Is Your Company’s Complexity Essential, or just Artificial?

The Understanding Group is often brought into situations where the stakeholders are aware that there is a problem, but don’t know how to even start talking about it. A quick survey of the landscape will reveal that a common denominator for all of them is complexity, which can be simply defined as models with:

  • Many components
  • Many (and varied) relationships between those components
  • Tasks in the system that require many steps to complete

An example of a simple task would be juggling three soft balls of equal size and weight. With the application of a few rules, you can learn how to juggle this way pretty simply.

An example of complexity would be learning how to juggle a chainsaw, a lit firecracker, and a badger. Notice that not only do we have to deal with three different objects, but you have to manage to light the firecracker, start the chainsaw, and not wake up the badger!

Essential and Artificial Complexity

If we’re in the juggling business, at some point we are probably going to have to learn how to do that badger-chainsaw-firecracker trick. This is an example of ESSENTIAL complexity. Just about any company whose products or services have been driven by the evolution of the Internet in the last twenty years has seen an explosion of essential complexity.

This kind of complexity gives us rich review/product hybrid pages on Amazon, on-demand shipping, infinite credit card product options, and fifteen different ways to watch a movie online. The badger-chainsaw-firecracker complexity is an essential part of what we often consider “good” as consumers.

However, if your goal is to keep those badgers, chainsaws, and firecrackers in the air, it’s probably better not to try it drunk, or while peering through a paper pinhole, or with your feet. Those changes would be examples of ARTIFICIAL complexity, that is, extraneous detail that doesn’t add or reflect value, but makes the task harder.

It’s often tricky to tell the difference between the two. In fact, many kinds of artificial complexity may have seemed like a good idea at the time. But ultimately, one of TUG’s first tasks when working with companies is to figure out which kind of complexity their processes reflect. Then we help figure out what truly matters—what is essential—and what the company should re-engineer or change. In short,

  • Essential complexity reflects the value proposition of the organization.
  • Artificial complexity reflects compromises or design decisions that were made to address local, short-term problems with unplanned long-term cost.

Detangling the Threads

So how do we tell what is essential and what is artificial? Generally speaking,

Essential complexity is always in the service of the primary customers of the organization.

This is pretty straightforward. You ask the following question repeatedly: whom does your company serve? If you’re a bank, you serve people who make deposits and people who ask for loans. If you’re a restaurant, you serve people (literally) who come to eat your food. The value propositions of the organization—and its essential complexity—should always revolve around these groups.

Artificial complexity reflects entrenched, time-or-locality-dependent compromises that reduce the ability of the organization to provide value.

Any activity that makes it harder to take an order, any activity that increases the error rate of dollar entry for deposits in a bank, or any inefficient activity that draws resources from the core goal of serving a client is probably inessential complexity. Once you start looking at organizations, you’ll find that a shockingly high number of processes fall into this category.

Companies don’t mean to have their processes cause these problems. It’s just that over time, if there isn’t a thoughtful effort to introduce and manage the business, the short-term fixes start to create a lot of friction and overhead. Eventually, the cost to replace them can become very high.

Clearly, artificial complexity is easier to push down the road, but the longer it is avoided, the more serious the problem can become. The Y2K bug is a perfect example of technical debt that eventually had to be addressed at great cost.

Perhaps the best examples of artificial complexity are those we labor under every day: consider the QWERTY keyboard. This keyboard layout is from 1873. It was EXPLICITLY DESIGNED to slow down typing speed, because more efficient layouts resulted in the printing machinery behind the keyboard getting stuck together. Nowadays computers can process keystrokes as fast as we can make them, and in fact there are much more efficient layouts available. But even twenty years after the death of the typewriter, these keyboard layouts are still an exception rather than a standard.

Latham Sholes's 1878 QWERTY keyboard layout

This artificial complexity is a friction on the essential complexity of, say, writing this blog post.

So why does QWERTY remain? Essentially, the effort to make this change systemically is considered too expensive and confusing.

Which gets us to the third task in detangling the thread of artificial and essential complexity:

Determine the value of addressing issues of artificial complexity by exploring cost and value in the organization with a Business Process Model.

TUG uses a concept called the Business Process Model to diagram the ideas of essential and artificial complexity, and their degrees. The diagram below is an example of a deliverable we shared with a client that outlined their business and then characterized the essential complexity (blue) and the artificial complexity (red) as low, medium, or high. The client was then able to identify each area to explore and focus on moving forward, based on which business values were being impeded by too much artificial complexity.

Diagram showing The Understanding Group's business process model that visually displays complexity

Value is a funny word. It’s not always money, although at some point it needs to make sense economically. Generally, it is about what a company wants to be and what they are today. If an organization can look at a list of artificial complexity, rank each activity by its value as an area of improvement, then they have the beginning of a strategy. You start at the top of the list and work down until the urgency to address the issues is lower than the cost of fixing them.

This may seem crazy or glib, but it is the core of any conversation about strategically managing what a company is about and where it is going.

So sober up! Tear away that pinhole paper! Look with a clear mind and with both eyes at the chainsaw, the badger, and the firecracker we are juggling, and get to work.

  • Lawrence Lazare

    Great article Daniel!

    I’m a big believer in using real-world easy to understand examples to help people get concepts, and the QWERTY example is a great use of explaining artificial complexity.

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