SAP Thought Leadership Paper

Future of Work

Taking Charge of Business Simplification

Why Simplification Initiatives Succeed Only
When Executives Lead
© 2015 SAP SE or an SAP affiliate company. All rights reserved.
Taking Charge of Business Simplification

Faced with increasingly complex business operations,

networks, and processes, business leaders talk often
about the need to simplify. And why not? Embracing
simplicity does seem like a path to greater efficiency,
customer satisfaction, and profitability. However, if this is
truly the case, why are business processes and decision
making getting more complex? And who is responsible
for making the dream of simplicity a reality?

© 2015 SAP SE or an SAP affiliate company. All rights reserved.

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Taking Charge of Business Simplification
RECOGNIZING THE STRATEGIC VALUE
OF SIMPLIFICATION
Simplification is a key goal for businesses of all
sizes, in various industries, and in countries around
the world. With increasingly global operations,
diverse workforces, longer supply chains, shorter
product cycles, integrated technology solutions,
and empowered customers, they are facing the
most complex environments in history. Higher
complexity increases costs, reduces productivity,
and inhibits organizations from meeting their
business goals.
Senior business leaders clearly recognize the need
for simplicity. In the recent survey “Simplifying the
Future of Work Study,” by Knowledge@Wharton
and SAP, 51% of senior business leaders said that
business simplification is of significant strategic
importance to their organizations today. Approxi-
mately 67% indicated that simplification will be
strategically important within the next three years.
Leadership offers the best way to
overcome the complexity cycle. It’s time
for executives to take ownership of
conveying the importance of simplification,
planning effective programs, measuring
success, and rewarding progress.
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Yet, recognizing the need for simplicity isn’t
sufficient to make progress on simplification
efforts. How many executives have stood up in
front of their employees, quarter after quarter,
extolling the virtues of simplification – only to
make no progress in reducing complexity? It isn’t
enough to just recognize or talk about simplicity:
achieving this goal requires true leadership.
MATCHING PRIORITIES WITH ACTIONS
Rhetoric about complexity without any related
action creates a cycle of disengagement and
learned helplessness. Believing that simplification
is established as a priority, senior leaders struggle
to understand why processes and decision making
are increasingly more complex. Employees fail to
see a way out when they encounter complexity.
As a result, complexity increases, rhetoric intensifies,
and the program begins to lose credibility. Complexity
comes to be viewed as an intractable problem –
something that everyone knows is there, but no
one dares to touch.
© 2015 SAP SE or an SAP affiliate company. All rights reserved.
Taking Charge of Business Simplification

For employees, this gap creates a cycle of disengage- These results point to a huge gap between what
ment. The Knowledge@Wharton survey revealed business leaders say about simplification as a
that only 27% of respondents believe the day-to-day business priority and the actions they take to
actions of senior leaders are strongly aligned with help simplification efforts succeed. In other
the stated importance of business simplification. words, executives are “talking the talk” when it
However, within their own teams, there appears comes to simplification, but they have yet to
to be more progress. Approximately 34% indicate “walk the walk.” What’s more, executive leadership
that the daily actions of their immediate team are is failing to motivate employees to make choices
strongly aligned with the stated importance of and changes that simplify the business.
simplification. Leadership of simplification appears
to be easier at smaller scale. ASSIGNING RESPONSIBILITY FOR CHANGE
Complexity often creates inertia and a sense of
Faith in the success of corporate simplification powerlessness within organizations. Executives
efforts is also limited. Only 17% of respondents are frustrated, while employees want to see action.
think business simplification efforts to date have So who is responsible for simplifying highly complex
been very effective. And they aren’t hopeful for the organizations, processes, and decision making?
future either: Only 42% believe that simplification
efforts will be strongly effective three years from There is no question that change must come
now. (See the figure.) from the top. Leadership offers the best way to
overcome the complexity cycle. For simplification
efforts to succeed, senior leaders must change the
Figure: Gap between the perceived importance and way they approach the simplification challenge. It’s
effectiveness of simplification efforts time for executives to take ownership of conveying
the importance of simplification, planning effective
programs, measuring success, and rewarding
60% progress.
50%
40% Employees have ideas too. When asked what
30% business leaders need to do to increase the
effectiveness of their business simplification
20%
efforts, survey respondents suggested several
10%
improvements, such as:
•• Reduce barriers to change
Simplification Day-to-day Simplification
is of significant actions of efforts have •• Reward efforts to simplify
strategic senior leaders been very •• Communicate more
importance are strongly effective •• Lead by example
aligned with •• Be more innovative
simplification
Source: “Simplifying the Future of Work Study,” survey by
Knowledge@Wharton and SAP

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Taking Charge of Business Simplification
GETTING STARTED WITH SIMPLIFICATION
SAP has begun to identify several best practices
that support program success:
••Talk only when you’re ready to act. To show
employees that you are serious about simplifying
the business, discuss simplification initiatives only
after you have created a plan of action. Executives
who introduce the need for simplification without
a concrete plan may find that their credibility is
compromised.
••Let simplification stand alone. Don’t merge
simplification plans with other initiatives. Assign
your simplification program its own concrete
goals, budget, and support. Don’t confuse efforts
to simplify with efforts to “improve.” Without
clear direction, projects become muddled and
ineffective.
••Do your own company diagnostics. Find out
what people in your organization think. Do
employees believe that company leadership
accepts and understands the concept of simplifi-
cation? Do workers trust that executives are taking
the appropriate action to support simplification?
SIMPLIFICATION EXPERIENCE IS AVAILABLE
Many employees already have experience supporting simplification efforts. According to the
Knowledge@Wharton study:
84% Simplified a business process within their team
82% Simplified a decision within their team
52% Led simplification efforts that reached beyond their team
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By understanding these opinions, you can identify
the simplification gaps in your company.
••Identify and support natural leaders. Look
around and you will spot people in your organization
who understand and promote simplification.
Find ways to support and champion the efforts
of simplification leaders.
•• Learn to quantify simplification and benchmark
your progress. Create a balanced scorecard
that establishes the key metrics that stakeholders
agree will lead to simplification success. SAP
experts are available to help customers create
such scorecards, so they can objectively measure
progress on simplification.
Global simplification initiatives are still in their
early stages, and SAP is helping businesses with
their simplification initiatives. By identifying those
processes and decision points in the business that
embody complexity or offer the greatest opportunity
to become simpler, SAP can help customers
prioritize simplification initiatives.
© 2015 SAP SE or an SAP affiliate company. All rights reserved.
Taking Charge of Business Simplification

Simplification isn’t free – and many times, it is FIND OUT MORE

difficult to link obvious simplification to quantifiable
business value. SAP is linking simplification
initiatives to business value so that businesses
can justify, fund, and execute the simplification
initiatives at scale.
For more information on how to successfully
execute business simplification initiatives, visit us
at www.sap.com/Leaders2020 or join the
conversation at #FutureOfWork.

© 2015 SAP SE or an SAP affiliate company. All rights reserved.

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