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A Case for Avoiding Complexity April 13, 2010

Posted by Peter Varhol in Strategy.

Recently Clay Shirky made an interesting observation concerning the impact of Internet media on traditional media business models.  While I am interested because I occasionally wear the hat of a member of the media, his observation is so universal that it can apply to virtually endeavor we engage in as a group.

Shirky noted that organizations became more complex and defined over time, and in doing so were less likely to be able to retool themselves in response to dramatically changing business conditions.  His example was AT&T circa 1996, which had such a strong culture (and likely still does, even though it’s a different company) of reliability that it could not possibly build a Web hosting business that could not be accurate and functional one hundred percent of the time.  It ended up ceding this business to others who understood that this kind of reliability wasn’t a customer requirement.

I have my own example from the media.  I worked for a business publishing house about 14 years ago that owned its own printing shop.  In an era when magazines were printed, this may (or may not) have been a competitive advantage.  When print magazines largely disappeared, it was an unwanted albatross that couldn’t pay for itself, and couldn’t be unloaded.

Complexity serves a role in many organizations, because many projects are large and complex.  Many believe that the way to deal with complex projects is through complex, command and control solutions.

We see this in software development, where a multitude of requirements, coupled with the use of code from previous versions, made Microsoft’s Windows Vista an almost unusable mass of complexity.

Further, building a complex structure makes it extremely difficult to recalibrate to simplicity; in fact, Shirky claims it is impossible.  The structure, once it exists, is part of the corporate infrastructure and culture, and can’t be dismantled without dismantling the organization and the culture itself.

In contrast, the founders of 37signals believe that simplicity is the answer to more complex problems.  The company, by all accounts highly profitable, keeps lean, doesn’t market, and eschews meetings and other trappings of organization.

It may be natural to add complexity to an organization or society.  Shirky says that, up until a point of diminishing returns, it adds value.  Recognizing that point where complexity is more trouble than it’s worth is a difficult one.  But not doing so is a prescription for becoming hidebound and inflexible.



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