Category Archives: Simplification

What is a “Plug”?

For some reason, I have been reading and thinking about forecasting for the last little while. One of the words that seems to be popping up more and more frequently in the business literature with respect to forecasting is the word “plug”. I have actually heard this word in past forecasting meetings that I have attended. I thought I might delve in a level deeper than just understanding forecasting, and look into one of the more favored words in the forecasting vernacular: “plug”.

Plug is an interesting word. The dictionary defines it as both a noun (a thing) and a verb (an action). I’ve also talked about words like this before. You used to go to a party, and now you can also go and party. I think that plug is a much earlier iteration of this particular phenomena. Usually a word is used as either a noun or a verb. I am not so sure that this is the case with the word plug when it comes to its business usage. I think that when you hear the word “plug” in business, it is both a thing and an action at the same time.

As a noun plug can usually mean either:

“an obstruction blocking a hole, pipe, etc.” or “a device for making an electrical connection, especially between an appliance and a power supply…”.

As a verb Plug can usually mean either:

“block or fill in (a hole or cavity)” or “mention (a product, event, or establishment) publicly in order to promote it.”

For now, I think I’ll ignore the appliance power cord and product promotion definitions for obvious reasons, and focus on the other two.

As the ends of various months, quarters, and years come into view, forecasting takes on a role of increased importance. Depending on the business performance, as these end of period times roll around forecasting can take on both a greater frequency and intensity, especially if the numbers are not in management’s desired range. As I have noted, forecasting is essentially the comparing of what you think the numbers are going to be with what you want the numbers to be.

I have also noted the “volumetric force” associated with forecasts. This is the management drive and desire for all forecasts to be either at or exceeding the desired targets. This desire to respond to or please management has a tendency to render forecasts possibly slightly more optimistic than what they might normally be, so that management can smile. But what do you do when the forecast obviously does not meet the desired levels?

You insert what is called a plug into the forecast.

You find a way to provide the management desired levels in the forecast numbers. You forecast the performance that is defined, and then you add in an amount equal to the difference between the goal and the defined forecast, which is undefined. This undefined amount is known as the “plug”.

You are in effect using the verb definition of the word “plug” as a noun. You are essentially filling a hole (a verb) in the forecast with a plug (a thing). It is normally the noun function that is turned into a verb, but here we have the verb function that is turned into a noun.

I guess it is a little thing (a very little thing) but it amuses me, so I have included it.

I have also noted in the past that if a forecast is knowingly presented to management, and it does not at least meet the desired targets, that whoever submits such a lacking forecast could be subject to a significant amount of incremental management attention and assistance. As I also noted this attention and assistance will usually continue until the forecast realigns with the desired targets.

The quicker the plug is inserted into the forecast; the faster management can feel better about the forecast.

I think this may somehow be related to the genesis of the saying “The beatings will continue until morale improves.” This quote is attributed to Captain Bligh, or the HMS Bounty, when told of the forecast associated with how the crew felt about reaching Pitcairn’s Island. It is also apparently quite applicable to a multitude of other management groups.

Plugs were developed in forecasts as a way to create a real and accurate forecast (that potentially does not meet management expectations), yet also provide an acknowledgement of the expectations of management in order to avoid the incremental assistance of management. Plugs are the as yet unidentified portion of a forecast, that will (hopefully) be defined in the future, and will result in the meeting of the desired targets.

This results in the equation:

Actual Forecast + Unidentified Forecast (Plug) = Presented Forecast

Plugs are an acknowledgement that the actual forecast doesn’t meet the desired levels, but the miss to forecast has been identified and is being worked, so that extra management reviews of the forecast (or beatings, as the case may be) are not going to be necessary.

On the surface, this type of forecasting technique sounds great. The actual forecast can be presented to management, as well as the desired number that management wants to see. They get both reality and what they want.

However, if you are going to use the Plug Gambit in a forecast, you need to understand that it is a double-edged sword, and it has a limited shelf life. It is a double-edged sword in that a forecast is being presented to management that is in essence telling them that their desired number is going to be achieved. If it is not, then there will be significant, and now merited management attention visited upon those that delivered such a faulty forecast.

