Products, customers, competitors, subsidiaries, countries, and partners, all increasing: are they making your business too complex?

Products, customers, competitors, subsidiaries, countries, and partners, all increasing: are they making your business too complex?






January 8, 2019

Every company wants to improve its results, and to do so, they can use very different ways. The most common ways they use to achieve this goal are whether improvement of the quality or the reduction of their costs. How do they do? What methods do they use? They want to sell more products, in more many locations, to target more customers and achieve better results. business-discussionOn the other hand, they also want to cut their costs and that is the reason why they implement subsidiaries in many different locations and countries because they think it is always a good solution. However, sometimes (if it is not often), they happen to be wrong about their evaluation and analysis about the process they chose to carry out. However, this article is not about preparation and wrong analysis of opportunities, but it aims at proving that complexity is the only result they get through these decisions. First of all, what is complexity? Complexus (Latin) means “twisted together”, which is quite a good definition of this concept. According to Wikipedia, “Definitions of complexity often depend on the concept of a “system” – a set of parts or elements that have relationships among them differentiated from relationships with other elements outside the relational regime. Many definitions tend to postulate or assume that complexity expresses a condition of many elements in a system and many forms of relationships among the elements.” Therefore, complexity appears through tremendous numbers of interactions between the numerous parts of a system. In fact, complexity keeps increasing while have more and more parts, which makes sense obviously. A very small business does not imply complexity because interactions and relationships are limited to a few numbers of parties and people. However, there might not be enough complexity in those businesses because it also means that results will not be as good as for bigger businesses. Obviously, we are talking about profit here. Consequently, it is very logical that companies want to grow, in order to improve their results and beat their competitors in the market. However, at some point, companies that cannot stop increasing anymore can end very badly, and this is because of over complexity. Beyond a certain point, expansion involves complications and the turnover starts to decrease, as well as profitability. Therefore, every CEO should have a look at its entire business, and the parties and relationships that consist it. In effect, your business might be becoming over complex because of useless interactions that make the business go down instead of helping it improve. All the content of this article can be summarised by the complexity curve below: complexity vs performance To conclude, we have no choice but to accept that the more complex your business become, the less money you will earn. Thus, CEOs must pay more attention to what is happening when expanding a business. In effect, management has to evolve while your business is expanding and that is the reason why it is important to take into account all the consequences that can appear every time you make a decision. Complexity can be unstoppable and make your business go bankrupt if you do not act before it is too late. If you want to understand more about growing businesses, you can read Vivek Sood’s book, The 5-STAR Business Network (

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Our Quick Notes On Five Flows Of Supply Chain Management

Part of our new “Quick Notes” series – this report answers your most pertinent questions of the topic.

  • What are the five flows of SCM?
  • Why are they important TO YOU?
  • How can you map, track, and optimise these flows to serve YOU?
  • What is the importance of difference between "Supply Chain" and "Value Chain"?
  • What are the stellar case studies of each of the five flows?


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  • Yes, it is agreed that the more complex your business become the less money you will earn and now everyone wants to improve their result so they need to make their business less complex.

  • Make Your Work More Meaningful by Killing Complexity
    Complexity is a danger to all organizations. According to me, if your company operates with complexity, it cannot operate with speed. So newer organizations, who provide simpler answers for customers can swoop in and take your business because you’re too slow and too busy working on reports.

    Don’t believe me? All you need to do is look at the success of companies like Uber (simplified rides), Airbnb (simplified hotels), and Netflix (simplified media streaming), and compare them to all the complex and slower to change businesses they left in their wake: taxis, hotels, and movie rental shops.

    See what I have found three simple ways to streamline your business to make your work more meaningful.

    1. Identify areas to simplify.
    Bodell advises employees and leadership to start killing complexity by making a list. Write down what tasks you do each day; then circle the most important (and meaningful tasks). When you look at the list, there will most likely only be a few things circled. The uncircled masses that surround your meaningful tasks are where you can start reducing needless work.

    2. Kill a stupid rule.
    Too many regulations stifle a business. In fact, much of what you do and how you do it isn’t even a regulation–it’s an assumption or a process at your company “we’ve always done this way.” These rules (or assumptions) are usually the processes that make work much more complex and fill it with meaningless tasks. With your co-workers, come up with a list of stupid rules (or assumptions) you can get rid of to simplify the work process.

    3. Empower decision-making.
    Finally, as organizations grow, the decision-making becomes more complex and layered. You become slower to respond to change and are prone to be bypassed by younger and simpler companies. By empowering employees to make their own decisions, you will need fewer meetings, which take away from meaningful work.

    Bodell suggests tasking team members with making two decisions a week without you (within parameters of the budget and what’s permissible by law, of course). Two great customer service companies–Zappos and Ritz-Carlton– do this all the time, empowering their employees to take ownership of satisfying the customer.

    As time goes on, increase the employee empowerment to make decisions. You will find your company responds quicker to events with more empowerment.

  • Most businesses start out with fairly simple processes, product lines, and structure. However, over time, adjustments are made, new elements are added, technology changes and operations become much more complicated. Eventually, it can be difficult to determine why things are done the way they are. Complexity reduction strategies must be formulated to deal with such complex situations. Complexity reduction strategies help organizations focus on customer value and eliminate unnecessary activities, expenses, and potentially even products.

  • In order to streamline and simplify, organizations must take a serious step. In my opinion, Identification of opportunities for complexity reduction could be helpful in this regard. One reason many organizations struggle with complexity is that it is very difficult to identify opportunities to simplify from the executive suite. Often the people who deal most closely with unnecessary complexity are front line employees and low-level managers. They should be enlisted in the search for wasted effort.

  • Is complexity good? The positive aspects of complexity are quite relaxing not horrifying. Few professionals appreciate diversity and purpose. In a complex environment, that demands more collaborative efforts, the modern worker requires less structure and more autonomy, self-determination and the opportunity to develop strong relationships with co-workers in order to excel. Complexity science addresses the system as a whole, not broken down into components. Adopting this holistic approach to create value allows a business to transform a static work culture environment into a dynamic, idea-rich culture.

  • Well, I believe in the other definition of complexity that says business complexity is the condition of having several interdependent and interconnected stakeholders, information technology systems and organizational structures. Stakeholders include employees, customers, partners, suppliers, regulators, investors, media and competitors. Organizational structures include divisions, subsidiaries, and joint ventures. Globalization, high-speed telecommunications links, regulatory requirements, and technology are among the reasons for more complex businesses. This is a pretty convincing definition of complexity perhaps.

  • While discussing business complexity, more important is to talk about managerial complexity. How business and managerial complexities are interrelated? Managerial complexity increases with business complexity. Decisions in complex organizations take longer because the consequences of mistakes are greater. The complexity in large businesses asks managers to do more with less. This involves focusing on the big picture, delegating operational responsibilities to capable people and managing resource allocation.

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