MIT Sloan Executive Education

innovation@work™ Blog

Tag Archives: product design

Three ways to profit from business complexity

Business complexity is usually seen as an obstacle to increased profit margins. A publication of The Global Simplicity Index revealed that complexity is costing 200 of the biggest companies in the world 10.2% of their annual profits—which, collectively, totals over $237 billion. But other recent studies show there is a profitable flipside to business complexity—a relatively unexplored area of opportunity hiding in plain site. For some companies, managing business complexity can be a unique opportunity to grow their market share.

Not All Complexity in Business is Value Destroying

According to Martin Mocker, Research Scientist at MIT’s Sloan Center for Information Systems Research (CISR), not all complexity in business is value destroying. In fact, in some instances business complexity can be value-adding, offering companies an opportunity to grow their market share. The key, says Mocker, is to focus on complexity that delivers “variety seeking, one-stop-shopping, customization, or seamless integration.” Finding balance, “keeping the complexity of their processes and systems—both internal and customer-facing—under control,” is the way to manage business complexity toward a profitable advantage.

Continue reading