Keep it simple - Implement Consulting Group

Keep it simple
MANY ORGANISATIONS TALK ABOUT KEEPING IT SIMPLE – BUT ONLY FEW MANAGE TO DO IT
By Niels T. Søndergaard, Implement Consulting Group,
Niels Ahrengot, Implement Consulting Group and
Lars Petersen, Rynkeby Foods A/S
It is actually pretty simple
When you ask successful people how
they became successful, they often start
by saying “it is actually pretty simple
...” – and then they explain the main idea
of the approach.
• The Norwegian cross-country skier
Björn Dählie’s tactics for winning more
gold medals in the Olympics and
World Championships than any other
cross-country skier were simple: “I start
out at my maximum effort – and then I
increase”.
• The battleship HMS Dreadnought’s
tactics for winning naval battles in the
time around World War 1 were simple:
fewer and bigger guns (i.e. focus).
• Rynkeby Foods A/S’ strategy for
doubling its top line and tripling its
bottom line was simple: fewer products
and fewer brands for a larger market
(i.e. focus).
• Southwest Airlines’ strategy for
achieving success in one of the
toughest marketplaces – the domestic
travel market in the US – was also
simple: one single type of airplane
(Boeing 737) and an airline network
matching this plane (i.e. focus).
Complex solutions
There are many good simple solutions.
There are also many complex solutions.
Complex solutions often find their way
to the drawing board, but they never see
the light of day – because they are too
complex to implement. If the basic idea
and the purpose of a solution cannot be
explained in a simple way, then how is it
possible to implement the idea in large
organisations or in entire populations?
Especially if the goal is to get these
large groups of people to embrace the
solution and feel ownership of it.
There are many reasons why we often
develop and implement complex
solutions.
Over time, a solution system can become
complex, which partly explains why old
organisations often have more complex
solutions than young ones. Perhaps you
lack insight and experience to identify
the best simple solution. Perhaps you,
unintentionally, want to demonstrate
your knowledge and capability, thus
making the solution more complex than
necessary. Or perhaps you lack resources
or time to make the solution simple. The
last part may be illustrated by a quote
by Mark Twain: “I didn’t have time to
write a short letter, so I wrote a long one
instead”.
I didn’t have time to write
a short letter, so I wrote a
long one instead
– MARK TWAIN
Finally, new technological possibilities
and knowledge may render simple
solutions possible, which were not
possible before.
At Rynkeby, the product portfolio had
grown over the years. The total amount
of products peaked in 2010 with more
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than 700, the majority of which were
considered niche products, which had
been part of the product portfolio
for many years, and still were, due to
historical reasons.
Many of Southwest Airlines’ compe­ti­
tors are large, well-established and old
airline companies. Their airline network,
fleet and customer groups are the result
of many years in the market, and the
network is very complex and hetero­
geneous. These old airline companies
are trapped in the very system that
they have spent years developing; thus,
they are not able to quickly emulate the
success of Southwest Airlines.
Ripple effects
An important aspect of implementing
new solutions is that the solutions to
a problem almost invariably affect the
system where the implementation takes
place in up to several secondary systems.
A complex solution will, thus, most
often spread its complexity to corners
of an organisation that you could not
have anticipated. A simple solution, on
the other hand, will foster other simple
solutions.
The introduction of a new Rynkeby
product with new ingredients (e.g. new
fruits) and new packaging aimed at a
new customer segment (e.g. home freeze
ice) will affect most of the organisation.
If Southwest Airlines were to buy a new
type of airplane, it would take training
of pilots, mechanics, flight attendants
etc., new spare parts in stock in several
airports, definition of a new parameter
for the staffing schedules etc.
Inspiration for
simple solutions
Developing and implementing simple
solutions is often a challenge, but most
leaders see the advantage of breaking
the code and pursuing a simple solution.
Thus, we need good sources of
inspiration to create simple solutions.
