In this episode Josh spends time talking simplicity with Jesse Newton from Simplify Work. They discuss the benefits of simplifying your business and methods for doing so.
Jesse Newton is the founder and CEO of Simplify Work, a global consultancy that specializes in unburdening organizations from paralyzing complexity. His clients include Mondelez International, McDonalds Corporation, and PepsiCo.
He speaks internationally and spent a number of years consulting around the world with Ernst & Young’s People & Organizational Change practice. Jesse received his Master of Science in Learning and Organizational Change from Northwestern University.
In today’s episode you will learn:
- Why simplification is so important?
- Should you simplify everything at once or choose one project at a time?
- How Apple used simplification?
- How to do blue-collar business into the 21st century?
- How do we make it simple to use advanced software for people who don’t know anything about computers?
Narrator: Welcome to The Sustainable Business Radio Show podcast where you’ll learn not only how to create a sustainable business but you’ll also learn the secrets of creating extraordinary value within your business and your life. In The Sustainable Business, we focus on what it’s going to take for you to take your successful business and make it economically and personally successful. Your host, Josh Patrick, is going to help us through finding great thought leaders as well as providing insights he’s learned through his 40 years of owning, running, planning and thinking about what it takes to make a successful business sustainable.
Josh: Hey, how are you today? This is Josh Patrick. You are at The Sustainable Business.
We are, today, with Jesse Newton. Jesse has just written a book which I’m going to get the name of because I am a really bad person about that. It’s called Simplify Work: Crushing Complexity to Liberate Innovation, Productivity, and Engagement. We are going to talk about why you need to simplify and stop doing things that are complicated. Let’s bring Jesse on.
Hey, Jesse. How are you today?
Jesse: Good. Thank you. Thanks for having me.
Josh: My pleasure. Jesse, tell me about simplification and why it’s so important.
What I wanted to do with the book was to shine a big spotlight on how many organizations have become unnecessarily and overly complicated. I’m a consultant and I have worked with over a hundred companies around the world. Pretty much, all of them have battled with complexity and unnecessarily complicated processes, structures, and layers of working.
It’s painful to go into an organization and see people coming into work and being lost by the various reports they have to complete for their 10 different managers or trying to figure out who’s responsible for what in a global matrix. Inevitably, these individuals become reactive and they get stuck in these cycles where they’re sort of going through the motion.
I think there’s a massive opportunity to take a big step back and re-think how work is managed, to get really crystal clear on those things that truly matter, and to set people free to really think and innovate and do their best work in an environment that really fosters that. I’ve written the book and have picked apart how complexity comes to life in an organization and how to go about simplifying work.
Josh: Okay. Here’s the thing I learned. I used to own a food service and vending company. We had 90 employees and tons of people doing all sorts of stuff. What I found, over the years, was the less choice I gave them, the happier my average employee was. There’s also a corollary that goes along with that, the more I simplified the decisions they had to make, the happier they were.
I hear lots of people say, “Oh, I want to set my employees free.” My experience is, most employees don’t want to be set free. They want to know what it is they have to do specifically for success. What would you say to an owner of a company that comes to you with that sort of statement?
Jesse: Well, I think there has to be very clear parameters set. The first one is, you’ve got to get really clear on strategy and what’s really most important. I think that has to be clear. Often, it becomes pretty foggy as a company grows. They go into more service lines, or they introduce more products, or they may enter new markets. And all of a sudden, the pull from the people is stretched. And then, across those different services, and products, and markets, there are more initiatives that are put in place so that also pulls people.
I think, if it’s crystal clear – there’s clarity on the strategy, that then drives what’s most important. People can then effectively prioritize. They can say no to things that don’t really support those true strategic priorities. And then, if the person in a particular role has the information, they need to make decisions, they’re clear on those strategic priorities, then you are, essentially, freeing your lines. And you’re enabling them to make decisions – enabling them to think, problem solve, and make decisions where and when it’s appropriate.
You know, I think this, obviously, can be a problem if there are organizations that just say, “Okay, people. Go off and do whatever you want.” There’s going to be a huge issue with duplicating like different work processes, different people working on different things – just simply not running in the same direction. So, I think there has to be sort of clear parameters set. And with the right sort of structures around information, and decision rites, and their ongoing connection with the top and clarity around strategic priorities, people can and will have the ability to be more autonomous, make more decisions, and be more creative and innovate in their roles.
Josh: When you simplify, do you simplify everything at once or you choose one project at a time? How do you go about doing that?
Jesse: Well, the interesting thing is that when I looked at organizations and I wanted to assess, “Where does complexity come from?” That starts at the top. It starts with strategy. And then, structurally, within an organization, that’s a huge driver of complexity. You’ve got processes, bureaucracy lines, systems. And then the culture that breeds in a company also reinforces complexity. And so, you’ve got these different sources.