The plug in a forecast also has a limited shelf life in that it is expected to reduce as time passes, and the measurement period draws to a close. An example is that a plug in a forecast during the first month of a three-month quarter might be acceptable. However, the same plug in the third month of a quarter should definitely garner incremental management attention.

So, there you have it. A plug is an artifice, inserted into a forecast in order to avoid (at least temporarily) unwanted incremental management attention associated with the forecast. It is an identified amount, but from an unidentified source. It can be sales to unidentified customers, or cost reduction from unidentified actions.

Once a plug has been inserted into a forecast, it is almost impossible to improve the level of the forecast. This is because as new opportunities are identified, they reduce the amount of the plug, as opposed to actually improving the forecast.

With this in mind, it is my understanding that the latest management approach to limiting the use of plugs in forecast is to in fact request and drive for improvements to any forecast that does contain a plug. This has the effect of requiring double the desired growth as the plug must first be filled before the forecast can be increased. This move by management will no doubt engender some as yet unknown, new methodology for forecasting, as the ongoing escalation associated with business forecasting continues.

This is very similar to the idea that the fastest cheetahs only caught the slowest gazelles. This natural selection meant that only the fastest gazelles (and cheetahs) survived. The ongoing evolutionary race is forecasted to continue going forward on the African Savannah.

However, I think it is pretty obvious that in this example, gazelles do not get to insert plugs into their speed forecast.

The Process – Simplicity Paradox

The known world is full of paradoxes. Paradoxi? Whatever. Having studied Physics in school I am somewhat familiar with a couple of scientific paradoxes that changed the way we look at everything. Prior to these changes the world was viewed through the lens of what was called Newtonian Physics. That is the mechanics of the motion of objects of non-zero size. Beach balls bouncing, planets orbiting, that sort of thing. It worked well until technology progressed to the point where people could examine smaller and smaller objects, like “particles”, electrons, and protons and such. Then it didn’t work anymore.

It was at this point in time that a new branch of Physics had to be created. It had to work for the macro-world of bouncing balls and the micro-world of sub-atomic nuclear particles. It was called “Quantum Mechanics”. It had to address the paradoxes that were now visible.

It had to address the paradox that sometimes light behaved as a wave and sometimes it behaved as a particle, when in reality it had to be both a particle and a wave all the time. If that was truly the case then everything had to exhibit the same characteristics of waves and particles. This is called the wave-particle duality.

There were other paradoxes that Quantum Mechanics had to address. The idea that physical quantities such as speed and energy (and others) changed in only discreet amounts, sort of like going up and down steps as opposed to the idea of smooth slopes like slides. It also had to explain why the very act of observing these things changed their behavior and made observing other aspects of the same objects that much more difficult.

So, as usually the question now is: What does this introduction have to do with anything associated with business. I think it is pretty simple. I think we have been working in a business management model that for analogy’s sake is the seventeenth century equivalent of Newtonian Physics. It has worked, or not worked as the case may be, on a somewhat macro-scale, but as we have tried to drive it further down on a micro-scale into the organization, it seems to no longer provide the solutions and value businesses need.

As we have introduced more process into the business system in order to try and drive more and more order into the system, I think we are starting to see a breakdown in the results we are expecting to see. Instead of getting better we have gotten slower. We don’t get the results that we expect. So what have we done? We have attempted to introduce still more and more process on a smaller and smaller level in order to achieve the predictability and order that we desire in our business universe.

I think we may have reached the same metaphorical boundary in business that Newtonian Mechanics Physicists had to cross in order to get to the new Quantum Mechanics model of the world.

As we layer in more and more process in order to try and simplify, streamline and make our business universe more predictable, we are also adding in more complexity to the business system through the application of the process itself. Herein lies the paradox: The very act of adding incremental process in order to simplify the business adds complexity to the business. We may actually end up simplifying the business a little, but it takes more effort in the process than we save in the business.

This incremental process complexity manifests itself in the time it takes to accomplish simple tasks. It can be seen in the number of conference calls that are now required before any actions can be taken. It can be seen in the increased desire for consensus instead of action. All of these complexity symptoms can be seen as the result of trying to drive the increased application of complex process into the business structures.

