Learning a New Complexity Language

Laurent Dumarest
Gillis Jonk
Bart van Dijk

Consumer goods have never come in so many shapes, sizes, color and flavors. And that complexity can be a good thing. That extra bit of service, a brand extension, another package size, a touch of customization—such efforts can add up to extra sales and market share. Yet complexity can also be costly enough to offset the benefits. If the relationship between the cost and the value of complexity were clear, managing the trade-off between the two would be simple.

Unfortunately, this relationship can be hard to define. For instance, a branded food manufacturer knows its customers value its range of flavors and tastes, different packaging sizes, perhaps even quality levels, and the periodic variations of its products. But it’s not likely to understand exactly how these different factors contribute to the total value created.

Companies that have steadily grown to become multinational corporations, with multiple factories and sales organizations, also often find that complexity costs and complexity value are hard to reconcile. In such situations, effective complexity management becomes a real challenge, and chances are excellent that complexity has gradually built up to become unnecessarily expensive.

Complexity reduction efforts are generally focused inside the different functions in the organization rather than being integrated throughout. Such approaches cut down on non-valueadding complexity that has built up over time, but they don’t necessarily help increase the value brought to the market. The authors discuss a new approach to managing—rather than just reducing—complexity by creating a “complexity language” that connects the complexity-loving and complexityhating parts of their organizations.