In this age of technical complexity, it might surprise many of you that simple is good. Remember the adage, "Keep it simple stupid," known as the KISS theory? Although it sounds silly, that short statement contains a lot of wisdom. Too many firms are excessively complex with strategies for tax management, risk shifting, and other business concepts.
While these strategies have value, the firm risks losing focus on the core business when management relies on complicated strategies, rather than on the basic business of the firm. Keeping the firm’s organization simple and understandable helps staff know the direction of the firm, encourages investment by new owners, and keeps everyone attuned to the core business, which in turn helps produce quality work at a profit.
Keeping things simple also allows a firm to grow and still stay nimble enough to react to the constantly changing business environment.
Perceptions and reality
We all hear from our peers in other firms about all the great things they are doing to make their firms successful. Each idea probably sounds great by itself, but before we incorporate it in our firm, we need to determine how it fits with our culture. Many good ideas mixed together without concern for the whole can lead to a sluggish and bureaucratic company. The perfect organizational structure is what is right for a particular firm.
Rules for business change regularly, whether from the federal government, accountancy boards, lending institutions, or professional licensure boards. Reflecting on why the changes were made gives firm leaders insight into the underlying reasons for the modifications. This could then lead to a more holistic view of how to adjust the firm to meet these new requirements.
Everyone knows the value of and reasons for documenting various processes within any organization. But firms should not get so process-focused that they drive independent thinking out of the company. Each firm needs to decide what processes are fundamental to its culture or core business, and what it can leave to the judgment of staff.
While many processes are important, not all need to become formalized. If we can keep formalized processes to a minimum, there is a better chance that they will be respected. Simple and robust processes thrive where there is good communication throughout the firm and when firm values are discussed frequently by leadership. Because employees then know what kind of behavior is expected of them, they can more consistently adhere to processes and think more independently.
One of the challenges that all engineering consulting firms face is ownership transition. Complicated organizational structures and processes of ownership work to dissuade individuals from purchasing stock. Bureaucracy begets higher overhead, which results in less profit.
Firms should make investing in a privately held company with limited liquidity a good investment to new and younger ownership. Keeping it simple and efficient lets the firm work better, which encourages the next generation to invest and help to transition ownership.
We all look for a static organizational structure. We like static organizations because we know what will happen or what we must do in a given situation. However, such an ideal condition does not exist for long.
Global competition forces us to be nimble and efficient. Furthermore, technology changes, such as Building Information Modeling, force us to change our design processes, which in turn might make us revisit how we are organized.
Since there is no one, simple, perfect organizational form, the structure of our companies should evolve as circumstances change. This does not mean, however, that leaders should allow unnecessary complexity to creep into their companies. Keep it simple.
Raymond F. Messer, P.E., is president and chairman of the board of Walter P Moore (www.walterpmoore.com), based in Houston. He can be reached at firstname.lastname@example.org.
WALTER P MOORE
Number of offices: 9
Total number of employees: 360
Year firm was established: 1931
Total billings for last fiscal year: $62.8 million