Extending the Quantum, Mechanical and Measurement metaphors a little farther into business could also give us some of the solutions to the paradoxes that business is now facing. If the very act of trying to simplify adds complexity, and if the very act of measuring modifies the behavior of how the business behaves, what do we need to change?

I think one of the first things we need to do is change what we measure. As we have seen in the quantum mechanical world, the more specifically we try to measure something the more we modify some of the targets other characteristics or attributes. This is actually called the “Uncertainty Principle” (It was actually introduced in the early part of the last century by the German Physicist Werner Heisenberg, and is also known as the Heisenberg Uncertainty Principle).

The same behavior is noted in organizations and is defined by the phrase “Expect what you inspect”. This generally means that by merely measuring something in an organization, whether it has value to the organization or not, you can change the behavior of the organization with respect to what you are measuring. If you measure the wrong things you should expect the wrong behaviors.

So perhaps we should reassess the value of ever more specific metrics and measurements. This thought seems to run almost entirely counter-intuitive to the directions that many organizations are going today. Instead of looking for ever finer and more specific things to measure we may want to take a step back and focus on the organization as a whole.

There are many metrics that the market looks at when it puts a value on the whole of a company, but the primary ones are financial: Orders, Sales, Profit, Earnings and Cash Flow. There may be others, but these should work for this argument’s sake. It is through the application of these metrics that the market usually establishes a value for the business. We might want to add Customer Satisfaction into the business metric mix, but I actually think that metric will sort itself out through the other financial metrics. If you don’t have Customer Satisfaction, or Quality or any of those derivative topics, you eventually won’t have the financials either as your customers will leave and take their business elsewhere.

So the simple baseline metric for every process, project, strategy, product or program should be: Is there a Financial Business Case that improves one of the five financial metrics that justifies the activity? By forcing the creation of that business case you have created the business representation in numbers and also the accompanying metrics for measuring the activity’s success. You can then see if the activity actually generated the beneficial behavior for the business that was targeted. If the value of the proposed activity cannot be defined, then there is a pretty good chance that the activity probably doesn’t need to be given a high priority.

Measurements against any other type of criteria will yield nothing more than some sort of a track against a non-critical objective, and will most probably drive a behavior that is not in alignment with the objectives of the business.

The Process versus simplicity paradox may be a little more difficult to counter, but again I think we can get it down to a business case. I think the idea for all those that would like to create, add to or extend a process is again to ask them to quantify what they are trying to correct or improve, and what resource they expect to expend on the improvement. In other words we need to create a Process – Simplification equation:

Man Hours required to implement the process
Less
Man Hours saved / removed from the business because of the process
Equal
Net Business Simplification.

The nice thing about physics is that it can be clearly expressed in terms of numbers. Postulates and theories can be readily proved or disproved via experimentation or observation. I think we need to look at returning business to this sort of practice as well. There is the proposed theory to reduce and align the metrics with the financial value metrics in the business so that all members of the organization are clearly working towards the same goals. This will make sure that the behaviors on the macro-organizational level are fully aligned to the individual or quantum level within the organization.

I believe and agree that some process is required for the proper running of an organization. The question is when do we start experiencing the law of decreasing returns when it comes to adding more process? By requiring at least a business case proposal and defense of the quantified value of each incremental process I think business can begin to regain the focus on the value that each process is supposed to deliver and start to move away from the current approach that appears to be more process as the solution to every issue.

Business like Physics is a numbers oriented discipline. Good processes in business are like good theorems in physics. People may like to believe in them, but they need to be proven out in the numbers and measurements before they become accepted as natural laws.

Cartoons and Strategy

My son was being abnormally quiet the other day. Actually he was being quiet with periodic outbursts of laughter. This is not the normal state of affairs. For those of you with teenage boys you also probably know this to be the case. There is normally an ongoing chatter followed by screams of either anguish or happiness depending on who was most recently vanquished in the current on-line military game being played. I won’t mention which one. They all seem the same to me. We have all seen the commercials on television.

It was so odd to hear him in this mode that I did the unthinkable. I went upstairs to the game room to check on him. He wasn’t wearing his gaming headset. He wasn’t even on the internet. He was watching the Roadrunner and Coyote (more specifically Wile E. Coyote for those fellow purists like me) cartoons. I remembered watching these cartoons when I was young. It was amazing to me that they were still on. He had stumbled across them on a network that only played old cartoons; surprisingly enough called the “Classic Cartoon Network”.

