Complexity and the corporate world.
There’s no doubt that the corporate world has become incredibly complex. Maybe it’s always been like this, but my direct experience for the last three decades has been not only of growing complexity, but of even greater resistance towards a simpler, more transparent approach to business.
It usually starts at organisational level: we’re all familiar with the attribution of responsibilities through matrix models, dotted line reporting, a mix of global and local coverage, double hatting and 20%-30%-60% time-to-role split (yes, it adds up to 110% of course!).
Then it spreads to job roles and definitions: I’m sure you’ve heard of companies recruiting for a “business catalyst” or “client evangelist”, for example. Then complexity extends to the company’s own product portfolio, ever growing, often overlapping and seemingly attempting to provide everything and anything that any customer could possibly want.
It’s then the turn of the firm’s website, usually an orgy of bold if irrelevant statements, self-promoting white-papers and obscure customer wins.
Market coverage and client segmentation are next, pivoting on slicing and dicing the same potential business in endless ways (by region, by product line, by industry type), to accommodate the aforementioned huge portfolio and the ego of each business line VP, resulting in conflicting, and often unmanageable, mix of sales channels, models and motions.
Finally, politics are abundantly sprinkled on the corporate dish: jealousy, cajoling, peer pressure, fraternity-like networks, lip service, boot licking and double-crossings.
No wonder that many of those corporations just loose the focus on what really counts: the client.
So I ask myself: is such complexity really needed? Gut’s saying NO, of course, but let’s look at a few areas that potentially could explain, although certainly not justify, corporate complexity:
From the CEO down, everybody is playing the power game. Taking into account the average length in office for such high level executives, usually around 3 years, they have to accelerate their efforts to accumulate and concentrate as much power as possible.
Complex things are difficult to control, hence next to impossible to be accounted for. It can be something as simple as building a three-year sales plan and then revise it every year using any of the most popular excuses — market downturn, loss of key clients, employee turnover, wrong product mix, excessive prices, foul weather — to lower the objectives, and then leave or get promoted before the numbers are in.
“It’s always been done like this” is a powerful and still very popular excuse. In a way, the thinking is still along the lines of the famous “Nobody gets fired for choosing IBM” logic in the IT space.
Pretty strong stuff for sure. Simplicity, of course, can be very scary.
As said, it can actually be the single biggest threat to the power players as it drives transparency and accountability with it. A simple, straightforward progress report can easily be taken apart. A no-nonsense business plan, avoiding absurd assumptions (“if we could only get 1% of that huge market”) or bombastic statements (“we will grow three times the market”, “we shall increase customer penetration by 40% in two years”), would either not get approved (executives love to set unreachable targets just to look good with the CEO) or easily be critiqued.
Some say power plays are inevitable in any sector of society and public life. Maybe they are right. In corporations though, the degree of politics and selfish behaviour is often simply too much, to the extent that it can kill any sound and honest approach at looking at the company’s business and at making decisions in the interest of its employees, stakeholders and clients.
It’s also probably inevitable for corporations to be somehow opaque. There’s always something to hide, twist, blame someone else for, talk as little as possible of, and a strong degree of corporate politics will take care of silencing the dissidents among the ranks. Too bad that in the long term things will come out and hurt the company (VW anybody?).
Don’t be fooled though: many smaller companies are still way too complex too. Consciously or not, they end up making the same mistakes as their bigger colleagues. Instead of leveraging their size to be nimble, quick and responsive, they adopt the attitude of large corporations and rapidly fall into the same trap. Their internal processes quickly get bloated, as the number of employees increases so do the politics, a larger number of clients strain customer support policies and larger revenues get everybody cynical about attributing more of it to their own efforts.
So what can we do about all of this?
Well, the challenge is to find a way to drive simplification as an agent of positive change across the corporation. Usually an external player can help assessing the state of things and recommend some sort of remedy cure. A better proposition would be to start internally and from the top in behaving with more openness, honesty and integrity. Stop hiding behind title and rank, and accept the leadership burden of being transparent and direct.
Demonstrate that simplicity can and will make people more effective in what they do, help addressing intricate issues, require less time to fix problems and generally make the working environment sounder and more efficient.
As a people manager, put a premium on transparency and honesty when dealing with colleagues, clients and even competitors, and reward the individuals and teams that excel in doing so. It will take time but I truly believe that it will make business, and the corporate world, a better place.
I write about leadership and business practices. This post is an excerpt from my book “Leader$hip, an insider guide”. Please share.