Even though it is more than 100 years
after the launch of HMS Dreadnought,
it is an example of a beautiful, simple
solution, which may provide inspiration
for developing and implementing other
simple solutions. HMS Dreadnought is
a holistic example – not least in relation
to the aspect of ripple effects – but its
strength lies primarily in inspiring an
intelligent and challenging dialogue
about the solutions in our organisations.
HMS Dreadnought 1906
HMS Dreadnought was launched in
the autumn of 1906 by the British Royal
Navy. Many of the ideas behind the
design of HMS Dreadnought had been
in the making for quite some time, but
the ship was built in the exceptionally
short time of one year and one day,
which at that time was considered
extremely fast.
The impressing construction time is
the first of many advantages of the
Dreadnought – and, as it turned out, there
were many more advantages of the ship.
The Dreadnought became an undeniable
success. Towards the end of 1906, all
other major seafaring nations at that
time had decided to build battleships
based on the same basic idea as the
Dreadnought.
All battleships of this size that were
built after the same idea – meaning all
battleships – were subsequently referred
to as Dreadnoughts. If you read about
one of the world’s largest naval battles,
the Battle of Jutland on 31 May 1916, you
will notice that the British and German
fleets first and foremost are summed
up by how many Dreadnought-class
battleships each side could muster.
HMS Dreadnought was such a great
success that all large battleships
designed before 1906, or which
were built after the old principles for
battleships, were referred to as
Pre-Dreadnoughts. That is a rare
success. Imagine a new make of car
that renders all old cars obsolete. For
instance a car of the make Pre-Tesla.
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Figure 1: HMS Dreadnought
Innovative simplicity
HMS Dreadnought was an innovative
new battleship in more than one way.
The ship was the first of her size to be
powered by Charles Parsons’ newly
invented steam turbine. With a top speed
of 21 knots, HMS Dreadnought was the
world’s fastest battleship – and she might
have been even faster – but it was found
more important to increase the armour
of the hull instead of making her even
faster.
The most innovative feature about HMS
Dreadnought was simplification. HMS
Dreadnought only carried 10 heavy guns
of 12-inch (305 mm) calibre, whereas the
philosophy behind Pre-Dreadnoughts
was to carry as many guns on board as
possible and as many different types of
calibre as possible. The idea behind PreDreadnoughts was a floating fortress.
Thus, HMS Dreadnought represented a
new way of designing battleships.
Consider the difference for a moment.
The Dreadnought is a very simple ship
with five 12-inch twin-gun turrets – and
then nothing else than a streamlined
deck and hull.
Pre-Dreadnoughts (e.g. the Japanese
battleship Mikasa) carry different types
of large-calibre guns, a number of
various types of medium-calibre guns
and some small-calibre guns. The deck is
packed with guns of various calibres.
Imagine the ships in battle. Imagine the
maintenance work. The training exercise.
The ship in harbour – and the departure
from the dock. The construction of the
ship at the shipyard.
The advantages
If you compare the advantages and
disadvantages of HMS Dreadnought,
and especially the innovative idea of
reducing the number and types of
guns, the advantages far outweigh the
disadvantages.
Identifying and discussing the
advantages is a good exercise for a
management group or another group
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Keep it simple
Figure 2: Mikasa
FIGURER/GRAFER/
TABELLER/BILLEDER
Kan følge en spalte
that is about to simplify something in
their organisation.
The exercise will result in a long list
of advantages – and it may turn into
a competition of finding the most
advantages.
Here is a selection of the most significant
advantages:
Competences and manning
The quality and flexibility of the manning of the guns during battle and in the
maintenance task were a major advantage. Training was easier. When someone
was injured or died during battle, they
could easily be replaced, because many
were trained in manning the same kind
of gun.
Stock management and quality defects
Optimisation of stock management of
ammunition and spare parts for the
guns – thereby avoiding “stock-outs” and
minimising stock investment. Elimination
of quality defects in the choice of
ammunition – there was only one kind of
ammunition, so you would never choose
the wrong one in the heat of battle.
It was also easier for the purchasing
manager to negotiate bulk discounts
with the ammunition supplier, and it
was easier to load ammunition (and
spare parts) on the ship, and, in some
situations, it was of vital importance to
quickly get out to sea again.
