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Keep it Simple

Tuesday, August 1, 2006 - 15:35

Simplicity has emerged as one of the hot management trends of the new century. But is it really new, or just commonsense? Kate Kerrison reports.

John Fogarty, Chief Executive Officer at St John of God Hospital, Ballarat, says simplicity is paramount in his business. To him, simplicity means taking things back to basics and removing obstacles and barriers to efficiency.

"It is obviously the opposite of complexity, and most complexity is usually introduced by human intervention in simple processes," Fogarty says.

"Two years ago, our bookings and admission process was a nightmare. Our patients, who are often elderly, were expected to fill out more than five pages of a questionnaire to be booked into the hospital.

"After that, it was often the case that the patient was called two or three times by different people in the hospital about their health assessment, their financial consent or details of their admission time. Similarly, doctors or their secretaries had to ring at least two different departments to book in a patient.

"We rationalised that five-page form into a one-page form, which we hope eventually to make electronic for both patients and doctors. Patients are contacted once by the hospital, and when they arrive we know a lot more about them than we did when we received an incomplete five-page form.

"Their admission and discharge planning is well underway before they get into the hospital, and we can plan their care and their stay so much better. It has significantly improved satisfaction from all the stakeholders' viewpoint."

Fogarty says that although his basic philosophy of management has always been against bureaucracy and complexity, his real interest in simplicity came in 1999 when he was part of a project team that was trained by GE in Six Sigma methodology.

"In effect this is about removing all the noise or complexity from processes and focusing on only those elements that are critical to quality. I think this experience really enhanced my view that simplicity is really the antidote to many organisational ills," he says, adding that hospitals are perceived as very complex places.

"Indeed, in places like operating theatres there are very complex and intricate surgical and other procedures being carried out every minute of every day. Simplicity is therefore really important for everyone - patients, doctors, nurses and even visitors.

"Patients coming to hospital are either really nervous about what is ahead of them; or really sick when they get here and have anxious relatives with them. The last thing they need is to be faced with a complex web of bureaucracy to deal with.

"Similarly for doctors and staff - they don't need to have to wade through complex processes and procedures in order to be able to deliver the care and service they are professionally trained to deliver."

David Brewster, a consultant who runs his own business, Business Simplification, agrees the need for simplicity is driven by both demand from consumers and demand from the workforce.

"It is an area that managers are increasingly interested in," he says. This is backed up by a number of studies and papers on simplicity published during the past year, including a survey in The Economist and a number of articles in Harvard Business Review .

"One of the analogies I look at is the restaurant. If you walk into a good one, it is nice and calm, the staff are well groomed and it is a relaxing atmosphere. Then you look at the kitchen and it is chaotic - it's where things happen - and business is like that," Brewster says.

"The consumers want a pleasant relaxing dining experience and the kitchen needs to be easy to work in, and a pleasant place for those working in it."

Brewster says that IT is now fully focused on simplicity because it is the big business issue of the moment.

"A lot of complexity has been brought on by technology - some IT systems seem to create more work for employees, and on the other side, consumers are grappling with products that have more features than they need.

"We also seem to have got ourselves into a bind of using IT as a solution, for instance with our spreadsheets. Let's just get back to a whiteboard and look at the issues."

He says there have been dramatic results when companies have actually focused on simplifying the way they do things.

"I have seen a large food manufacturer improving its order fulfilment process, reducing the number of steps in the process from 110 to 30 and improving productivity by 30 per cent. They removed both paperwork and unnecessary technology, significantly reducing pressure in the area and allowing staff to focus on other proactive activities.

"In another case, a large paper mill was looking at improving its overly complex scheduling system. They halved the product range, with minimal impact on sales (using the 80/20 rule), and achieved a 50 per cent reduction in the lead time to customers for the top 80 per cent of product volume."

Elsewhere, he has seen a small funds management business improve its client management process resulting in a 70 per cent reduction in quarterly processing time.

One of the best definitions of simplicity he has seen comes from a children's dictionary - simple: easy to do, use or understand.

However, Tim Orton, Managing Director of leading management consultancy The Nous Group, says the concept of simplicity is not a recent entrant into the world of business, and it has been around for a long time in different guises.

"I have not seen an increase in the number of conversations with companies about wanting to simplify, but I have had a lot more conversations about the need for better customer service, and it is almost the same thing.

"The businesses we work with are talking about speed not simplicity, but you can't have the speed without simplicity.

"The key to companies performing well is to not confuse anyone about what they are trying to do, whether it is staff or consumers," he says.

"The power of simplicity is that people are clear about what they should be focusing on."

Orton says that in some ways, the businesses that have the fewest resources to draw from achieve simplicity the best. One of the risks for companies that become very successful is that they invest in more information, and that leads to complexity.

And at the same time, he says, there are a number of trends working against simplicity.

"Risk management is leading to complexity. Risk registers and processes and the regulatory environment make things more complicated - make it harder to achieve simplicity in business.

"In some ways the IT revolution has enabled more efficiency, but it has also led to more complexity because there is so much more information available to decision makers."

Fogarty agrees that most processes in business eventually become "overengineered" and overcomplicated as one bandaid is applied on top of another.

"Simplicity is not as reactionary, indeed it's proactive because it is getting back to the root of the question: What is the problem we are trying to solve?"

Brewster says that true simplicity may indeed be unattainable, but you can keep it in the back of your mind during any decision making process.

"It is like a garden shed, you clean it up and make it simple, then it gets messy again and you have to go through the same process 12 months later."

In their November 2005 Harvard Business Review article "Innovation vs Complexity" Mark Gottfredson and Keith Aspinall referred to complexity as "insidious". "Getting rid of it (complexity) is only half the challenge. The other half is keeping it out."

The next great idea

Philips, one of the largest electronics companies, has taken the "simplicity" theme throughout its entire business. According to Philips, around 30 per cent of home-networking products are returned because people can't get them to work. And 48 per cent of people have put off buying a digital camera because they see them as too complicated.

In January 2003, Philips carried out global research and asked 1650 consumers and 180 customers in 120 in-depth interviews, 24 focus groups and 1439 quantitative interviews, what they thought of the user-friendly status of technology.

Based on this research, Philips found that consumers want the benefits of technology without the hassles, and this led to their "sense and simplicity" marketing push.

Speaking at the group's annual general meeting in Amsterdam in late March, Philips President Gerard Kleisterlee said, "sense and simplicity is much more than just an advertising campaign. It also means greater simplicity in distribution, in our dealings with suppliers and customers, and in our own organisational structure. Sense and simplicity defines the underlying principles of our transformation in all these fields, namely the three pillars: designed around you, advanced, easy to experience.

"We asked Philips Design to explore how our solutions could simplify people's lives in the next three to five years. The resulting project - Next Simplicity - resulted in 16 design concepts that demonstrate how our focus on simplicity-led design is likely to translate into new products across our portfolio."