Being of sound mind and body, a guy, and having cartoons on the television, I did the only logical thing. I went in, sat down and watched old cartoons with my son. Some of them I remembered and some I didn’t. It was fun to hang out with my son, but as usual, it got me to thinking. The humorous aspect of the Roadrunner and Coyote cartoons was based on the simplicity of the task at hand; catching the Roadrunner, and the ever more complex slate of strategies employed by the Coyote in his attempts to complete the task.

Leave it to me to compare perfectly good classic cartoons to business. It’s an insult to the cartoons.

Sometimes his failures came from obvious, predictable and expected issues. Sometimes they came from unexpected directions. They were all entertaining. The Coyote’s single mindedness regarding catching the Roadrunner always made me smile.

I always wondered, if he could actually buy, build and fly his own ACME rocket, why didn’t he just use that same intelligence to order take-out from his favorite restaurant, or switch to chicken, which might have been an admirable substitute for Roadrunner and bought some at the grocery store? It probably would have saved him a great deal of wear and tear from all the falling off of cliffs and having large rocks fall on him.

Undaunted by each successive failure, the Coyote would generate a new strategy to capture the Roadrunner. Each new strategy would invariably contain maps and charts and plans on what to do and where to do it. Each new strategy was usually also more complex and more intricate than the last, but was guaranteed to work this time. They never did.

What Wile E. Coyote Inc. teaches us about strategy is something we all probably recognize but occasionally need to be reminded of: Simpler is better. This obviously applies to other business strategy as well.

A good strategy has only a few major attributes. I’ll try and go through at least my opinion of them, just as a refresher course.

First: The goal must be achievable.

On the surface one would think that catching a Roadrunner should be an attainable goal. It probably was, but it was how the Coyote went about it that was entertaining.

As a corollary it’s also okay to want to double or triple in size as a business. It may also on the surface appear to be an attainable goal but the question that should always be asked is: What is going to fundamentally change in the business that is going to enable, or even drive this kind of growth? Everybody else in the market wants to grow too, and they also have strategies. You need to have a very solid and strong precept that makes you different.

Second: The strategy must be simple.

Rube Goldberg is a name that is synonymous with creating very complex machines to achieve very simple goals. He also appears to have been the chief strategist for Coyote Inc. in its desire to overtake Roadrunner Inc. There is even an annual competition in his name where a simple task must be accomplished in no less than twenty different steps. The 2015 objective was to “shine a shoe”, and due to the complexity of some of the past entries (with over two hundred steps) the contest has been limited to a maximum of seventy five steps.

In business the goal should be to shine the shoe. Find the shoe, apply the polish and buff till the desired luster is achieved. That’s it. As the Coyote taught us, the more complex the strategy, the greater the chance there was for something to go wrong.

Third: No strategy survives contact with the real world intact.

This is a paraphrasing of the original quote:
“…no plan of operations extends with any certainty beyond the first contact with the main hostile force.”
Field Marshall Helmuth Karl Bernhard Graf von Moltke (The Elder)

Now for those of you who are not up on your nineteenth century Prussian military history, Moltke was the Prussian military commander during the middle part of the century, and he wrote this in his book “On Strategy” in 1871.

Again we look to Coyote Inc. for examples of what not to do here. He would usually achieve one of the attributes he was striving for in his quest to get the Roadrunner. With the help of his trusty ACME rocket he could achieve the speed of the Roadrunner. He would close in only to see the Roadrunner demonstrate his ability to stop before running off a cliff, or turn sharply before running into a cliff. The Coyote with his ACME rocket usually would not be able to match this agility and maneuverability, with the (now) expected results.

The very act of implementing his strategy caused a change in the behavior of his target. Coyote Inc. was able to go as fast as Roadrunner Inc., so Roadrunner Inc. learned to stop or turn quickly in order to elude its pursuer. The same goes in business. Things change. The competition will react to competitive behavioral changes. Customers will do the same. You had better be able to learn how to change direction quickly.

