Work, business & professional services

Keep it simple

A trend that's sweeping through the technology industry is simplicity. The idea is starting to make its presence felt in other areas too. Business tends to make things complicated because it's easier that way. Engineers, in particular, are guilty as charged because complexity sometimes impresses other engineers. Hence most products are over-engineered and feature a myriad of functions that most people will never need or use. Complexity also costs money and can lead to reliability issues - as Mercedes recently discovered when complexity reduced the reliability of some luxury models. Banks complicate product offerings because this makes sense internally, while marketing departments offer customers a plethora of choices because that's what they learn in Market Segmentation 101. The problem is that ordinary people are busy and don't spend their whole day thinking about bank accounts or toothpaste. They just want something that does the job and nothing more. A recent survey by the Consumer Electronics Association in the US found that 87% of people (customers) cite ease of use as the most important feature of any new product. Technology companies are the worst offenders, in not understanding what customers want because of closed feedback loops and the lack of direct contact with end users. So what's the solution? Making products simple is actually very complicated. First you need to make your company simple. This means simplifying not only structure and process, but also culture and mission. A good example of a company that's been 'simplified' is Philips. The company now runs just seventy businesses instead of five hundred and there are five divisions instead of fifty. There's even a Simplicity Advisory Board to ensure that things are made simple but not simpler. Another trick to simplify your relationships with your customers is to communicate in their language, not yours. In other words, if your mother doesn't understand it, neither will anyone else.

Why it pays to be unoriginal

There seems to be an insurmountable body of work on the theory and practice of innovation these days, most of it concerned with how to be more 'creative' or 'think out of the box'. This is perhaps understandable because creativity and ideas sounds like sexy stuff, but it's the back end (the execution) that generally puts money in the bank. Moreover, a recent study by Chuck Lucier (Senior VP Emeritus at Booz Allen Hamilton) says that just four ideas, copied a thousand times in one market after another, account for 80% of all 'breakthrough' new businesses created between 1965 and 1995. The ideas are: Power Retailing, Megabranding, Focus/Simplify/Standardize and Value Chain Bypass. In other words, imitation - or mimicry - is far more successful than creativity or innovation. Ultimately context counts too, because an old idea (an idea appropriated from somewhere else) will appear to be 'new' to customers even if it isn't.  In other words, ditch the novel and recycle something that's been seen and done before. It may not be clever, but it's certainly smart.

Survival of the smallest

A paper by Assistant Professor Mukti Khaire (Harvard) looking at the survival rates of small companies, says that small firms tend to survive when they mimic the image, activities and structures of big companies. In other words, the best strategy for a start-up is to copy the conservatism and conformity of established rivals. Titles such as VP Marketing are therefore good, while titles like Head of Enthusiasm are not. Jumping on an established bandwagon also helps to attract high status clients (even if they prove to be loss making or troublesome) as they broadcast an image of being 'well-established' and 'stable' to the outside world - despite the newness of the start-up. This study is interesting because research into small entrepreneurial firms generally focuses on growth not survival. The paper also points out that all economic activity takes place inside an embedded social supra-structure, which tends to reject anything new or unfamiliar. Location is another important survival factor because all locations have inferred status.

Any colour you want - as long as it's black

An article in the Harvard Business Review has pointed out that complexity can destroy profitability. The theory is that companies tend to produce an endless stream of innovations, most of which look good on paper but fail to deliver any long-term benefit. For example, there is a tendency to segment every product line to appeal to every imaginable type of buyer. But the real cost of managing such widespread portfolios is huge and margins suffer as a result. This is essentially a re-working of the old 80:20 rule, but with a few contemporary twists. First, there is obviously a tipping point at which costs start to outweigh revenues, especially when you start to include 'hidden' costs like inventory and logistics, and these costs really escalate if you are not using common platforms. If you're interested in this idea, a great question to ask yourself is what would your organization look like if you only sold one product or service? This is essentially a complexity reduction exercise, but it also highlights how a potential competitor (especially a low-cost competitor) might operate in your market.

Tracking mobile workers

Trends like telecommuting, hot desking and 'plug and play' offices are all very well from the point of view of freeing workers from fixed physical locations, but what happens when you need to get hold of an employee in a hurry or track down the whereabouts of your entire workforce? Traditionally, you'd simply send out some emails or call people on their mobile phones, but what happens when the mobile network goes down or gets so jammed up that communication is almost impossible? This is exactly what happened on 7 July, the date of the London tube bombings. As a consequence, a number of companies have started to keep tabs on their employees using a variety of tracking technologies. Ironically, some of the most popular systems are mobile phone based - which is pretty silly because they probably won't work if there's another similar attack, and they won't work if people move out of network coverage. Equally, some people prefer to remain anonymous when they're out of the office and switch their phone off. Some of the products currently being used include CRTravel Tracker from Control Risks, BTI People Tracker and Verilocation. Such tracking tools have another more practical use too, because they allow travel agents to warn clients about travel delays. Given that many business people now book their travel arrangements direct (so often there's no paper trial back to HQ) such tools also allow assistants to notify other employees of changed appointments or other emergencies.