Article
The Simplification Principle
Three levers to simplify your business model
We have observed increasing complexity in our clients’ business and operating models and identified the need for simplification. In this point of view we drill down on the essence of simplification, consider the related benefits, discuss the levers as well as outline our approach towards simpler and nimbler organisations.
Simplicity is a principle
While your clients may ask for optionality, providing less choice is often a key to a simpler operating model, which allows for a smoother delivery. Taking an inside-out perspective, simplifying internal processes and structures will have positive impacts on the entire value creation capability of a company. There are plenty of examples that underpin these observations and we clearly see how the simplification principle has transformed entire sectors and reshaped the competitive landscape. We firmly believe that simplification should be applied as a guiding principle and be leveraged as a criterion for business decisions. Simplification allows us to challenge each process and approach to identify which is the most efficient and best suited for its particular purpose.
Applying the three levers: rationalisation, standardisation, modularisation
Based on our research and experience in advising clients in solving complex business problems, we identified three levers towards simplification. These should be applied in the appropriate order to achieve the most effective results.
Reduce to the maximum, taking unnecessary elements from your business and operating models so that they become less “clunky”.
Aim to achieve identical parts across different technical platforms or products. For instance, standardisation in IT infrastructure could stem from coding standards for one application to the standardisation of whole IT platforms, involving hundreds of applications and interfaces.
Allow an efficient reuse of the standardised building blocks and creates a modular system with a common structure. The goal is to decompose a complex structure into standardised modules, each of which can be easily replaced and reused.
Succeeding with simplification
We have developed an approach to identify and address the simplification potential in a four-step approach:
- Blueprint: Blueprinting the root cause of complexity
- Identify: Identification and priorisation of simplification opportunities
- Resolve: Decreasing or resolving complexity
- Optimise: Optimising simplification benefits for the long run
