Posted: 23 Mar. 2021 6 min. read

Organizational Simplicity

Three tactical steps to reduce complexity

Your company’s organizational complexity comes with a cost.

You likely work in a matrix structure that enables you to impact multiple products, segments, and geographies. However, this organizational structure may force you to adapt to the various agendas, missions, and priorities held by multiple leaders. The complexity creates uncertainty, potentially deterring your efforts to prioritize. You’re likely juggling multiple targets rather than focusing on purpose-driven objectives, thereby hindering the organization’s overall productivity.

If you and your employees find yourselves wading through this complexity without clear and actionable objectives, you’re likely to spend more time on redundant, low-value activities. We know that many conversations revolve around the cost and transactional output of labor rather than the value that the workforce generates. A complex organization looking to pursue traditional cost-reduction tactics is likely to implement harsh, reactive, and drastic cost-cutting measures that might free up short-term resources but hinder long-term value creation. Rather, organizations should seek to reduce costs in a sustainable way that allows for investment into future growth or stability.

So what are some first steps to address these challenges and achieve organizational simplicity?

To remove organizational complexity and achieve elegant simplicity, put three activities on your road map: 1) Understand how work really gets done in your organization using network science and existing collaboration data. 2) Pay attention to your governance including how and why things are prioritized and cascaded. 3) Scrutinize your sticks and boxes and identify where friction can be reduced.

1) Understand how work really gets done in your organization using network science and existing collaboration data. Network analysis1 allows you to understand collaboration, productivity, and inclusion across the organization. It helps you see shadow functions, siloes, or bottlenecks stopping the flow of work. 

Based on the insights mined by network analysis, you can implement targeted interventions that allow organizational structures to more readily mirror how the work gets done, removing unnecessary barriers and impediments to execution. For example, to help employees focus on purpose-driven objectives, network analysis can position you to mobilize resources and capabilities around the problems that need to be solved (as opposed to solving the standardized and repeatable problems that your organization is structurally already equipped to fix).

These network analysis insights on how the organization is really collaborating can also inform the next two steps on your road map.

2) Pay attention to your governance including how and why things are prioritized and cascaded. Map the different governance constructs that currently exist between your organization’s corporate center and geographies (or functions). Understand the role that each layer plays in decision-making, guidance, and advisement. Evaluate how each layer is adding value to the overall customer agenda. The question whether each hierarchical layer is needed. As much as possible emphasize a direct relationship between global HQ and local operations, or push most of the decision-making to regions (with an extremely lean HQ and empowered regions). In other words, increase transparency and bring decisions closer to where they are executed.

3) Lastly, scrutinize your sticks and boxes and identify where friction can be reduced. Review how work is structured to be done versus how teams collaborate informally (#1 above). If the way you are structured is acting as an impediment to work getting done, then consider opportunities for a structural redesign. Empowered employees, optimal spans of control, and flatter organizational structures are indicators of more efficient and effective organizations.

Amidst great uncertainty and disruption in the ecosystem, it’s essential to simplify the organization for employees to focus on the north star of the organization. By mining insights from network analysis, considering your governance, and refining your sticks and boxes, you can remove the complexity and uncertainty that prevents you from focusing on what really needs to get done. By clarifying the purpose of your work, you can avoid doing everything (some of which might be done mediocrely); and instead, excel at fewer objectives with precision and dedication – thereby simplifying work and cutting costs.

Authors:

Don Miller, India Mullady, Sonia Singh, Michael Kessler

Endnote

1 A structured way to visualize how communications, information, and decisions flow through an organization

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Don Miller

Don Miller

US Leader | Organizational Strategy, Design, and Transition

Don leads Deloitte Consulting LLP’s Organizational Design practice, empowering global clients to design their organization structures based on their best human impulses and aspirations to future-proof their businesses. He has more than 15 years of experience in bringing together diverse leaders to co-create new organization governance and decision rights models to quickly foster their teams’ accountability to organize, operate, and behave differently to stay resilient in a fast-paced world. While his OD industry experience spans all sectors and functions, Don is also one of the leaders of Deloitte’s Human Capital Media, Entertainment, and Sports practice.

India Mullady

India Mullady

Senior Manager | Emerging Areas

India serves as a leader in the US Organization Strategy, Design, and Transition Practice focused on bringing the power of network science and how work truly gets done to clients. Her emerging areas portfolio includes helping organizations become more adaptable. She has spent over ten years studying decision making and organizational interactions, including a focus on clarifying roles and responsibilities. She is also a leader in helping executives reimagine organizations, leaders, and teams.