The Complexity Crisis

Why are air travel prices so complicated? Perhaps because they result from sophisticated calculations designed to optimize revenues. So why is Southwest the most profitable airline in the U.S., with the simplest price grid in the industry? One reason is that Southwest saves a lot of time and money by refusing to apply complex pricing systems, because it no longer needs to deal with complicated marketing policies, cumbersome IT systems, disgruntled customers upset about not getting the best price, etc.
According to John Mariotti, complexity suffocates many companies. To grow, they launch new products willy-nilly, establish management systems, introduce new procedures, etc. However, they are not very good at assessing the consequences of these decisions in terms of organization, and find themselves with the impossible task of trying to manage a can of worms. This book analyzes this phenomenon and gives advice on how to restore simplicity in an optimal manner.
The author underlines that complexity is not a bad thing per se. Yet, he says, complexity must be decided proactively based on the corresponding value added. Chapters 9 to 12, each devoted to a sector of the economy (examining Ford and General Motors for automotive, Subway, Dairy Queen and McDonalds for fast food, etc.), provide a number of relevant illustrations of this principle at work.
One thing that turns complexity into a crisis is the increasing number of products commercialized by individual companies. This topic is analyzed in depth in chapters 1 through 4, as well as chapters 13 and 14, with examples like Titleist, global leader in golf balls, Huffy and 7up.
Another recurrent theme is the tendency of companies to set targets that are too ambitious and their fascination with innovation. Chapters 5, 7 and 16 show how these two phenomena drive businesses to generate complexity and raise their costs in the process.
Among the helpful measures suggested, the author underlines the need to measure the level of complexity of a business and the corresponding costs (chapters 8 and 19). Chapters 6, 17 and 18 also provide many tips for streamlining and simplifying organizations and work methods, with examples like Motorola and Dell.