Getting back to basics in the new year

Simple is easy to say, hard to do, but gets profitable results. What can you simplify today?

Most often in business we focus on what we can do more of. What features can we add to our product? What new product line can we add? What new customer segment can we go after? What new hires should we add?

But the trouble with ‘more’ is that it adds complexity and complexity adds inefficiency. Doing “more” often leads to a decrease in profitability, quite the opposite of what was intended.

I’ve seen plenty of examples where more features on a product have made it more costly to produce but haven’t enabled increased pricing. I’ve seen businesses suffocated by trying to manage more and more product lines.

Just the other week I spoke with a business that had decided to ditch its rather disastrous foray into a new customer segment – they eventually realised they simply didn’t have the mental capacity to service the old and new segments to the best of their ability. And I’ve lost count of the number of businesses who have hired aggressively, only to scale down the team quite dramatically after the implications of running a big ship have hit home.

With this as a backdrop I think it’s interesting to think about the question, “What can I simplify?”

Taking this approach you may think about culling the number of ‘priorities’ you have in the business and focusing on just one or two at a time. It might also be useful to take the time to remind both yourself and your team about what is truly essential – in terms of both individual products and the business as a whole. It’s amazing how easily we diverge away from it.

A very visual way of measuring your progress towards simplicity is to keep a “No log”. On the “No log”, you record the things that you have stopped doing together with the stuff that you contemplated but declined to pursue. Businesses that keep a “No log” get better and better at focussing on the important stuff and keeping it simple because they can see the outcomes of their actions.

To get into the swing of simplicity, what one thing can you stop doing this week? Ask your employees the same question, and don’t be surprised if you get at least one remarkable observation.

This article was first published in January 2011.

Julia Bickerstaff’s expertise is in helping businesses grow profitably. She runs two businesses: Butterfly Coaching, a small advisory firm with a unique approach to assisting SMEs with profitable growth; and The Business Bakery, which helps kitchen table tycoons build their best businesses.