Remember factoring out from math class, where you had to simplify an equation by finding the common factors?
Startups often start out as a fairly simple equation. But over time, as your organization grows, it becomes more complex. As you scale, your business model gets complex. It creeps in naturally.
You know what’s complex in your business. As you scale, focus on simplifying those things.
Once in a while, you have to stop and factor out. Take the equation of your business and figure out how you can simplify it. Complexity can be a killer.
Where can you factor out complexity as you scale? One example is in your contracts. Try to keep them as standard as possible. You’ll have more leverage as you scale than you had when you did your first few agreements. By standardizing, you’ll remove complexity that someone has to remember, track, report, and comply with that is different from every other deal you’ve done. Or maybe your chart of accounts in your accounting system has gotten too complicated. By combining things where you can, you get a simplified view of the performance of your business. And take a look at your org chart. Do you have lots of “dotted lines” and managers with one person working for them? These are signs that your org might be getting too complex.
“The ability to simplify means to eliminate the unnecessary so that the necessary may speak.”
Hans Hofmann
I love the “start, stop, continue” exercise. Make a list of all the things you’re doing, and then get in a room with your team and decide what you want to stop doing and what you want to continue doing. What you stop doing might lead to opportunities to start doing some meaningful new things, or at least to continue doing some things with a renewed focus.
Go kill one complicated thing your business is doing. I bet you’ll get addicted.