The idea is to be ready for it. The simpler the strategy means there are fewer moving parts in it. The fewer the moving parts means the fewer number of things that can go wrong, which in turn means the fewer the number of things that will need to be modified as conditions in the market change. This is especially useful when it comes time to change direction because a cliff suddenly appears in front of you.

Keeping goals attainable, strategies and the number of contributing components simple, and preparing change direction as the conditions warrant seems to be enough for any business. It is the complexity that is introduced into the plan that is usually the cause of issues. When it comes to strategy and its components, I am a firm believer in the adage that “Less is more”.

It was an enjoyable time with my son watching old cartoons. It didn’t last nearly long enough. It seemed in no time he had his headset back on and was busy wiping out whichever opponent was on line at the time. I on the other hand was ready to impart all of these strategy and strategic insights that I had drawn from the Coyote’s obviously poor performance to him. He didn’t seem very interested.

I really didn’t expect him too, but still it was mildly disappointing after sharing a solid thirty minutes of quality time as we did. Still the cartoons stuck in my mind and the basic tenets about strategy were there. I suppose if Wile E. Coyote Inc. had actually employed the simple and straightforward strategies it should have in its quest to overtake Roadrunner Inc. the cartoons would have been much shorter, and probably not nearly as funny.

And I probably wouldn’t have gotten to spend some extra time with my son.

The Optimal Meeting Length

I think that the new business reality is that it is the rare event when something actually gets done without first having a meeting. We need to know who will be Responsible for the action to be taken, and who will be Accountable for taking it, and who will need to be Consulted before it is taken and who will be Informed of its being taken. We will spend hours in meetings in this type of analysis before we actually do anything. We seem to have evolved the business approach that having a meeting about something is the same thing as taking action.

With all this time being spent in meetings trying to decide how to split the accountability and responsibility for doing anything, it got me to thinking: What would be the optimal length for a meeting, not just one of these deciding how to take action meetings, but any meeting?

I looked. There is any number of books available on line purporting to help people run efficient and effective meetings. I was in a meeting when I Googled that so I really didn’t have the time to read any of them. Who knows some of them might actually hold the key. But since we are in the here and now I will take my kick at the can (and utilize some of my own web sleuthing) to come up with what I think is the optimal length for any meeting.

There will be a few meeting ground rules.

• For it to officially be considered a meeting it must be visual in nature. That means that you either have to be there in person, or attend via video. Audio attendance at a meeting only is a phone call / conversation regardless of how you want to describe it, and it enables everyone associated with the call to multi-task doing email, play solitaire, or any other distraction they may so choose.

• If it is a real meeting it will have an agenda. If you don’t have set topics, speakers and time frames it is not a meeting. It is an unstructured discussion, or lunch. Without an agenda you should not expect to get anything done.

• The only computer that is to be open during the meeting is that of the person presenting. Open computers enable everyone to multi-task (see the first bullet above) instead of paying attention to the topic of the meeting. It’s also discourteous to the presenter.

• There should be no refreshments of any kind at the meeting. No bagels or muffins for a morning meeting. No coffee or soft drinks. The object of the meeting participants should be to get something done, not get fed and watered. If you really have to bribe people with food to get them to come to your meeting, maybe you don’t really need to have a meeting.

• Finally, there will be no leaving the meeting and coming back for any reason. No taking phone calls. No smoking breaks. And lastly, no bathroom breaks. Get that done before or after the meeting. Don’t disrupt it by having to go.

I understand that these rules will take a lot of the fun out of meetings. People will actually have to show up and pay attention. I know this is a lot to ask, but I do think it is critical that we get back to the old outdated ways of actually getting things done. Show up. Do your work. Then go do something else.

Now when we are talking about meetings, we are talking about the internal gathering of company employees. They can be called reviews, or updates, or deep dives or just about any other euphemism that you can come up with for having people get together for a business purpose. I will refer generically to all these events as “meetings”.

I am also going to specifically exclude meetings with customers from this discussion for the time being, since those types of meetings are held only with the consent of the customer and at their discretion. Many of the ground rules I have laid out would and should apply, but some (such as food and refreshments) may not.

With the ground rules in place and the meeting defined as not including customers we can get started on how long a meeting should take, or should last, depending on how you want to look at it.

