When I recently returned from a customer appointment with a frowning face, a colleague asked what was the problem. To my own surprise, I was not able to explain to him why the particular case was so complex. After all, he concluded, the demand was stable, the product portfolio was limited and products had no short shelf lives. My colleague was right. Piece of cake so you might say. Practice proved to be different though.
I had a similar experience recently when travelling with another colleague, again for a customer visit. Reason for the trip was that this customer had lost control over his process. This had lead to structural losses and he urgently needed help. While driving, we discussed his – basically simple – process and wondered aloud how this could have gone so out of hand. After arriving, we found that our client had not exaggerated. His supply chain was basically out of control.
In both cases, Professor Marshall L. Fisher would have qualified the products as functional. Theoretically, an efficient supply chain should therefore suffice. In both cases however, there was an endless succession of surprises and interventions. If a fire starts, says one of the employees, they do not call the fire department; they are the fire department! Both organizations had gradually been forced to become responsive and now had run into the limits of their possibilities. Even though their markets barely required responsiveness. They were after all consuming commodities. Simple, right?
But if the markets hardly asked for responsiveness, then where did this perceived need for responsiveness come from? There is only one answer to this question. In both cases, the perceived complexity had been created internally! Not intentionally of course, but accidentally. In good faith. By relying blindly on trusted ‘rules and tools’ and logic, both companies had gotten themselves into trouble, resulting in high costs, disappointing service levels and a bad atmosphere.
Not because their markets were complex, but by creating complexity themselves, both companies had caused an insatiable need for responsiveness. In these cases we can speak of bad complexity; self-induced complexity that the market is not willing to pay for. Complexity therefore that occupies our scarce resources, but does not create any value for the customer. It was worrisome to see that the corrective actions taken by both companies had only lead to even more bad complexity. And thus the need for responsiveness! Both customers had unwillingly manoeuvred themselves into a downward spiral.
In both cases, there was only one way out: elimination of bad complexity. On the one hand to reduce the need for responsiveness, but perhaps even more importantly, to create space for good complexity. Complexity that the customer is willing to pay for, and that they can use to outsmart their competition.
Unfortunately, these two companies are not alone. The supposedly solid logic of our old rules and tools is widespread. Once we have gone down this path, an inextricable tangle of complexity can arise before we know it, and we can not do much more than fight the symptoms and blame others for causing all this misery.
The solution is to return to the essence. Let’s first ask ourselves why we do what we do. And for whom? Then dare to see ourselves as part of both the problem and the solution. Winners are characterized by having controllable processes and having successfully eliminated bad complexity, to make room for good complexity. Or as Albert Einstein used to say: “everything should be made as simple as possible, but not simpler’.