Building time and costs
The first Dreadnought was, as previously
mentioned, built in the exceptionally
short time of one year and one day,
which was extremely fast at that time.
The Dreadnought-class battleships were
quickly put into series production – not
just in Britain, but in all the major warcapable nations at that time. A qualified
guess is that the Dreadnought-class was
far cheaper to build than the floating
fortresses (Pre-Dreadnoughts).
Range
It was possible to fire at targets well
past the range of 11 kilometres, which
was the typical range of secondary
guns at Pre-Dreadnoughts. Thus, the
secondary guns at these ships became
useless and the fight uneven as
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Pre-Dreadnoughts only carried few
large-calibre guns.
Success rate
The teams in each turret could easily
draw on each other’s experience during
an encounter to quickly strike a target,
which had not been the case with the
different calibre guns on the previous
battleships – the guns behaved differently
depending on the calibre.
This was a decisive advantage of the
HMS Dreadnought seeing that the
success criterion of a naval battle is
to hit the enemy as quickly as possible with most hits. Furthermore, HMS
Dreadnought optimised this advantage
by being the first ship to install electronic
communication between control turrets,
control positions and transmitting and
plotting stations. Thus, information about
distance, firing angle etc. could quickly
be used by all guns.
When you come to think of it, there
is a very long list of advantages. For
instance less weight and higher speeds,
the number of people on board, the
level of confusion and disorder on deck,
especially during combat, the number of
friendly fire accidents and the strategic
clarity – the simple configuration of HMS
Dreadnought forced the admirals to
formulate a more focussed and clear
strategy.
the people who best mastered the many
complex aspects of this field was
probably Albert Einstein. Einstein led
the way towards simple solutions within
this complex field by formulating one
of the simplest and most beautiful truths
describing the energy of light: e = mc2.
Albert Einstein is quoted as saying:
“Any intelligent fool can make things
bigger, more complex and more violent.
It takes a touch of genius – and a lot
of courage – to move in the opposite
direction”.
Any intelligent fool
can make things bigger,
more complex and more
violent. It takes a touch
of genius – and a lot of
courage – to move in the
opposite direction
– ALBERT EINSTEIN
Insight and courage were also factors
in the story about HMS Dreadnought.
Originally, it was an Italian naval engineer
who came up with the idea behind HMS
Dreadnought. He initially tried to sell the
idea to the Italian government, but they
turned him down. Instead he sold the
idea to the British Royal Navy.
Many organisations strive for beautiful, simple solutions, which HMS
Dreadnought is a perfect example of.
In a way, most of us can probably understand the Italian government’s representatives. After all, the idea entailed sending
Italian soldiers on board a ship carrying
only 10 guns – normally they boarded a
floating fortress. That took courage.
What does it take to find the beautiful,
simple solutions in a given situation? Two
things: insight and courage.
HMS Dreadnought and
your organisation
Insight and courage
The more complex a situation and
problem we need a solution to, the
more insight and courage does it take
to develop and implement the beautiful,
simple solution.
One of the most complex fields of
science is nuclear physics, and one of
HMS Dreadnought er i sig selv en
HMS Dreadnought is an interesting
case about a beautiful, simple solution,
generating many second-order and
third-order advantages. However, the
HMS Dreadnought case may become
even more interesting if you apply it to
your own organisational reality.
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You can for instance ask yourself:
• In which way does my own
organisation resemble HMS
Dreadnought?
• Which solutions in my own
organisation resemble
Pre-Dreadnoughts?
Often, the comparison is nearly identical.
Competences and manning
Does my organisation focus on a few
selected core competences? Should we
focus on developing and maintaining
many different types of competences,
not all of which are strategically
important to us, but we would not be
able to run our business without them?
Have we outsourced those competences
which we are not very good at ourselves
and instead focussed on having a lot
of skilled people in our core areas? Are
we in a situation where a couple of
terminations would make it extremely
difficult for us to run our business?
Dreadnought, you would never end up
with the wrong ammunition.