Research (Google) shows that the average person goes to the bathroom about six times a day. That same research also shows that the average person stays awake about seventeen hours a day. Using simple math that means that the average person goes to the bathroom on average once every three hours or so (actually a little less than that). I think this is a good upper bound for a meeting’s length.

Now if we use a little probability theory, because not everyone goes to the bathroom at the same time, we will find that on average for any meeting of two or more people someone will have to go within half the average time frame. That means that our maximum meeting length is now slightly less than an hour and a half.

Even better.

Now on to other research (Google) topics. Estimates for the length of human attention span are highly variable and depend on the precise definition of attention being used.

• Transient attention is a short-term response to a stimulus that temporarily attracts/distracts attention. Researchers disagree on the exact amount of human transient attention span; some say it may be as short as 8 seconds.

I think it is safe to assume that senior management is more Transient Attention oriented.

• Selective sustained attention, also known as focused attention, is the level of attention that produces the consistent results on a task over time. Some state that the average human attention span is approximately 5 minutes; others state that most healthy teenagers and adults are unable to sustain attention on one thing for more than about 20 minutes at a time, although they can choose repeatedly to re-focus on the same thing. This ability to renew attention permits people to “pay attention” to things that last for more than a few minutes, such as long movies.

Attention span, as measured by sustained attention, or the time spent continuously on task, varies with age. Older children are capable of longer periods of attention than younger children.

It doesn’t say anything about executives or managers. Insert your own experience based limit here, however my experience has taught me that they tend to align with younger children.

I have been writing this for an hour or two and I think I need to take a break. I’ll be right back….

Okay, if we accept that people can pay attention to a single topic for up to twenty minutes, but that they can continue to “refocus” on interesting topics in order to stay engaged for longer periods of time, the question now becomes; how many times can they refocus? This is where true science comes into play.

In baseball its three strikes and you’re out.

Asking people to maintain their attention, and refocus multiple times while limiting the number of bathroom breaks is a lot to ask. Asking people to refocus their attention three times for a total of sixty minutes seems to be about the limit of reasonable expectation.

There you have it. A scientific explanation. No meeting should be more than one hour long. If you can’t get it done in an hour then you probably need to re-look at what it is that you are trying to accomplish in the meeting.

I think we all knew this is where I was going with this topic. We seem to have broken our lives down into hour intervals starting with our classes in school. If you can teach Einstein’s Theory of Relativity to twenty five disinterested teenagers within a one hour class, you should be able to have far less than twenty five adult business people come to conclusion on just about any topic within the same interval.

By the way, time does indeed slow down, the closer you get to the speed of light.

This interval sits comfortably within the average need for a bathroom break, and it is short enough that it doesn’t require too many refocusing events. It is the optimal length for a meeting where the objective is to actually get something done. It enables the meeting attendees to get in, get out and move on to the next topic. By limiting the time one would expect (hope) to drive the attendees to come to a conclusion within that time.

If there are more topics to be covered they need to be broken down into other multiple one hour meetings.

Of course, none of this one hour meeting logic applies to how long a luncheon meeting should last.

Complexity and Incompetence

Thank goodness for Spell Checker. I wasn’t paying full attention to what I was doing here when I started writing and initially misspelled “incompetence”. Talk about the potential for poetic justice on an article title like that.

 I have to give attribution for this topic to one of my friends in Austria. He was talking the other day and one of the things he said really resonated with me. So many times it seems that we like to think of our work as complex. Part of this business complexity definition desire may be based in how we may want to equate our self worth with the accomplishing of the difficult or complex, and part of it may be related to the positioning of an explanation if the goal is not attained. Either way, in reality we need to accept and address the fact that business is really not that complex.

 So much of business is built on the basics. Set a goal and then follow through. Create something of value for your customers. Say what you will do and then do what you have said. Treat the business’s money as if it were your own. Tell the truth. Ask questions. Read. Learn from your mistakes. The list can go on, but the components of the list are all equally simple and axiomatic.

 Those last few on the above list were proudly stolen from a wall chart that I saw regarding the basic rules for conduct in a kindergarten classroom – really. There were many others on the list that I thought were equally good an applicable (don’t hit, don’t hit back, etc.), but I didn’t want to go overboard here.