I would encourage people to start at the top, start with strategy. And then, look at how the organization is designed from an operating model, structural perspective. And then, if you wanted to, you can lean into a function or you can lean into a team. And so, the application of simplifying work can really be tied with many different parts of an organization.
Josh: When you start trying to simplify something, when you say, “Okay, I want you to start a strategy.” Can you give us an example of how that might work?
Jesse: One of the examples I talk about in the book is a relatively well known one and that’s Apple. When Steve Jobs rejoined Apple in 1997, the organization had something like 25 different products. The philosophy of leadership was, “We’re a high-profile tech company. Therefore, we should have a presence in every single industry segment.” And so, they had different products across these different industry segments. They weren’t performing well and they were on the brink of bankruptcy. It was just pulling people in all these different directions across the organization because they had lost their clarity and focus.
And so, when Steve Jobs came in and he did this organizational review, he quickly made the decision, “We’re going to do four products. We’re going to do them absolutely, incredibly and they’re going to change the world.” All of a sudden, just letting go of all of these different business units that were driving different products and focusing the organization on a few products that they could really transform industries with, enabled them to all run at the same direction and produce the amazing products that they know, that we know, that they make. That’s one example.
Another example is Amazon. Obviously, Amazon is on the brink of taking over everything. They reached a point in their growth where they became a traditionally large, bureaucratic organization and leadership weren’t seeing the breakthrough innovation and creativity that they wanted, that they needed. And so, they installed this agile organization where they carefully selected individuals to be part of these small autonomous teams that go after really high strategic priorities. And then, that has fueled breakthrough innovation across these new products and services that they’re coming out with.
Josh: Yeah. I’m a huge fan of Agile. In fact, I went and got myself certified as a Scrum master a couple of years ago. Not for software because, frankly, I don’t work in the software industry much. It’s really for all sorts of blue-collar businesses. If I take Scrum and I put it into a construction company, I give them an unfair advantage over all of their competitors. And I can take their success at winning jobs from 10% to 15% up to 50% or 60%.
Jesse: Totally agree.
Josh: Really, it’s just by simplifying how they go about doing their work.
And so, I think, we are at this incredible inflection point. We’re on the cusp of this fourth industrial revolution. What’s’ holding us back are these 20th century ways of working. A huge driver of organizational complexity is this 20th century way of working.
Josh: Well, you know something? I think you’re partially right. Let me just interrupt you there because I’m going to use a quality control sort of model for a minute because there’s basically four schools out there. Well, there’s really five schools but everyone already forgotten about the fifth school even though it’s the most important which is Deming’s 14 points. You’ve got Six Sigma which is the most complex. You’ve got Lean, which is the Toyota production system, which is the next most complex. Then, we have Agile which is number 3. And the simplest of all is the theory of constraints.
I don’t see any small businesses trying to do Six Sigma under a thousand employees, but I do see a lot of businesses that are in the 50 to 200 realm who are trying to do Lean. Lean is way too complicated to do it for that size organization which means you really need to be an Agile or the theory of constraints, depending on what your company does.
Jesse: Yup. I have a perspective that would build on that.
Jesse: I see it a little differently. I don’t see it as those that are four as a comparison. The way I see it is and the work that I’ve done with helping organizations transform, a lot of that has been around either cutting out costs, you know, transforming operating models and reducing costs. But also, focus on strategic priorities. And, absolutely, that shift to Agile.
I think, with smaller companies, the simple opportunity that I see is with the new capabilities that are coming out with cloud‑based software services. And so, the opportunity to be able to cost effectively automate transactional processes in the back office is increasing exponentially every year. And so, from a back office perspective, there’s like a baseline level of service that you should expect from finance, IT, HR, even other parts of supply chain. I think we’re increasingly getting to that space where big chunks of those processes can be automated with emerging, cloud-based software programs.
I think, when it comes to the part of the organization which is outputting products and services or selling a product itself, those pockets are where you can best deploy the Agile teams because you need that for breakthrough innovation. And so, I think, when I talk about like “we’re on the cusp, we’re at this inflection point”, that’s the opportunity that I’m seeing. I think, Yes, Lean, Six Sigma – those have all been really useful over the past century. I think a lot of those best practices are being pulled over these new software programs that have essentially with these typical back office processes.
Josh: Now, I agree 100% with you, as long as we’re talking about millennials or younger gen‑Xer’s. If you go to older gen-Xer’s or, gosh forbid, baby boomers – I mean I’ve got some people who work in my office who can barely turn a computer on. There’s still a bunch of those folks in our workforce whether we want to admit or not. As time goes on, there’ll be less and less. And 20 years from now, we would look back to this conversation as being absolutely stupid. But today it’s not [laughs].
