Complexity Reduction

Complexity Reduction helps companies simplify their strategy, organization, products, processes and information technology. Reduction in any of these areas opens up opportunities for simplification in others. Unwieldy complexity often results from business expansions or bureaucracies that unnecessarily complicate a company’s operating model, leading to sluggish growth, higher costs and poor returns. Complexity Reduction finds inflection points where products or services fully meet customer needs at the lowest costs. By streamlining product lines, for example, companies may be able to simplify organization structures and decision making to serve their core customers better while also reducing demands on business processes and information systems.

Usage and satisfaction among survey respondents


How Complexity Reduction works:

Complexity Reduction requires managers to:

  • Understand the sources of complexity and examine trade-offs between operations and variety or customization for customers
  • Identify opportunities to simplify products, organization structures, business processes and information systems to save costs while strengthening core capabilities and increasing the focus on customers
  • Take steps to stem the return of complexity by reexamining the hurdle rates for new products and other expansion activities
  • Simplify decision making by clarifying roles and processes

Complexity Reduction helps reveal hidden costs and allows companies to determine which products are making money, what customers really value and which organizational or process bottlenecks are getting in the way of effective actions, setting the stage for greater growth and increased profits.

Related topics Bain capabilities

Companies use Complexity Reduction to:

  • Identify and strengthen core capabilities
  • Build the business around customer needs
  • Create a disciplined approach to releasing new products or services and trimming those that customers no longer value
  • Design an organizational structure to support critical decisions
  • Maximize process efficiency
  • Align information systems with business objectives

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Selected references

Alai, David, Diana Kramer, and Richard Montier. "Competency Models Develop Top Performance." T + D, July 2006, pp. 47-50.

Campbell, Andrew, and Kathleen Sommers-Luch. Core Competency Based Strategy. International Thompson Business Press, 1997.

Critelli, Michael J. "Back Where We Belong." Harvard Business Review. May 2005, pp. 47-54.

Drejer, Anders. Strategic Management and Core Competencies: Theory and Applications. Quorum Books, 2002.

Hamel, Gary, and C.K. Prahalad. Competing for the Future. Harvard Business School Press, 1994.

Prahalad, C.K., and Gary Hamel. "The Core Competence of the Corporation." Harvard Business Review, May 1990, pp. 79-91.

Quinn, James Brian. Intelligent Enterprise. Free Press, 1992.

Quinn, James Brian, and Frederick G. Hilmer. "Strategic Outsourcing." Sloan Management Review, Summer 1994, pp. 43-45.

Schoemaker, Paul J.H. "How to Link Strategic Vision to Core Capabilities." Sloan Management Review, Fall 1992, pp. 67-81.

Zook, Chris. "Finding Your Next Core Business." Harvard Business Review. April 2007, pp. 66-75.

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