 I think you get my point. Many of the precepts that we have learned regarding basic human interaction (dating all the way back to kindergarten) form the foundation for conducting business. I have noted in the past that at its most basic business is about the interactions between people. Business is not done organization to organization. It is done person to person. It’s really not that hard. This brings me back to what my friend said. He said (and although I am quoting, I am also paraphrasing):

 “Claiming “complexity” as a reason for a business issue or performance is either the defining of a basic level of incompetence or the providing of an excuse for non-performance”

 I think he put it very well.

 The only piece that I might add would be to address our innate desire to make what we do seem important. On a base level it is difficult to equate doing something that is simple with doing something that is complex. We all want to succeed at the difficult or complex because we feel it has more value than succeeding at the simple. However in business, as with almost everything else, it is not the case.

 More specifically it is the ability to do something simple, and not to just do it (as the famous footwear commercial says) but the ability to do it very well, that makes it important. It seems all too often we juxtapose the goal of just getting something done with the goal of getting something done well, and then claim that the complexity was the cause for the performance difference.

 Complexity can neither be a reason nor an excuse for business performance. At the levels which business leaders must operate, there really can’t be that much room for complexity. Financially speaking, business leaders are not being asked to understand differential equations or Fourier analysis techniques. It is the simple concepts of Profit and Loss that we need to know. Are customers satisfied or not, and why? Are commitments met? It is the simple that needs to be our focus.

 It is interesting (at least to me) that I have had cause to cite Albert Einstein on several occasions in the past. Einstein is primarily associated with the development in physics of the theory of relativity, and other higher contributions to scientific thought. I seem to find myself applying him regularly to business as well. Maybe that is the definition of a truly smart person (Einstein, not me); they can be applied equally well to multiple fields.

 Einstein said (and this is a direct quote):

 “If you can’t explain it simply, you don’t understand it well enough.”

 Remember, Einstein reduced the entire theory of relativity to a single, simple equation:   E = Mc²

 The inference here is that if the theory of relativity can be expressed so simply, there should not be much in business that should either be considered or expressed to be complex.

 Perhaps that is where the complexity issue lies in business. Business currently seems to embrace and value complexity. It seems that some people in business either can’t or won’t expend the effort required to understand issues well enough to make them simple. Linking this back to my friend it would appear that those who can’t get a good enough understanding of the topic are incompetent, and those that won’t get a good enough understanding of the topic are looking to use it as an excuse for their non-performance.

 I think the issue is becoming more and more pervasive in business as we have created entirely new sets of business vernacular to assist in complex explanations of simple topics and issues. For example, now instead of having a “strength”, we now have a “core competency”. The definition of competency (according to Websters) is adequacy. Instead of being strong we are now merely adequate? If it is not core, it must be peripheral. Is there even such a thing in business as “peripheral competencies”, and if so, why would you even have them?

 I have digressed, but only in such a manner as to illustrate that we need to understand and accept that the only complexity that leaders have in business is the complexity that they themselves create, accept and impute to the business.

 This sounds somewhat trite even to my own ear as I think it over. And I am sure that there will be many who will think that this is an over simplification of many of the issues facing businesses today. I am also sure that there can be several seemingly complex examples of issues that they will proudly point to and describe as too complex for simple descriptions and solutions.

 But I think I am going to leave the challenge out there anyway.

 I’ll would look to Einstein (since he seems to be generally recognized as a pretty smart role model) and respond by saying that if they can’t describe the problem in more simple terms then they probably don’t understand it well enough yet. I think my friend was on to something in that if people say that they can’t understand it well enough to make the complex problem simpler then it may be time to question their competency to do the work. If they won’t understand it well enough to make it simple, then it actually does sound like they are making excuses for their non-performance of the desired tasks, which would also entail a leadership intervention and action.

 Complexity is something we choose to have in business. We seem to have built up almost a myth around it when it comes to business. We have created new words and methods to make the simple sound, look and even be more complex, and I think business is suffering for it. If we started to look at complexity as a lack of understanding of the issue, an excuse, or even incompetence, I think that we would see things become much simpler, very quickly.

