Background

The strategic simplification methodology is issued from the “clinical” observation by practitioners of the efficiency with which companies are being run or projects are being rolled-out. The key point is that, when you look at a large enough sample of organizations, from the inside and with the critical view of an experienced professional, you can not help being amazed by the wide gap that exists between field reality and theory as promulgated by management gurus and business consultants.

The huge discrepancy between the "as-is" and the "should-be" is usually well recognized within organizations but it is almost always considered as a transient situation. Managers in charge try to convince themselves that this situation will vanish once a given set of measures will have been taken. Implementing those improvement measures – like business automation, quality programs, best practices benchmarking, organizational re-shuffling – takes most of the management energy and attention. In actuality, instead of being a transient situation this becomes a permanent adjustment process toward an ever-moving target. This, in turn, becomes translated in ever more endemic business inefficiencies because the rate at which complexity increases outpaces productivity gains.

This is not a pessimist's perception, nor a perfectionist's view but rather the view by practitioners of the consulting business. The counter-argument is that many businesses are profitable, so what sense does it make to attempt to do more than improving the current situation or to embark on a philosophical quest about the right approach to do business or to challenge a modus operandi that has enabled substantial gains in shareholders value over the last century or so?

The fact of the matter is that many large business endeavors and many complex projects yield initially disappointing results. They seldom fulfill the initial expectations that were at the base of their go-ahead. They either exceed their budget, pass their planned delivery date or fall short of yielding the expected productivity gains or return on investment. The acid test of success versus failure is the discrepancy between how you envisioned the business endeavors and projects before they got kicked off and how they turn out to be a posteriori. Even statistics published on the subject tend to underestimate the extent of the problems because people tend to loose sight of the global picture or just forget the initial expectations.

Given the challenge of running efficiently a complex business or delivering a large project meeting its initial objectives one can basically adopt two attitudes to increase one’s chance of success:

• either lower the bar of the expectations by reducing the complexity,
• or attempt to equip oneself with a sophisticated paraphernalia of tools and methods in the hope of passing the bar anyway.

By and large, the latter attitude is considered as “the right attitude”, the attitude of the winner, the attitude of someone committed to succeed in an ever more challenging and evolving environment. Most of the consulting services, the business literature, the corporate cultures promote the latter attitude. Methodologies, business process re-engineering, best practice benchmarking, quality assurance procedures, personal enhancement techniques are all touted as viaticum toward success. But the important thing about “raising the bar” is not to loose sight of the fact that the overall improvement effort still needs to make business sense. The symptoms showing that a company has raised the bar too high appears in many places : the effectiveness of its information systems, the reliability of the management reports produced and the insight into corporate performance that they provide, the number of customer complaints, the drop in the market share, the personnel turnover. When those business enhancing tools and methods consistently fail to meet corporate-wide business objectives then the first attitude - the one that consists in lowering the bar of the requirements – appears to be the wiser one to adopt.

Whereas traditional consulting is all about the second attitude, the IT Cortex Strategic Simplification methodology is all about that first attitude: lowering the bar of the expectations as low as it makes economic sense, as opposed to fit oneself with superfluous equipment to pass any possible hurdle. A business must grow and be profitable. It does not need to apply rocket science to all its processes, it does not need to be flexible and generic enough to fulfill the weirdest customer demands, it does not need to be automated to the point where every single exception can be handled by its information systems. In order to grow a business must deliver quickly the highest possible value at an acceptable cost to the bulk of its market. Strategic Simplification is the pursuit of that objective by pruning the complexity out of a business to a point where customer value is optimized with respect to the cost of delivering the products and/or the services.

This methodology has been inspired by the approach taken by many business entrepreneurs. Business entrepreneurs tend to focus more on the essential so as to reach the break-even point as quickly as possible and enable their budding business to grow on its scarce resources. In order to reach quickly the profitability threshold they have to concentrate on core activities and not get drown in intricate implementation details. Moreover entrepreneurs want their business to grow in value as quickly as possible (possibly to sell it and move on). That’s why they prefer to skim their market instead of attempting to catch the last possible fraction of the market share at a dreadful marginal cost. Instead of pulling 80 % of their resources on the unprofitable 20 % market segment their prefer to use them to move on to other markets, i.e. other business segments or other geographical areas. Often, and sometimes unknowingly, they apply the 80 – 20 rule.