
How to Simplify Systems for Business Growth
The Double Win
Navigating Complexity in Business
This chapter explores the gradual build-up of complexity in business processes and its adverse effects on efficiency and growth. Using allegories and personal experiences, the discussion emphasizes the importance of cultivating a mindset of simplicity while minimizing unnecessary systems and features. By highlighting the balance required to manage complexity, the chapter provides practical insights into streamlining processes to enhance productivity.
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Speaker 1
And if you create a new company that is better at, say, making electric vehicles, society is vastly better off if the electric vehicles making robots are in, you know, a gigafactory and reassigned to the gigafactory rather than if they're still at general motors being utilized in a suboptimal way. So straightforwardly, you know, market discipline rewards functionality. There's just insufficient mechanism for it to create functionality. And, you know, we could, we could go deeper into, let's say, like the core of the work issues argument. And if you like the core of it, you know, and by the way, when people respond to an argument and they say, oh, but there are other arguments against, say, I don't know, Curtis Yarwin's position. Well, I can only respond to the arguments that are explicitly written. It's necessarily beyond the scope to say arguments that aren't there. But let's look at the argument that is there. There's this idea that there is unbounded downside in government. I sort of don't believe that at all. I mean, even in the most catastrophic cases, for example, in the Chinese government, after Mao, there was a recognition that the policies were disastrous. And in fact, Mao was removed from power before he died multiple times. So he was accountable, in a sense, to at least the other members of the Chinese Communist Party. Now, this is not always the case. Stalin obviously secured his position to such an extreme degree that it was sort of impossible to go with a different leader until his death. But, you know, I think that, for example, for China and the Soviet Union, I think the disaster might have been the bad policy, not even the bad leadership. I wonder if someone else were running the same system Stalin was running, would there have been a Ukrainian famine? I think probably so. So in that case, I would put the blame on sort of the fundamental faults related to Bolshevism and the fundamentally incorrect theory of Marxism. And I would actually say that that is probably responsible for more of the problems. And merely, you know, applying groupthink, that doesn't actually solve those problems. If there was a committee in charge of revolutionary Russia or revolutionary China, and we eliminated their being a single leader and said there's a plurality of them, and everything the committee believes is crazy, the effects would be just as bad. And in fact, we have a historic case study, like, you know, the French Revolution had the directorate, which was the sort of revolutionary council, or the Committee on Public Safety in France, right? So I think the attempt to just the assumption that we're just picking the assumption that basically it kind of doesn't matter what the ideas are of the relevant people running a country. I think that's the assumption I would challenge. So I would say that actually the 20th century shows that there are few ideologies that were just radically incorrect about the nature of the world. They would have been radically disastrous if implemented by a single individual, aka a dictator or a president, but they would have been, and in fact were, just as disastrous when implemented by a committee or a bureaucracy. So does government in fact, have greater downside compared to a private company? In a lot of ways, yes, obviously. It has a monopoly on violence. So you can have disastrous wars can be started. The rights of citizens can be trampled. But then also the stakes, the economic stakes are higher. If Apple fails, well, that's just Apple. If the US economy fails, well, then Apple fails anyway. It fails by default. So let's put it this way. The upside of a well-run government is vastly higher also than the upside of well-run Apple. Yeah.
Speaker 2
I was also confused by that part of the argument because it seemed to imply that to some extent, if Apple were a committee or had collective decision-making, it would be safer or something, or there would be less risk when that's not the case. Holacracy is a terrible trick. The
Speaker 1
riskiest thing is never changing, right? Exactly.
Speaker 2
As the world changes. Exactly. And I think applying it to government, yeah, I think. I mean, the same could happen to governments,
Speaker 1
right? Yeah. If the U.S. government remains a static dinosaur, China will outcompete the United States, free market or not, because they know how to use markets. They make smartphones and they make cars and they make AI. And you know what? Maybe the U.S. government should be competent too. Yeah. And I think
Speaker 2
that's what they're really saying is not that it's less risky to have a committee-led decision-making. No one wants direct democracy. I think what they're actually saying is a gridlocked government is less riskier than a government that is making lots of decisions in case you have the wrong person making those decisions. But I would say, I would just... you your point, maybe short term, but long term, especially in a world where the most powerful player, you know, sets the agenda, there's no way that the most powerful player is going to be a dead player, so to speak, no way it's going to be a sclerotic, bureaucratic, you know, entity that can't make decisions because there is going to be a Steve Jobs-led, you know, level leader. Country. Yeah, a country that is going to, it's almost like the innovator's dilemma, but applied to countries. Like an innovation dilemma that says, you know, big companies can't innovate because they're too busy sort of, you know, protecting their existing resources or focused on what they already have. They don't want to disrupt themselves, but, you know, they'll lose to some upstart that is, you know, has a great, you know, live player leading them. And similarly on a country level. So I'm not sure what they're
Speaker 1
