Curb Complexity as Your Organization Grows

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March 6, 2017 | Yuval Dvir | HCI

An owner’s mentality, a frontline obsession, and an insurgency mindset that can curb complexity as an organization grows is of top importance, according to Chris Zook and James Allen’s article on the founder’s mentality, as published in the Harvard Business Review.

“Growth creates complexity, and complexity is the silent killer of growth,” Zook and Allen found.

I always saw complexity as my nemesis throughout my career. Whether in product, strategy, or operations, complexity always found a way to creep in and undermine strategies we put in place. This was partially the reason that while at Skype, I moved from a product strategy role to a business transformation leader. Our devised strategy just didn't matter unless we could breach through the high wall of complexity the organization had built over the years.

Since inception in 2003, Skype has moved ownerships several times while continuing to grow. With eBay, Silver Lake, Andreessen Horowitz and others having a go at Skype, you can imagine how inconsistent the management of the company was and how the ‘boring’ internal operations were pushed down the list of priorities.

Just as Skype started untangling the mountain of complexity from years of neglect, things got even more difficult. The long anticipated Microsoft acquisition came into effect, doubling our mandate by absorbing 1,000 Lync employees to the division. Our own redesigned data infrastructure had to be reworked as we moved from a third party solution to a cloud-based Microsoft stack approach.

Not long after, Microsoft decided to functionally re-org itself after having a divisional structure for over a decade.

CEO Steve Ballmer announced his departure with no clear succession plan, which influenced the decision making of top executives and played into the risk-averse nature of the leadership team. On the flip side, with bigger news going on, we could progress our bottom-up approach faster with an insurgent, under-the-radar mentality.

The unforeseen events helped us set the stage for the future organization we were designing. It had to be agile, flexible, and adaptable when change inevitably came. We needed to become lean by removing any drag on the company, minimizing the complexity, and limiting bureaucratic overhead.

Above all, drilling down to the root cause of many of the complexities, we found that it was all about the people. As a result, the transformation adopted a cultural side in addition to the digital side.

 

Five Common Causes of Complexity

1. ‘Mommy’s favorite child’

Duplication is a great way to waste money in record time – it’s the human need for competition. But in this case, we’re competing against ourselves.

This internal competition, where non-collaborative execs are involving their entire teams to chase the boss’s pick of popularity just to demonstrate competence is how corporations waste so much of their time and money.

2. Obsolete projects, roles and teams

As companies grow and scale, ad-hoc teams are created to solve problems that accompany growth. However, as time lapses, some of these groups have become irrelevant to the changing requirements of the organization, and its people could be better utilized elsewhere.

The intuitive approach would be to close the team and re-allocate the resources. With the unspoken failure implications of closing a team, the emotional attachment to it and more pressing issue externally, organization sometimes prefer to absorb the costs of these teams to avoid confronting the ones that helped them get there.

This is a dangerous short term view as before you know it, multiple irrelevant teams add noise to the clogged system, making once-good employees sour, and create a culture of idle work with little value.

3. Leadership’s inability to live with uncertainty

Trying too hard to own the future and synthetically remove all uncertainty comes at a cost. In addition to not making anything more certain, it makes the leader add a layer of process and document overhead that not only increases complexity, but stifles any innovation or creativity from happening.

4. No belief in change

Personal discomfort with change coupled with the organization's reward for risk-averse managers leads to a lack of incentive for a shift in approach.

5. Lack of transparency

Separate and isolated systems lead to misalignment between executives, managers, and subordinates.

 

Six Solutions to Untangle Complexity

1. Perseverance of the team - the founder's mentality

Transforming an organization is a massive undertaking. The leader needs to ensure the team is up for the task. They need to be competent, resilient and eager to learn. Perseverance is about executing what’s best for the organization despite all challenges. We have been able to enlist teams and executives who were known for their dissidence.

2. Design & intuitive

If you want change to stick, the value of it needs to be clear, intuitive, and appealing to anyone whose behavior you’re after. Organic adoption that comes from realization of the value and benefit is the only way to go.

3. Sponsorship from the top and alignment

If the organization finds itself in an internal multi-rope tug-of-war, then one should ask whether it should be incorporated in the first place. For the team to challenge the status quo, the leader needs to continually support the effort by merely communicating what the team requires.

4. People reallocation

An organization is a living entity and cannot remain stagnant for too long. Inertia becomes a dangerous endeavor and steps should be taken to ensure the company continually pivots to support the best ideas, teams, and leaders, according to its strategy and the market trends. At Skype, we took more than 100 steps to consolidate the number of release vehicles or products. While growing, the company needed to be disciplined and we were the ones providing the transparency and evidence to do so.

5. A central digital ecosystem

The technology disruption of data, cloud and mobile, has introduced new business models and different behaviors of employees and customers. The company’s central nervous system brought data, metrics, tasks and strategy together from all corners of the organization to the fingerprints of the executives and the developers alike (literally fingerprints as we implemented a touch screen enabled visualization layer developed in collaboration with MSR China). The transparency this provided coupled with the minimum amount of reports and bureaucratic overhead became the lean, de-facto operating model of Skype.

6. Communication

Multiple content mediums and delivery methods were used not only to update the progress of the transformation, but also as a way to create a common language across functions. If marketing, engineering, and product departments wanted better user engagement, but used their own functional jargon to get there, alignment would be lost. Communicating metrics helped us bring functions closer while making everyone much more data-driven. At Skype, we had a team of communication specialists working full time on the transformation team to deliver internal videos, newsletters, reports, and Yammer posts.

 

The transformation team finished implementation and business was using the changes as part of its daily operations in about 18 months. This assisted Skype to reach its peak of connected, active, paid, and mobile users.

In addition, our solution became a blueprint for the data and culture transformation which had started across several parts of Microsoft, but our team had an abrupt ending as the departure of our sponsor, and the multiple re-orgs changed the structure and the mandate of the team.

The success of the change and the usage of our ecosystem still persist today, and have provided us with a working recipe to confront complexity.