Summary of Waging War on Complexity Costs

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Waging War on Complexity Costs book summary

Rating

8 Overall

8 Applicability

8 Innovation

7 Style

Recommendation

A company’s complexity directly affects its cost structure, the biggest determinant of its capacity to compete. Businesses can gain enormous advantages by minimizing or eliminating complexity. For example, offering a wide variety of products and services may be inefficient, while a condensed product line could improve a company’s profitability. Not all complexity is counterproductive, so distinguishing “good complexity” from “bad complexity” is critical to simplifying a business. Consultants Stephen A. Wilson and Andrei Perumal promote a thorough – though sometimes, ironically, complex – approach to complexity control that unearths “non-value added” spending you can target for reduction. While the authors’ systematic prescriptions clearly apply to large companies with extensive product and service lines, getAbstract believes this book can also be useful to small and midsize businesses as a tool for weeding out wasteful complexity.

In this summary, you will learn

  • How companies waste time and money on business complexity that does not benefit customers;
  • What steps firms can take to distinguish “good complexity” from “bad complexity”;
  • How to reduce “product, process and organization” complexity; and
  • How to cut complexity costs.
 

About the Authors

Stephen A. Wilson and Andrei Perumal are managing directors at Wilson Perumal & Company, a management consultancy.

 

Summary

Variety at Any Cost?

Familiar all over the the world for its characteristic three-sided shape, the Toblerone chocolate bar nonetheless morphed over the past century into various sizes and versions, depending on geographic market. Food giant Kraft took over Toblerone and made it part of a corporate “decomplexity effort.” The manufacturer cut product expenses by standardizing the chocolate bar’s size and reducing the number of plants that produced the brand from nine to one. Kraft also slashed process costs in marketing, packaging and supply chains. All told, Kraft realized pretax savings of $400 million annually, just by simplifying a chocolate bar.

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