eroding your profit and making your strategy more complicated.
Use this process to create a simple, clear statement that identifies your core customer:
Here’s how these elements came together to describe a residential painting contractor’s core customer:
“A central New Jersey homeowner with $100k+ household income who is active in their community and proud of their home.”
Now that you’ve identified your core customer, it’s time to ensure that all marketing and selling activities are optimized to find, attract, and win their business. Don’t continue trying to be all things to all people (and firms)! Rather, become a fantastic fit for your core customer and focus your resources on them.
Just because you can describe your core customer doesn’t necessarily mean you understand or create optimal value for them. Consider: people don’t pay thousands of dollars for Louis Vuitton luggage because they need a place to pack their socks! Rather, LV’s value to their core customer is prestige and exclusivity.
Go beyond the obvious here. For example, is your value Convenience? Quality? Affordability? Time savings? Prestige? Or something else?
Thinking more deeply about your core customer’s wants and needs, and answering this question thoughtfully will simplify your firm’s strategy.
Now that you’ve identified the value you create for your core customer, you can ensure that all communication, design, and operational activities are optimized to deliver it.
The answer to this “How” question is the essence of strategy. Clarity here enables better decision-making, more productive prioritization, and more effective allocation of resources.
There are countless options and trade-offs to consider here, including:
Of course, there are important operational implications for each of these choices, which is why it’s so critical to clarify and articulate your “How.”
Although most firms rely on staff to operate and scale, people can be challenging to lead and manage, particularly as organizations grow.
Answer these three questions to simplify the job of scaling your team while reducing the potential for people-induced headaches and drama.
I pose this question to leaders because it forces them to take a brutally honest look at their team. Note the key word in the question: enthusiastically.
Considering this instantly shines a light on people who aren’t a good fit, people you’ve been tolerating, and people who are underperforming. Whenever your answer is anything less than an emphatic YES, pay attention! There’s something going on that is making your business more complicated than it should be.
You are only as good as your weakest link. But it’s often difficult to identify a weak link, acknowledge the problem, and/or make the decision to remove someone from the organization.
Here’s the embedded complexity: You accept mediocrity because you’re busy, people are hard to find and hire, you’re unwilling to accept a hard truth, you’re emotionally entangled with some of your staff, or—let’s be honest here—you’re overly dependent on some of your worst offenders. So you tolerate the weak links.
Stop tolerating mediocrity and get the right people on your team. Click here for a deeper dive on this topic.
It’s on you, the leader, to clearly communicate to every employee what is expected of their role. After all, if your people don’t understand what they are expected to produce, how can you reasonably expect them to deliver?
Creating a Role Accountability card with the three most important outcomes for every role in your firm simplifies and documents expectations. Notice I said outcomes, not activities. Most organizations I’ve encountered are activity-focused—for example, a salesperson calls prospective clients, qualifies prospects, and closes deals. But we pay salespeople to produce outcomes like signed contracts, revenue, and gross margin.
The same activity vs. outcome issue applies to every role in your organization. Activities are verbs; outcomes are nouns—simple and clear. If you don’t have role accountability cards for each position in your organization, you should create them now. This article shows you how.
Your organization has a culture whether you’ve purposefully defined it or not. Is yours “accidental,” or has it been intentionally created and cultivated?
A small number of Core Values are the building blocks of culture, but the values themselves aren’t enough. They’re of limited utility until you link each of them to specific behaviors, commonly supplied as a one-to-two sentence description that accompanies each Core Value. Those specific behaviors provide clarity around what is expected and serve as a coaching tool for managers.
Productive cultures don’t typically happen by accident. Expend the time and energy to define and create yours with clarity and intention. You’ll hire better fit staff, improve overall esprit de corps, and retain more top performers–keeping things simple as you scale.
The measure of great execution is consistent growth and profitability, as well as drama-free day-to-day operations. These three questions will help simplify and improve your execution:
This is a super simple question and a great way to streamline your thinking about the business. I’ve always said that if everything’s a priority, nothing is, and if you have 10 priorities or chase shiny objects, you’ll make things far more complicated than necessary.
To get clear on priorities, use a principle from 19th century Italian economist Vilfredo Pareto. Pareto was the brains behind the 80-20 Rule, the idea that a small fraction of things exert an influence on the vast majority of outcomes.
That’s certainly true when we think about prioritization. You want to identify the one-to-three things that produce maximum value and propel you in the direction you want to go. Each priority, of course, should have a single point of accountability, and you should make sure you’re communicating and engaging the company around your priorities throughout the year.
Communication is one of the areas where the complexity bug bites the hardest. As the organization scales, you have more clients, employees, and/or locations, and the task of effectively communicating across those channels grows exponentially more complicated. Suddenly, it feels like nobody knows what’s going on!
It’s likely you’ve been on the receiving end of poor communication at some point in your career. It’s not fun, it’s stressful, and you can literally see the wasted time, energy, and resources all around you.
To combat this, put every employee in a daily huddle with their team. Huddles should be just 10-15 minutes maximum with the singular purpose of synchronization. You don’t debate, you don’t solve problems; you just make sure the team is in sync for the day. Consistency is important, so conduct the huddles every day!
Every employee should also attend a weekly meeting with their team. This one is longer (30-60 minutes), replaces the daily huddle that day, and it gives everyone time and space to dig into how the team is doing. The weekly meeting is where people can identify, discuss, and solve the right questions to continually improve.
Every organization has two-to-four core processes that are the guts of your operation. For example, most firms have some form of a client acquisition process—a combination of marketing and sales. Then there are core processes typically involving design, production, delivery, and more.
The problem is, while most organizational action is vertical in nature (think departments and teams), core processes tend to run horizontally across different departments and teams. As a result, core processes can get sloppy over time! It’s also easy to lose sight of the need for a single accountable person for each core process. Clarifying your two-to-four core processes and single point accountability for each helps keep things simple, even as your organization continues to grow.
“Simple can be harder than complex. You have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains.” – Steve Jobs
Your company is a factory. Regardless of whether you produce goods or services, you convert raw materials and processes into value for your customers.
But as your factory grows, it’s increasingly susceptible to the growth trap and will become exponentially more complex unless you’ve actively and consistently worked to simplify things.
It’s important to note that this isn’t a “one-and-done” process! If your company is gaining ground—and I hope it is—each new milestone of growth will introduce new problems and complexities that must be addressed to continue your journey.
Review these questions annually with your team to continually assess and evolve your approach to Business Model and Strategy, People, and Execution. Done right, you’ll stay ahead of the complexity curve by arriving at the simple, powerful answers clearing the way to the future you envision.
Imagine how great it would be if your employees were more independent, better decision makers, and did the “right things” more often without needing much guidance. Although we intuitively know that these attributes eliminate countless leadership headaches and set the stage to create scale, it’s shockingly easy to elicit the exact opposite behaviors from your team.
Together we will:
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The best strategies and market opportunities in the world mean nothing if you’re not able to execute our plans and get things done. And yet, accountability remains a recurring, frustrating issue for business leaders around the world. Organizations with an accountable culture execute smoothly and without drama, retain high performers, and have an improved sense of collaboration, accomplishment, and fun at work.
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