Managing complexity: How CEOs can drive value
Complexity in all its forms lies at the heart of all organisations and regardless of whether you are a public or a private organisation it can have either a negative or a positive impact on your business.
Operational, structural and acquisitory complexity, for example, is often necessary and a way for organisations to drive value and create a competitive advantage. The CEO's task is to identify and nurture constructive complexity while locating and reducing the complexity that destroys value and exposes the organisation to unnecessary risk.
According to PricewaterhouseCoopers research, nearly 80% of CEOs we recently interviewed agree that managing complexity is a high priority for their organisations.
The first task for any organisation is to develop a thorough understanding of its business model and its strategic intent, and to ensure that both are fully aligned and put into action.
The next step is then to assess and categorise the kinds of complexity your business faces and the implications this has on your operation and the ability to operate as efficiently as possible.
Complexity often manifests itself in four main organisational areas and it is in these areas that inertia or 'drag' tends to occur:
- Operations & data
- Controls & governance
- Management & culture
- Legal structures
Following the analysis of these areas, the next step in eliminating complexity is to identify and remove any entities or activities that are not fully aligned with the overall business strategy.
While complexity operates on many levels, PwC has developed a comprehensive model for the overall management of complexity. Our specialists can offer a solution that integrates all areas of your business with a view to removing unnecessary overlaps in costs, entities and activity, as well as simplifying business processes.
We understand that in today's climate, a holistic approach - including strategy, operations, tax and finance - is essential for success, regardless of the industry sector you operate in.
Integrating the issues of cost, competition and efficiency will help eliminate unnecessary complexity while helping your business better embrace the type of complexity that creates true value.
