The real battle is not against competitors, but against ourselves. Morieux and Tollman make the case for a new approach to management that they call “smart simplicity”
BCG partners Yves Morieux and Peter Tollman have written a new book called Six Simple Rules: How to Manage Complexity Without Getting Complicated, in which they make the case for a new approach to management called “smart simplicity”.
The approach is based on the authors’ discovery that management teams, in trying to cope with complexity, often add to the problem by introducing rules, procedures, departments, meetings, policies, [insert more red tape here] without ever stopping to find out what their people do and why.
The book provides six principles that the author’s believe can make organisations more agile, competitive, and responsive by helping employees become more autonomous, cooperative and empowered.
Here is a super summary of the six principles (some are more illuminating than others):
- Understand what other people do. The authors argue that large organisations suffer from a cooperation problem. When people in one department do not understand what people in other departments are doing, they can inadvertently impose costs on their colleagues and, as a result, on the organisation as a whole. Morieux gives an example of a car manufacturer that threatened to move its production engineers to the after-sales warranty department after a car went into production. By forcing the engineers to understand the problems faced the warranty department, car designs became more reliable and cheaper to fix.
- Reinforce existing managers. The authors suggest giving existing managers the power and incentive to make people cooperate by removing unnecessary organisational layers and placing them closer to the centre of the action.
- Empower employees to use their judgement and intelligence.
- Extend the shadow of the future. That is, create mechanisms whereby employees are exposed to the consequences of their actions. The car manufacturer tried to do this by moving its production engineers to the warranty department. Another familiar example is in publicly listed companies where executives are granted long dated options in an attempt to align their incentives with the long term best interests of shareholders.
- Increase cooperation by removing some support systems that make people self sufficient. This is a curious suggestion since, at first glance, it appears to contradict the prevailing idea that companies should always drive to increase efficiency. The authors argue that by making each employee too self sufficient this can reduce their need to cooperate and result in a more dysfunctional organisation. The take away lesson seems to be that companies should strike a balance between the pursuit of efficiency and encouraging cooperation and interdependence. For example, in a consulting firm, it makes sense to provide every consultant with their own computer, but it might be counter-productive to provide everyone with their own printer and coffee machine since a lot of serendipitous conversations and informal learning opportunities happen when people are forced to share resources.
- Reward those who cooperate and punish those who don’t. Don’t blame people who fail, but people who fail to help or ask for help.