Building time and costs
Here we have many examples. Among
the more well-known examples are some
of the government’s failed IT projects.
Some of these projects are shut down
during the course of the project – the
solution simply becomes too complex
(e.g. Polsag). Other projects implement
a solution that is up and running for a
short period of time, but the solution
is simply too difficult to operate and
maintain, resulting in a quick shutdown
(e.g. Amanda).
Scope
Are you interested in targeting your
resources or spreading them thin on a
broad range of projects? How deeply can
you penetrate the market and with what
effect if you are to market 13 brands – and
what effect can you achieve with the
same amount of money for only two
brands?
Stock management and quality defects
Success rate
Many strong-performing companies,
which over time have established a large
and complex product portfolio, are fully
aware of the disadvantages related to
this type of portfolio. Many of them also
know how difficult it is to simplify a large
and complex product portfolio, even
though maths tells us that less than 20%
of the products generate more than 80%
of the top and bottom line. This may go
on for several decades – right up to the
point where new competitors penetrate
the market with a new and “clean”
product portfolio.
How easily can you target your
customers? If you have a simple product
with a simple price structure, which
everybody can easily understand and
relate their needs to, you have a better
chance of targeting your customers
than if you have a price model which
the customer does not understand.
A Harvard Business Review article on
complexity provides an example where
a car manufacturer gives the buyers the
option to select a tinted windshield. Seen
in isolation, it is a good business case,
because customers who select a tinted
windshield are willing to pay more for
it than the actual additional cost of it.
However, the process involves a lot of
spillover costs and prolonged delivery
time. Another disadvantage is the
chance of errors creeping in during the
assembling phase – in the case of HMS
The list of examples of HMS Dreadnought
and Mikasa (Pre-Dreadnought) in a
given organisational reality may become
long, but in most cases, the Mikasa list is
somewhat longer than the Dreadnought
list.
Time has rendered HMS
Dreadnought obsolete
The Battle of Jutland took place in
1916, 10 years after the launch of HMS
Dreadnought. For 10 years, it was
paramount to have a fleet with as
many Dreadnoughts as possible, and
then, all of a sudden, times changed.
HMS Dreadnought’s time was up.
Torpedoes, submarines and later on
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airplanes became decisive weapons in
naval warfare, and thus the design of
battleships needed an overhaul.
A parallel can be drawn to
most organisations and most
solutions – the intelligent,
beautiful, simple solutions also
have their time, before they are made
obsolete by new technology and ideas.
Then it is time to develop new beautiful,
intelligent and simple solutions.
Southwest Airlines
Southwest Airlines is a good example of
a modern Dreadnought. The passenger
airline industry in the US is probably one
of the toughest markets to compete in,
and in this market, Southwest Airlines
manages to turn a premium profit
year after year. The long-established,
large airline companies simply cannot
compete with Southwest Airlines.
What Southwest Airlines has
accomplished is simple and exactly the
same as what made HMS Dreadnought a
winner. They have committed themselves
to one single type of airplane – the
Boeing 737. Many of the advantages
of HMS Dreadnought also apply to
Southwest Airlines, including strategic
clarity. Southwest Airlines only operates
air services suitable for this type of
airplane and their setup – they are not
tempted to do anything that might add
complexity to it and jeopardise their
impressive bottom line.
Rynkeby Foods A/S
In 2010, Rynkeby Foods A/S carried out
a kill complexity project referred to as
“Growth Through Simplification”. HMS
Dreadnought was used as the main idea
behind the solutions, and the project
provided a platform for Rynkeby’s new
strategy where one of the three mustwin battles focussed on changing the
production from Mikasa to Dreadnought.
HMS Dreadnought became a key story,
which helped explain the ideas behind
the strategy – not just in relation to
production, but also the intention to
reduce both the number of products
and the number of brands. Another main
goal was to simplify the strategy, which
had become quite complex and thus
difficult to communicate.
The purpose of the project was to
double the turnover and triple the
bottom line.
