Power of Simplicity

David J. Abbott

Power of Simplicity ???

By David J. Abbott

“Simplicity is the ultimate sophistication” said Leonardo da Vinci, the Italian polymath more than 500 years ago.

In an increasing complex business world, the leading businesses are not only the most dominant, but also the most simple. Simplicity is a principle that has stood the test of time, almost dating back to the Garden of Eden. Simplicity cuts out all the fluff, and allows for clear eyed focus.? Knowing the two ways to simplify based on either price and or value proposition can make all the difference. “The ordinary way of doing business is not the best way” thought Henry Ford.

If you look at successful companies and their products, despite their technological complexity, they are easy to use, and deliver clear value.?? Prime example would be, for instance, purchasing on Amazon, Apple iPhone, Google search engine, Airbnb, taxi apps, artificial intelligence thanks to ?ChatGPT and Facebook’s WhatsApp.? It’s a very long list, closer to home, simple money transfer by M Pesa is the money transfer product that has spurred Safaricom’s dominance, making up 41% of its mobile service earnings, plus look at the success of betting apps. Java House, one of Kenya’s most successful restaurant chains was built on the simple value proposition of tasty generous portions of affordable food, served fast, in a family friendly setting. ?Paradox is, it is easy to complex, convoluted and long winded; quite difficult to simply address the essence of a management problem.

“Successful simplifiers always come up with a new key, or keys to unlock and transform a market. These keys are almost never based on market research. Instead they come from insight – often a sudden epiphany or bolt from the blue that nearly always arrives away from the office” write Richard Koch and Greg Lockwood in their 2016 book, Simplify.?

According to Koch and Lockwood there are two ways to simplify, either based on price or value proposition.?? Worse situation for a business is not being able to differentiate itself, to be stuck in the middle, in an El Nino thunderstorm, not to be able to stand out from the crowd. Just following everyone else in a ‘me too’ like way. ?What business does not tell you, they are the best, with? ‘walk on water’ mission and values statement?

Price simplifying

Price simplifying is a touch radical, tread carefully. ??It means cutting the price of a service or product by half or more.?? But it does not mean reducing the quality of the product.? In price simplification the company looks at its value chain in the creation – provision of the product. Examining how it can increase volumes, being more efficient, leading to a lower cost base, and at a significantly reduced price for the customer. Koch and Lockwood point out that the customer demand often does more than double, and can increase fivefold, or tenfold.?? Innovation guru Clayton Christensen would call this an ‘efficiency innovation’, cutting the price, becoming more efficient in production, while maintaining quality. Anyone can cut prices, and reduce quality, to gain sales, but that is a slippery slope, as it leads to a race to the bottom. Critical factor in price simplification is an analysis, the diagnosis of how one can be more cost efficient.? Examples of this in Kenya would be taxi apps, making it easy to get a lift, at a low price, and sale of mitumba used clothing, that has generated jobs in trading.

Proposition simplifying

In proposition simplifying the focus is “to make the product or service not just a little better, but a whole order of magnitude better, so that it is recognisably different from anything else on the market” writes Koch and Lockwood.?? Aim here is having the product or service, not just be easy to use, but also be a lot more useful.? Based on simplicity, it’s likely that the product has an element of design ‘art’ so that people love using it.? Prime example here would be ease of use of Apple products, think of a simple elegant Christian Dior dress, or a minimalist design high end Swiss watch.

“Large organizations are by nature complex, but over the years new business challenges—globalization, innovative technologies, and regulations, to name a few—have conspired to add layer upon layer of complexity to corporate structure and management. Organizations have become increasingly ungovernable and unwieldy: Performance is declining, accountability is unclear, decision rights are muddy, and data are crunched repeatedly, often with no clear purpose in mind. To avoid frustration and inefficiency, executives need to systematically attack the causes of complexity in their companies” writes Ron Ashkenas.

If key decisions are continually passed upwards in a company, it means trouble, and organisation gridlock.? Imagine the manager who to get anything done, has to ask their boss, who in turn has to ask their boss, and onward up the chain. ?Ideal is that staff are empowered to act. Empower literally means giving the power and authority away, so the most powerful person is the dispenser of power.?? Again, simplicity comes into play, flat lean organisations structure are usually the most effective.

Being sophisticated means having a simplicity mind-set, creating business value. We often make work harder than it needs to be when we lose focus, or allow any distractions to stall our small steps forward. Just breath in, breath out. Think about how you think.

“Life is really simple, but we insist in making it complicated” is how Confucius saw our predicament.

David, [email protected] ?is a director at aCatalyst Consulting.