October 16, 2013

The Competitive Advantage of Simplicity

Business people and policy analysts use the term, “competitive advantage” a lot. For business people, it usually means making a product or delivering a service their competitors can’t match. For policy analysts, it means creating an economic climate that spawns new businesses, keeps existing ones, or attracts those in other states.

One way to gain competitive advantage that both groups seemed to have overlooked is to practice KISS, that is “keep it simple, stupid,” not the rock group, KISS (which seems to have a pretty good business model). The competitive advantages that flow from simple and easy to use or understand products and services is a major theme running through Alan Siegel’s and Irene Etzkorn’s new book, Simple: Conquering the Crisis of Complexity.  

After describing how complexity is “costing us money, undermining government and business, and putting our health and even our lives at risk,” the authors describe why it takes hard work to simplify the things we make or communicate. “People are naturally inclined to take the easy way out—one that doesn’t involve such onerous tasks as going through multiple design cycles to make a product as simple as possible.”

Why does it take hard work? Because making things simple requires designing and making products or services with the customer’s needs and circumstances in mind. This takes empathy, which means “imagining the context in which someone will buy, read, or use the product or service you’re offering, then designing that offering to reflect those needs first and foremost.”

But the work gets harder because empathy forces makers to narrow the available options. “Successful simplifiers distill whatever they’re offering down to its essence. It’s one of the most challenging aspects of simplification, because distillation requires focus and discipline in the face of the constant temptation to add on, expand, and complicate.” But simplification is achieved only if the final product is clear and simple.

There are other things that get in simplicity’s way, including breaking old institutional habits. According to Siegel and Etzkorn,

Simplifying a company and its culture goes beyond communication challenges. It can require significant restructuring aimed toward streamlining processes, rooting out layers, and knocking down walls. One major problem is that companies are often divided into vertical silos—a structure that fosters complexity. Each division has its own rules, its own objectives, and its own turf to protect. Meanwhile, the larger, overarching goal—of, say creating the best overall experience for a customer—becomes splintered and fragmented among specialized, often competing groups within the company.