August 1, 2019 ASSA ABLOY implemented a 3% surcharge for door industry products imported from China as a result of new tariffs enacted by the U.S. government. Regardless of your political leaning, or your economic philosophy, something not debatable is the fact that business keeps getting more and more complex. Case in point, tariffs and surcharges increase the complexity of pricing your products and projects.
BTW, to reduce your complexity of handling this 3% surcharge, please review our step by step instructions on inputting price surcharges, https://softwareforhardware.net/surcharge.pdf.
In general, I try to find the silver lining in most situations, and one does exist relative to this issue of business complexity. The silver lining being an opportunity to leverage complexity into simplicity and a competitive advantage for you.
Let’s define complexity first. Complexity the outside world throws at you, like tariff surcharges on door, frame and hardware products, is called “imposed complexity.” You can’t reduce imposed complexity. But, you can control “internal complexity” that exists within your business. By creating more simplified and streamlined internal processes and organizational structures, you can reduce complexity and be more nimble and customer responsive.
Here’s a real-life example that happened here at SFH just last week. A customer called us with a question really better answered by a manufacturer. However, the distributor said he chose to call us because he knew we’d respond more quickly. We certainly were not the most expert on this particular topic, but because we run an organization with simplified processes and less complexity we can respond more quickly than the large slow moving manufacturer. Hence, we’ve gained a competitive advantage, at least in the eyes of this customer.
So how do you reduce complexity and gain a competitive advantage? Start by making everyone in your company a C-Officer, ie. a Complexity Officer, charged with finding and reducing complexity. While it may sound silly, it does send a message which you can strongly reinforce by creating a reward system. Give employees bonuses, gift certificates, etc. when they spot areas of needless complexity and reward staff that develop new ideas to streamline and simplify your business. Hey, it’s the old Suggestion Box with a new fangled name!
A group exercise known as process mapping can also be a great way to reveal opportunities to reduce complexity. Start with a regular business task that involves many people and many steps. It might involve every member of your company. Use colored Post-Its for each employee to document every step they participate in during the project process. As people place their Post-Its on the wall to map the process it quickly becomes visible the areas of duplication, redundancy, and inefficiency. If you’d like some guidance to conduct this exercise, please contact me; I’ve conducted this process with companies small to Fortune 500.
As a software company we certainly believe that technology can create new ways to save time and simplify. Think of the hours you once spent in line at the bank when today you can deposit a check within seconds via your phone. Take a few minutes each month and read up on latest office tech. You’ll be amazed at the myriad of inexpensive new ways to leverage office tech to streamline processes and reduce complexity.
Richard Branson, billionaire entrepreneur, best summed it up when he said, “Complexity is your enemy.” Now if we could just get our governments to believe similarly!
Ian Oxman, Co-Owner, Software for Hardware LLC, is based in Atlanta, GA. Ian leads product development, marketing, and strategy. You can reach Ian at email@example.com.