Feature

The road to success is simplicity

Businesses have a natural tendency “to grow more complex as they mature,” and that complexity can be a “silent killer.”

SchumpeterThe Economist

Keep things simple, said Schumpeter. That is the key to a successful business, according to Bain & Co. consultants Chris Zook and James Allen. In their new book, Repeatability, they lay out how the world’s most successful companies “make a cult of simplicity” and relentlessly apply stripped-down business models to new opportunities. You can see this winning formula of “simplify and repeat” in Ikea’s flat-packed furniture, McDonald’s hamburgers, and Berkshire Hathaway’s buy, improve, and hold approach to investing. Lego learned the lesson the hard way. In the mid-1990s, the Danish toy company expanded feverishly into theme parks, television, and clothing lines; that led to years of dismal results. Only when it went back “to its roots”—those little plastic bricks—did big profits return. Businesses have a natural tendency “to grow more complex as they mature,” and that complexity can be a “silent killer.” For all the worries companies have about being “crushed by the next big thing,” the best way to survive dramatic change is to “keep hammering away at the simplicity mantra.” 

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