EXAMPLE
A good example from the Rynkeby project, illustrating that
kill complexity is more about culture than anything else, is the
two new power brands Rynkeby and God Morgon. These were
the two strongest brands in Rynkeby’s two largest markets,
Denmark and Sweden.
God Morgon was set out to be the new premium brand. There
was just one minor problem. The name was Swedish, so how
would the Danish customers react to it? That caused some
speculation and sleepless nights. Then a bright employee
from Sales and Marketing – who was enthusiastic about the
kill complexity mindset – got a great idea. By moving the small
orange that covered the first “o” in God Morgon to the second
“o” instead, the problem would be solved as it could just as easily cover an “e”. (In Danish it is “God Morgen” – in Swedish it is
“God Morgon”).
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The figures
The targets of the project were
as follows:
• To reduce the number of brands
from 13 to 2
• To reduce the number of production
lines from 13 to 9
• To reduce the number of products
from 700 to 200
• To focus the strategy on only
3 must-win battles
– and the strategy was boiled down to
half a piece of paper.
In recent years, Rynkeby Foods A/S
has come close to reaching all their
declared goals, but complexity
constantly puts pressure on Rynkeby,
and especially the number of products
is under pressure to grow. This shows
that it is important to work with simple
solutions on a continuous basis as well
as making meaningful simplicity part of
your culture.
Dreadnought is
easy to imitate
In a business context, the example of
HMS Dreadnought from time to time
gets accused of being too simple,
because sometimes it is easy to imitate
a simple solution – but not always.
HMS Dreadnought was easy to imitate,
and in early 1907, Germany, the US and
Japan as well as other countries had
launched Dreadnoughts, eliminating
the competitive advantage of the Royal
Navy. Even though the idea was quickly
imitated, there is still an advantage of
being the first to present a new, simple,
intelligent solution. Sometimes first
movers steal the entire market, and, at
some point in time, it becomes too late
to jump the wagon – just ask Nokia about
smartphones.
It has been difficult to imitate Southwest
Airlines, at least for the long-established
airlines on the North American continent,
since they are bound by their fleet
consisting of many different types of
airplanes and the airline network they
have operated for many decades.
Dreadnought as a common
language and catalyst
The strength of the HMS Dreadnought
case is that it may act as the motivating
and explaining force in a project and a
change in an organisation with a wish to
pursue more simple solutions.
HMS Dreadnought can provide a
common language to talk about specific
solutions in the organisation. When
referring to HMS Dreadnought (and
perhaps also Mikasa), it is easier for a
person to understand what the other
person is trying to explain and which
idea they have had.
HMS Dreadnought may act as a catalyst
for inspiring courage or perhaps even
challenge us into making more simple
solutions. If applied correctly, HMS
Dreadnought may be what some people
refer to as an “appropriate disturbance”
in relation to people’s world view – this
world view needs to be disrupted in
order to create more simple solutions.
From IT over HR to marketing
Empirically, the HMS Dreadnought case
can be applied to almost all contexts
with the aim of inspiring more simple
solutions, e.g.:
• The organisation’s overall strategy
• HR processes and solutions
• Quality management systems
and practice
• The product portfolio
• The marketing strategy, e.g. brands
and category management
• The production strategy
• Enterprise architecture
• Etc.
Dreadnought
When discussing strategies, change
processes and an organisation’s
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future, the main focus is aimed at the
process – and it should be – but it is also
important to spend time, resources and
energy on fostering the solutions of the
future, and the two things are closely
linked: process and solution.
As previously described, it only takes
two things – insight and courage. Insight
covers a wide spectrum, including
experience and intelligence, but also the
acknowledgement that it takes time and
resources to identify beautiful, intelligent,
simple solutions.
Courage is, to a great extent, about
showing courage in your leadership as
well as decision-making, and in many
ways having courage is more simple
than having insight, but in a given
situation, it is often more difficult to
show courage – exemplified by the
Italian government’s rejection of the
Dreadnought idea.
As it is a crucial point to have courage and
fear nothing, the name of our vessel
HMS Dreadnought could not be more
fitting.
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