HBR case summary Simplicity-Minded Management (by Ron Ashkenas )

1. HBR case summarySimplicity-Minded Management (by Ron Ashkenas)

2. 1. Introduction 1.1 Complexity, a Main Problem of a Company As globalization, emerging technologies, and new regulations become important issues to companies, companies become more and more complex. Complexity Issues to companies • Too many brands • Difficulty in assessing unit performance • No common method for tracking, reporting, or analyzing results • ……. • Globalization • Emerging Technologies • New regulations • Ex)Sarbanes-Oxley

3. 1. Introduction 1.2 Complexity in ConAgra Foods(real case) Successful growth strategy eventually made ConAgra’s lack of cohesion and complexity. ConAgra’s Growth Strategy Acquiring well-known brands like Reddi-wip, Egg Beaters, Chef Boyardee, and Hebrew National Allowing the acquired organizations to operate relatively autonomously • One of the largest packaged food companies in North America • Since 1970s, it has adopted strong growth strategy which appears to be successful Successful But, made it complex

4. 2. The Causes of Complexity 2.1 Four main causes of complexity There are four main causes of complexity, structural mitosis, product proliferation, process evolution and for the last, managerial habits. Structural Mitosis Product Proliferation • In most large organizations, structural shifts are happening all over the enterprise, all the time • The steady accumulation of structural changes drives up complexity over time • Most large organizations are better at adding new products and services than they are at eliminating • In fact, customers want fewer new features on some of the company’s core equipment Causes of Complexity • Many disciplined improvement techniques such as CRM, sales forecasting have failed except Six Sigma, lean manufacturing and so on. • All those processes evolve over time, but result in too much variability and inefficiency • Managers frequently behave in a way that exacerbates the problem, though they have the best of intentions • Poor e-mail etiquette and meeting management are the main causes of complexity Managerial Habits Process Evolution

5. 2. The Causes of Complexity 2.2 How Managerial Habits Cause Complexity The complexity is usually caused by the system of a company, but each individual in a company have significant effects on the complexity. Poor meeting management Unclear, redundant, or conflicting assignments Micromanagement • Many managers insist on an excessive level of detail, generating needless hours of work • Sometimes, employees are spending more time in meeting rooms than on project work • “go study this”, “get this started”, “work with this so-and-so and get back to me” • Similar or overlapping assignments to different people E-mail etiquette PowerPoint Perfection E-mail overload is a serious source of organizational complexity Recirculation of documents in multiple drafts and redrafts is a significant sources of complexity Presentations can overwhelm decision makers with data, arguments, and entertainment Presentations that are so long and complex bore their audience

6. 3. Simplification as Strategy 3.1 Streamline the Organizational Structure Once managers have clearly framed simplification as a business imperative and connected it to measurable goals, managers can begin an ongoing attack on structural mitosis. Transforming ConAgra Foods by Rodkin(1) Before After finance Product supply finance Sales Product supply R&D HR IT Business Unit #1 Sales …… Business Unit #2 Business Unit #1 Business Unit #2 Business Unit #3 Business Unit #3

7. 3. Simplification as Strategy 3.2 Prune Products, Services, and Features There are some important questions: Are there too many of them? Which are profitable and have the greatest growth potential? Transforming ConAgra Foods by Rodkin(2) Before After #1 #2 Growth Brands #3 #3 #1 … #4 #5 …… Potential for Divestment Manage for Cash #100 #101 #7 #10 …… … #50 #101 … More than100 brands were assumed to be equal Sold out

8. 3. Simplification as Strategy 3.3 Build Disciplined Processes By RoadMap, similar to the GE Work-Out, ConAgra Foods could make more efficient processes. Concept of RoadMap Before RoadMap Critical, but improper process Massive amounts of data that run hundreds of pages Idea for redesigning the process RoadMap Meeting After RoadMap By RoadMap, ConAgra had a far simpler set of enterprisewide processesfor reporting, planning, capital expenditures and so on. Employees related to the process (more than 60 people)

9. 3. Simplification as Strategy 3.4 Improve Managerial Habits Managers need to identify how their own patterns of behavior complicate matters, and make a personal commitment to simplification. What Rodkin did to improve managerial habits “Jump ball problem” Occasionally fail to specify which person should take the lead on a cross-functional or cross –unit issue After discussing this tendency with the rest of the leadership team, Rodkin was able to reduce the frequency of jump balls Innovative product ?? R&D Consumer sector

10. 4. Conclusions There are some important messages which you need to keep in mind in this HBR case. A simplification strategy must be treated as a business imperative, not a soft, “nice to have” virtue. 1 You need to keep in mind this phrase: “you can be the main source of the complexity which you hate.” 2 Making your organization simple and keeping it that way takes a lot of hard work 3