A lot of these businesses are what we call blue-collar businesses. As sort of my passion, how do you do blue-collar business into the 21st century? We use Monday in our office. You could if Atlassian, if you wanted to use Atlassian. Some people use Basecamp. I mean, there’s all sorts of programs out there that are absolutely wonderful to use.
I’ll tell you that even with the younger folks I have working with me, through our virtual assistants, they have a learning curve and sometimes it’s pretty steep. How do we make it simple to use this advanced software for people who are basically computer nerds? And I mean nerds by they don’t know anything about computers.
Jesse: Yeah. I think that’s a great question. Where I would start is the objective is to crush complexity and to simplify work for these companies where they’re not tech savvy.
Where I would start is with three steps. The first one is, again, figure out where your business makes the most money. Where are you strategically? What makes the most sense? I think you’ve to get really clear on those priorities first. And so, then, in any company should and could be able to do that.
The second step is, understand how work actually gets done today. Take a step back. Get a clean piece of paper. Put yourself in the shoes of people in your company or even sit down and have a little working session with them and say, “Okay, what takes up your time?”
Josh: I was just about to say, “You know, the people you really should have that conversation with is the people doing the job.”
Jesse: Yeah, 100%.
Josh: I’ll bet they’re doing the job differently than you think they are.
Jesse: 100%. You’ll likely reveal because I’ve gone through this exercise with many different companies. You’ll reveal that they’re spending a big tract of their time doing thing that they don’t need to be or should be.
Josh: Yes. Or, they’re not doing it all and they’ve also started to skip stuff they need to be doing too.
And so, you shining the spotlight on the reality of how work gets done today. And then, once you’ve got that view on how work is actually done across, whatever, [inaudible 00:12:58]. You can then reconcile that with clarity of the strategic objective, “What makes the most important?” And you can let that form what let go off, how you re-design the job, what technology you actually need, if any, because that’s the third step – is just the re-design – stripping out of the things that are pulling people from the most important work. I would start with that three-step process and not get hung up too much on technology for a company that isn’t that tech savvy.
Josh: And then, what you can do is you can start saying, “Okay–” and this is where the consultant world comes in. They hire somebody like you to come in. I mean, my guess is you’re probably too expensive for the business with 35 employees. There are people out there who will help a company with 35 employees look at their systems and then say, “Here’s a software piece that you might want to start with that’s simple enough for you to learn. We’re only going to automate one process at a time until you get used to it.”
Jesse: Spot on. Spot on.
Josh: I mean, I did that with an engineering company. I put the son onto a project. I said, “You go find a software package that you think you might like. We’ll see if it will help us get the job done.” As it turns out, they use Atlassian, scrum, Kanban board and they became way more efficient as a result of that.
Jesse: Absolutely. I mean, I left Booz one and a half years ago and launched my own little consulting firm like this. I’m, by no means, a financer and [inaudible 00:14:21]. I got Xero, the cloud-based finance software, and I got Salesforce. Just within those very cost‑effective cloud-based software programs, I was able to automate a huge chunk of what I need to do to run another consulting firm. And so, they’re really not that difficult to learn. The ability to be able to strip out a whole bunch of repeatable transactional activity is really huge and enabling small business owners or managers to be able to really focus on the things that are most important.
Josh: The other thing which I think– and you mentioned something, which I really like the idea of, which is, “Know which product line we should be focusing on and which ones we shouldn’t.” If you have a product line – this is just my opinion and I want to hear your opinion on this, I think you need a P&L on that product line. The reason I think you need a P&L is you don’t know if it’s any good or not unless you know it’s making money.
Jesse: Yeah. That’s one of these macro operating model organizational design questions. And so, that’s the different between like a product-focused org structure versus like a customer‑focused org structure. I think the difference is, if you’ve got a ton of customers, and you’ve got a few products, and you’ve got a lot of customers that are taking up a few products, then yes, it should be a product‑led org structure. If you’ve got only a few customers, then it should be more of a customer-led.
Josh: I think you’re probably right there. In my particular case, I have four products that we have. I want to know which of those products is getting the result because I need to be asking myself a question, “If these products are not getting–
By the way, a product is often a grouping of smaller products [inaudible 00:15:53]. Like in my vending business – well, that’s another thing that happened was we went from 200 items available for our glass-front snack machines, those things with the candy bars and the potato chips and all that sort of stuff in there, to 24. We went down to 24, our people got happier. Our productivity went higher. Our profits went through the roof.
I mean, all of these good things happened because we simplified the process of what we put into a snack machine and how we went about doing it. By the way, that happened by mistake but that’s– a whole lot of things happen. This was back in the ‘80s [laughs].
Josh: In the ‘80s, nobody was even thinking about this much stuff, talking about it.
Jesse: That’s a nice segue into why complexities become such a problem now because of the demands of today’s customers. They want thing that are cheap, and high quality, and are reliable, and globally consistent. Rewind, three or four decades, if you can achieve price leadership, you’re a winner. If you could achieve the global consistency – it was like one particular part of the strategic priority, If you can nail that that then you would win. But, today, you have to have everything.