advocating for there. I mean, I think implicitly what they're saying is that all is well and that the United States is not currently in any big problems. So we can kick the can down the road of these fundamental government problems. But I think the other problem here is that there's not just the catastrophic risk of being radically outcompeted. It's the fact that every single government bureaucracy decays from the moment of its founding over time, right? A bureaucracy works the best when you set it up first because it's like an automated script performing a function. The only thing that changes over time is a greater amount of graft, a greater amount of overstaffing, a greater amount of incompetence, a live player like actively resets it. And there's a political reason to expend sort of political energies needed to actively reset it. And I think that happens very infrequently in politics. So it's not just that, oh, we can just keep things as they are and the government will stay equally incompetent. I think the result will be every single year the government will work a little bit worse. So eventually it hits the tipping point where no amount of private sector innovation can escape omnidirectional taxation, omnidirectional inflation, and like omnidirectional regulation. It's sort of, you know, I think we have to start thinking in a very different way where, you know, normally people talk about Elon Musk having revolutionized the electric car industry and revolutionized space because he's in the United States. But let's consider maybe he did it despite being in the United States, despite having to deal with the government. Now, to be clear, China doesn't have the kind of society that could accept an Elon Musk. But you know, they have their own jack ma's and so on, and they can harness them, right? Or this quant that leads the recent DeepSeek company. But DeepSeek for those who've not been following AI news, is this model that people are disputing for how much it was trained, but no one is disputing that it was trained to a level equivalent to Western models at a vastly lower price point, which suggests mathematical innovation or at least very efficient code compared to how Western companies train these foundational models for the chatbots. So I would say that at the very least, we have to wonder, well, where are all the other Elon Musks if our system is so excellent at it? Why is all the industrial innovation coming out of China right now? And I don't want it to. I do think China is a less free society than the United States. I think that there's a sort of conflation of freedom and gridlock, where I think a gridlocked government is actually the enemy of freedom pretty directly. Because it functions as a beatocracy, and it can't help but function as a beatocracy when dealing with its own citizens. So I actually think that the petty tyranny of the bureaucrat also becomes much worse in a gridlocked government than in an agenda government. Imagine a garden is overgrown with weeds. In a way, the most toxic weeds, the ones that grow the fastest, that consume the most light, that cause the other plants to fail, those weeds will overgrow your garden. I think that's kind of happening with the U.S. government and U.S. society. And currently, we can be a little hopeful that possibly there's some gardening happening and possibly some of the weeds are going to be plucked off the trees before they kill them, right? Before the vines smothers the trees. And, you know, if you want to look at examples, like we don't have to be very theoretical. Let's put it this way. Europe has even more gridlocked governments. And these governments have succeeded in squashing their economies and growth in their economies. Is that really the direction we want to go in? Because remember, it'll be a little worse every single year until we course correct. So I really think that there's this assumption that government is infinitely fragile. And I think the truth of it is more that government is very intermittently functional. It's very hard to set up a functional government. If you set it up, you're kind of set for a century or so or 50 years or so. But eventually someone has to reset it. Look, I guarantee you the government of Singapore will not be very competent in 50 years because it'll have been 70 years since the live player ran it. Right. Currently, it still works super well. It's like Apple in the first two years after you have a handoff from Steve Jobs. You know, you have your winning product, you're still collecting the benefits. In Singapore's case, the benefits of giving everyone air conditioning, of having clean streets, of having rule of law, all of these things are set up and running, but they're not really self-sustaining. And eventually the civil service in Singapore will come to decay and will come to be like an overgrown weed
Speaker 3
garden.
Do you know why Steve Jobs insisted that the original iPhone have only one button? Because nothing succeeds like simplicity. Take out your iPhone, if you have one, and compare it to a Comcast remote. See the difference? Sleek simplicity versus mind-boggling complexity. We all know that simplicity increases speed and fuels business growth. But we seem to be stuck with clunky, cumbersome business systems. And they multiply like rabbits! Hiring, project approval, communication tools, and even expense reporting can be numbingly complex and tedious. We feel that too, which is why we recently simplified one of the main aspects of our business, our software solutions. We now use a combination of only four products to run our business: G-suite, Slack, Spark, and Asana. Are they the best tools out there? We don’t know, but they’re the simplest ones that meet our needs. We’re collaborating faster and better than ever before. And our team loves it. Simplicity always wins. In this episode, we show you how to simplify your business systems. Not just tech, but everything you do. Our chief content officer, Joel Miller, joins us to explain why complexity is such a huge problem for many businesses, and how you can eradicate it with four deliberate actions. Here’s an overview of this episode— Joel explains why complexity multiply so quickly in a business. We talk about the subtle clues that complex systems, not true business needs, are creating the need for more staff. We offer tips to help you recognize complexity creep. Michael opens up about the a-ha moment when he realized the need to simplify our product line. We give real-world advice for eradicating complex systems from your business. One more thing. After you listen to this episode, don’t be afraid to take the plunge and start eliminating tools, processes, or even products that are slowing you down. Sometimes it’s hard to let go, but you will never regret making your business simpler and more responsive. You can do this! Resources Mentioned in This Episode The Founder's Mentality: How to Overcome the Predictable Crises of Growth by Chris Zook and James Allen Insanely Simple: The Obsession That Drives Apple's Success by Ken Segall “On Style” by Arthur Quiller-Couch (see paragraph 6) Business Health Assessment Here’s One Thing That Will Really Help If you’re really loving the show, would you leave a review on iTunes. That’ll help others find this program so they can benefit too. And it really helps us make the podcast better. Good, bad, or indifferent, we’d love to hear what you think. We read every single review, and we’re grateful for your feedback. Click here to rate the podcast and leave your own review.
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