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Source: Reviewed by World Business
Date: June 2006
Companies are inevitably becoming more complex, especially as a result of the challenges of doing business globally, engaging in M&A and the ongoing need to launch new products and services to meet changing customer needs.
In many cases, this complexity arises from value-creating activities - and should therefore be tolerated and coped with - but 78% of the 1,400 CEOs in this survey across 45 countries also said that reducing unnecessary or negative complexity was a high priority.
Virtually all CEOs said their organisations were engaged in complexity-reducing programmes, with IT and organisational structure being the most common areas. However, while CEOs understand the importance of effectively managing complexity, very few rate highly their own organisation's capabilities in this area.
Key concerns are not having enough capable people, lack of effective communications and insufficient ability to identify activities that destroy or create value. CEOs should take more meaningful action to address these concerns.
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