Josh: You know, it’s really interesting. I think that that’s kind of a misnomer in the fact that that’s caused by having poor niche management, in my opinion. If I’m selling to the same group over, and over, and over again, my solution for that group is going to be so similar that it’s going to be hard to tell the difference between one person and another, when they buy it from us because, essentially, let’s say I’m–
I mean, Apple does this. Apple is the largest niche company in the world. They know who their customer is. Their customer is somebody who values the ecosystem of Apple. In other words, I don’t have to go around and search 19 different things to make sure stuff works together. If you buy something in the Apple ecosystem, it’s going to work with other stuff in the Apple ecosystem. Not true in the PC world, necessarily. Sometimes you have to screw with it a little bit.
I think it’s really, “Do you know who your customer is? And are doing the same thing for that customer over and over again?” People call it the head and shoulder method. Wash – Rinse – Repeat [laughs] so. That’s just from my experience over the years. Yours may be different.
Jesse: No. I think that’s an interesting view. For sure. I think if you’re– yeah, and inevitably, if you’re targeting a customer of one particular thing, it’s going to be a one-hand system.
Josh: By the way, I always think all businesses need to be 100% customer-focused.
Jesse: Never enough, absolutely.
Josh: Yeah. You know, when I say you want to know what the P&L is on the product, you may not want to service that particular customer because you can’t make money at it or you’re not going about it correctly, you don’t know enough about that niche. Everything you do in a business, in my opinion, needs to be customer focused. Nordstrom’s which is not as good as they used to be. Nordstrom’s used to be “Do the right thing.” That was their whole mantra.
One of the other drivers of organizational complexity, they have too many layers. Typically, when we do a spans and layers assessment of the company, we’re trying to remove some of the layers. Many companies still have too many layers. What that does is it pulls apart the distance between leadership, and the frontline, and the customer. And so, the frontline people are interacting with customers. They’re capturing rich feedback, that’s the opportunities or taking up problems that need to be solved. By the time it goes through, the six different layers, to get to the top, it’s been watered down so much you’ve lost all the richness of those observations.
And so, I think, to build on that real point, that’s a huge opportunity. I think that’s part of the value proposition of the Agile organization is that you’ve got these groups that are interacting with customers. They’re seeing opportunities. They’re actually going after them. They’re executing. They’re learning, iterating product designs.
I think, with the technology we have today, all of those insights are captured in the system where it’s fully transparent across the organization. And so, the leaders get real-time views of customer insights. And so, you don’t have to set up these formal program management office meetings and ask for reports, and filling in templates, and all these things that pull people from priorities. You’ve got these small teams that are seeing opportunities. They plug in information into a system that can be viewed by other people in the organization and are able to move much more nimbly and actually jump on opportunities when they see them.
Hey, Jesse, unfortunately, we are out of time. I’m going to bet there are going to be people listening to this podcast or watching on Facebook Live and they’re going to want to know how they can contact you or where they can get your book. Can you tell us both?
Jesse: Yes. Well, I’ll start book. The book is Simplify Work: Crushing Complexity to Liberate Innovation, Productivity, and Engagement. It actually is on bookshelves tomorrow which is a long time coming.
Josh: Congratulations. It is a big deal getting that day coming.
Jesse: It is a long timeframe.
Josh: And now, you’re in for the hard work – marketing the book [laughter]
Jesse: Exactly. Simply Work is my company, so you go to simplifywork.com.
Josh: Great. I appreciate that.
I have an offer for you, too. I mentioned earlier that I’ve written a book. It’s out for a year now but it’s still available. I’ve got a couple of nice bonuses if you go to my website and buy it. You can, obviously, buy it at Kindle. You can buy it in Amazon – buy it both in Amazon, the Kindle or the print version. If you go to my site, sustainablethebook.com, click the big orange button. You can buy the book there and it will get you a free 20-minute strategy conversation with me. I wrote a 37-page cheat sheet on how to use all the stuff I wrote about in Sustainable because the book is a story. And when you’re writing a story, you don’t write how-to’s so I put the how-to as an addendum that you can get by buying the book on our site.
This is Josh Patrick. We’ve been with Jesse Newton. You’re at the Sustainable Business. Thanks a lot for stopping by. I hope to see you back here really soon.
Narrator: You’ve been listening to The Sustainable Business podcast where we ask the question, “What would it take for your business to still be around a hundred years from now?” If you like what you’ve heard and want more information, please contact Josh Patrick at 802-846-1264 ext 2, or visit us on our website at www.askjoshpatrick.com, or you can send Josh an email at email@example.com.
Thanks for listening. We hope to see you at The Sustainable Business in the near future.