Simplify or Die

By Doug Stephens

Is your business or industry model unnecessarily complex?  If not, you’re lucky.  If so, read on.

I sometimes hear executives point to specific industry nuances and idiosyncrasies as reasons why they feel it would be difficult for an upstart competitor or technology to replace them. They not only tolerate but in some cases actually perpetuate obscurities in their industry in an effort to keep the future at bay.

Complexity in any industry can create a false sense of protection against disruptive change.  When we work in complex industries, we begin to believe that anyone trying to compete against us will have to play by the same tangled web of industry convention and ridiculous rules that we do.

I can’t help but think that the music industry must have felt that way; that contracts between artists and labels were simply too convoluted to allow for competitors to challenge them. Enter iTunes and innovative indie recording models like ArtistShare.

I’m sure the travel industry saw the (sometimes unscrupulous) relationships between travel agencies, tour companies and carriers as being too intricate and confusing to travelers to book their own vacations.  Enter Travelocity, Expedia and others.

And it’s becoming abundantly clear that the publishing industry over-estimated the potential for the complexity of its rights, royalties and distribution issues to act as a guard against being dis-intermediated.  Enter Lulu.com and Kindle Self-Publishing.

The point here is that the complexity of your business model is not a defense against the future.  If anything, it’s what makes you most vulnerable.

My advice to any business or industry that is overtly complex is simplify it… fast.  If your business model sucks, don’t just hide the fact under more layers of convolution.  Change it and own the new model.  Removing complexity is never easy, but it’s essential because as history shows, if you won’t simplify what you do, someone else gladly will.