Keep it simple, keep profits flowing

Most times, simpler is better. In a business context I mean products, processes and strategies.  

Basically, when you make things simpler they are easier to do, manage, build, sell and maintain. That does not mean that you need to compromise functionality or productivity, only that you should constantly seek out ways to achieve the same end with less steps, less parts and less complexity.

The benefits are less mistakes, fewer recalls, higher quality and productivity.

If we accept that every step in a process or each part in a product has a small probability of an error, mistake or defect, then the more steps you have or the more parts you have, the greater the probability of a problem occurring.

So as a management discipline, we should be seeking out ways to simplify designs by reducing the number of parts, reducing the number of steps in a transaction, and reducing the number of elements we need to control in our business strategy.

Whether your approach is through design engineering or quality management, your objective should be to improve your business processes and outcomes.

You need to instil a culture in your business where everyone is on the lookout for opportunities to make things simpler. Think of the now famous kaizen approach to continuous improvement. While this came to notice primarily through the car manufacturing industry, the concept of constantly seeking out minor improvements can be applied to every part of a business.

One technique that you could implement is that of the marginal constraint. Basically, you seek to find the initial barrier to improvement and work on that until it is eliminated.

The exercise then starts again until the next barrier is found.

Whether you are reducing time to assemble or time to process a transaction, something will constrain your ability to achieve greater productivity. Using a variety of creative techniques, you look for a way to eliminate the constraint.

Think of designing a kitchen. Can you reduce the number of steps you need to take to assemble all your ingredients and utensils? Or the amount of time you need to devote to putting items away when you wash up? By making small incremental adjustments, we gradually improve productivity.

Design engineering seeks to improve or retain functionality by reducing the number of parts, especially those parts that have the highest failure rates.

Find those parts of the product that have the greatest incidence of failure and find ways to design them out, reduce their impact or improve their time between failure. A systematic approach to failure reduction will make small incremental improvements which, over time, will make a significant impact on quality levels.

We often make life too difficult for ourselves in business. We take on too many projects, work in too many markets, and offer too many options.

Take an 80/20 view of the business. Can you be more productive, more profitable and achieve higher growth rates by reducing complexity?

Tom McKaskill is a successful global serial entrepreneur, educator and author who is a world acknowledged authority on exit strategies and the former Richard Pratt Professor of Entrepreneurship, Australian Graduate School of Entrepreneurship, Swinburne University of Technology, Melbourne, Australia.