Charts


Sometimes it’s the little things that set me off. I have mentioned many times that I am so old school business that at this point I am probably an anachronism. I believe in clarity. I believe in definition. I believe in simplicity. In today’s world of ever increasing complexity and confusion the ability to bring clarity and focus to an issue is the sign of a leader. This is business. We are not trying to understand the tabulated data associated with the new types of matter that have recently been observed at the Large Hadron Collider, nor are we supposed to be analyzing Mendlebrot patterns and images associated with understanding chaos theory as it applies to structures found in nature. Unfortunately it seems we are drifting in this direction when it comes to reviewing our business performance.

Periodically good businesses review how they are doing with various sales, financial and operational reviews. The standard form of communicating information in the business world in these types of reviews is the PowerPoint chart. PowerPoint charts are an excellent medium for communicating information and images. Images are more quickly comprehended and better retained than written verbiage by the viewer. Since we usually have only a limited time for these reviews, we tend to use PowerPoint charts as the medium for review in them.

Excel spreadsheets are good also. Since we use numbers in our measurements and metrics they fit well in the spreadsheet format where they can more easily be manipulated. So what do we do? We embed Excel spreadsheets in our PowerPoint Charts. We also need a few bullet points on the chart to explain certain items and draw attention to specific points that we want to make. We must now make the Spreadsheet smaller to accommodate the added information of the bullet points, which must all be contained on the chart.

Because the spreadsheet is tabulated data and we know that management does not want to have to read the tabulated data we do two additional things to the chart. We color code the cells on the spreadsheet so that management can just look at the color Red, Yellow, Green, and understand if it is a good number or a bad number, sometimes without having to actually understand the number or what it means. We also add at least one pie chart or candle chart to the slide to graphically represent the now color coded numbers on the spreadsheet that have been explained by the bullets on the slide, since we know that images are better understood and retained.

We can now move on to the second slide in the deck.

And so the chart deck grows. There are now charts on topics that are required to be covered by management, charts explaining the charts that are required to be covered, topics that are not required but are being covered because the presenter wants to cover them, charts explaining these charts, and then there are the “backup” charts that are there just in case there is a question that can be easily covered by one of these charts.

Team members are invariably only allocated about half the time they would require to present the number of charts that have been created for the purpose of the review. Instead of removing charts, and summarizing some of the information from the deck, what normally happens is that charts are consolidated. Two charts, or in some instances as many as four charts are reduced in size and put on a single chart. The number of charts in the deck has successfully been reduced. The amount of information in the deck has been retained. There is now no possibility that the team member will be able to present the reduced number of charts within the allotted time. The probability of audience comprehension has also been reduced due to the quantity and complexity of the charts.

Now reviews take too long because of the amount and complexity of the information that is trying to be captured in each single chart. The value of the review is diminished because the comprehension level of the review audience has been reduced due to the complicated formats and quantity of information on each chart. A communication format that is designed to communicate simple images and information that can be quickly understood and processed has been turned into a multimedia structure that has lost much of its value due to the complexity that has been added.

PowerPoint charts are supposed to be simple. By necessity that means that they need to be communicating summary information. PowerPoint charts are a structure well suited for providing a few specific details, not all of the details. They are designed to help communicate through the use of images, a few simple images. If there are too many images on a chart, none of them get well retained by the viewer and they will all lose their value.

Normal writing as it appears on the printed page is usually ten to twelve point font. This is too small for a chart. You are not writing a document, you are creating a chart. If you find you have to reduce the font on your chart to this level to accommodate all the information you want to provide on the chart there is a problem. Either reduce the amount and detail of the content, or put it on a separate chart so people can read it more easily. I have been told a good rule of thumb is no more than five to six bullet points of eight to ten words maximum. Any more than that and you are getting too verbose for PowerPoint.

Finally, if you cannot present your topic in approximately twenty charts, with twenty five as a maximum, you have a problem. You are either wanting or trying to present way too much information. It is a review. I have seen multi-billion dollar business units presented concisely in twenty charts. It can be done. You need to know and understand the detail of what you are reviewing. The audience does not. They want a summary of what you know. If there are questions, or more detail is desired, they will ask.

We need to simplify our charts. It will help simplify our messages. Simple messages help us focus on the issues. When we focus on the issues we have a tendency to solve them. While complex slides may initially look impressive, more complexity is usually not the answer to any question.