Conquering the cost of complexity : how Wal-Mart, Southwest Airlines and other top companies achieve decisive cost advantage (Book, 2004) []
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Conquering the cost of complexity : how Wal-Mart, Southwest Airlines and other top companies achieve decisive cost advantage

Author: Michael L George
Publisher: New York ; London : McGraw-Hill, 2004.
Edition/Format:   Print book : English

Helps readers find out why the trick to outperforming their competition and staying ahead of the curve in a customer-centric business environment is achieving the optimum levels of complexity in  Read more...


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Document Type: Book
All Authors / Contributors: Michael L George
ISBN: 0071435085 9780071435086
OCLC Number: 56453237
Description: 300 pages ; 23 cm
Contents: PrefacePart I Complexity: The Silent Killer of Profits and GrowthChapter 1 The Overwhelming Case for Conquering ComplexityA Tale of Two CompaniesThe Three Rules of ComplexityComplexity Rule #1: Eliminate complexity that customers will not pay forCase #1: The story of Southwest Airlines vs. American AirlinesComplexity Rule #2: Exploit the complexity customers will pay forCase #2: Capital One vs. MBNA, Bank of America, et alComplexity Rule #3: Minimize the costs of complexity you offerCase #3: The real secret of ToyotaCase #4: Experience bought, not taughtFinding the Right Combination of External and Internal ComplexityThe Complexity Value PropositionConclusion: The competitive advantage of conquering complexityChapter 2 Exposing the Silent Killer: How (and how much) complexity drains time and resources in your businessHow Complexity Silently Kills Profits and Drains ResourcesProcess Cycle Efficiency: The foundation for quantifying complexityQuantifying What Affects PCE: The Complexity EquationHow Variation in Mix Destroys PCE and ProfitWhat Lever to Pull?: Advice on improving PCEThe Power of NumbersConclusionChapter 3 How Complexity Slows the Flow of Critical InformationInformation Flow Complexity = Too Long to Reach Decision MakersComplexity Creates Noise in Information SystemsDell and Compaq: Better to be fast than firstHow Does Dell Achieve Fast Information Flow?Conclusion: Cumulative effect of complexity on strategic decision makingChapter 4 How Conquering Complexity Drives Shareholder ValueThe Challenges of Accounting for ComplexityMaking Decisions That Benefit Shareholders: Earnings Per Share vs. Economic ProfitKey Lessons About EP and GrowthThe Complexity Imperative in Fast MarketsThe Links between Complexity and ValueConclusionChapter 5 Complexity as a Strategic WeaponSix Precepts For Strategic Use of ComplexityPrecept #1: Customers define valuePrecept #2: The biggest gains from conquering complexity come from step-change improvementsPrecept #3: Focus on what matters most-100% of your value creation probably resides in only 20% to 50% of offeringsPrecept #4: Think value share instead of market sharePrecept #5: Growth results from value-driven application of finite resourcesPrecept #6: First eliminate offerings that can never generate positive Economic Profit, then attack internal complexityALDI International: A case study in strategic complexityEating Away the CompetitionALDI's Secret of Success: Eternal watch against complexityConclusion (and a look ahead)Part II Complexity Analysis: Quantifying and Prioritizing Your Complexity OpportunitiesExecutive Overview of Complexity AnalysisChapter 6 Identify Strategic Complexity Targets (Complexity Analysis Phase 1)Overview of Target SelectionStep 1: Identify areas of greatest value-at-stakeData You'll Need to Identify Value-at-StakeInterpreting Economic ProfitGetting More From Your Waterfall ChartStep 2: Analyze the strategic position of selected value-at-stake unitsData You'll Need to Evaluate Strategic PositionUsing and Interpreting Strategic Position DataMining Market Profitability and Competitive Position DataOutcome of Strategic AnalysisStep 3: Develop a Complexity Profile of selected business unitsData You'll Need for a Complexity ProfileCharting and Interpreting a Complexity ProfileWhat You Can Learn From a Complexity ProfileSummarizing Phase 1 Lessons: Sources of exploitable advantageConclusionChapter 7 Map & Quantify the Impact of Complexity (Complexity Analysis Phase 2)Overview of Mapping Complexity & Quantifying ImpactStep 4: Identify the strategic value of your core processesEGI Case Study, Part 1: Core Process AnalysisStep 5:. Determine family groupingsEGI Case Study, Part 2: Identifying product familiesStep 6: Create a Complexity Value Stream MapEGI Case Study, Part 3: CVSMStep 7: Computing PCE baselinesData You'll Need to Compute PCE BaselinesCalculating PCE Baselines: EGI exampleConclusionChapter 8 Build a Complexity Value Agenda (Complexity Analysis Phase 3)Overview of Developing a Complexity Value AgendaStep 8: Calculate EP% for offeringsData You'll Need to Calculate EP% by OfferingStep 9: Perform a substructure analysisData You'll Need to Perform a Substructure AnalysisInterpreting a Substructure AnalysisStep 10: Calculate PCE Destruction and complete a Complexity MatrixData You'll Need for PCE Destruction and the Complexity MatrixCompleting and Interpreting a Complexity MatrixStep 11: Evaluate potential impact of process or offering changesPath A: Value creation from process improvementPath B: Value creation from offering improvementAdding Numbers to the Options: What-If analyses with the Complexity EquationStep 12: Select options and build business cases for selected opportunitiesStep 13: Create a Complexity Value Agenda (and Execute!)The EGI Case Study: Prioritizing and Building a Value AgendaConclusionPart III Implementing Complexity AgendasChapter 9 Simplifying Product and Service Lines Going for Big Gains in Economic ProfitThe Pricing LeverSimplifying Product or Service Configurations: Exploiting naturally occurring configurationsAdjusting Your Customer PortfolioOptions for Deletion of a Product or ServiceManaging DeletionsRoadblocks to SimplificationConclusion: Biting the simplification bulletChapter 10 Finding the Complexity That Customers ValueA Case Study in Choice ExplosionWhat Customers Want vs. What They ValueTechnique #1: Key Buying Factor analysisTechnique #2: Kano analysisTechnique #3: Functional analysisTechnique #4: Conjoint analysisConclusion: Considering complexity when developing customer-focused strategiesChapter 11 Avoiding the Big Costs Using Complexity Principles to Simplify Product DesignsSimplicity Principle #1: Emphasize commonalityA. Commonality Through ModularizationB. Commonality Through PlatformsCase Study: IPM's applications of platform thinkingBenefits of CommonalitySimplicity Principle #2: Exploit design reuse/recyclingSimplicity Principle #3: Design with the life cycle in mindBenefits of Life Cycle Planning and ExecutionExample: Simplifying brake design in bikesImproving Design-to-Market Cycle TimeConclusion: Start with the end in mindChapter 12 Achieving Service and Process Simplicity Optimizing work flow with Lean, Six Sigma, and complexity toolsComplexity and WasteApproach #1: Exploit commonality to reduce duplicative effortApproach #2: Ensure standardization of tasksApproach #3: Eliminate the delays and impact of task startup and task switchingThe Four Step Rapid Setup MethodConclusionChapter 13 Using Information Technology to Deliver Complexity at Lower CostUsing IT to Deliver Variety (Good Complexity) at Low CostThe Cost of IT ComplexityFighting Back Against IT ComplexityPrinciple #1: Don't rely on IT to fix a broken process (it won't!)Principle #2: Reduce the complexity in your systems architecture (because your customers won't pay for it!)Principle #3: Outsource complexity where strategically desirablePrinciple #4: Use modularity in your hardware and softwareConclusionPart IV High-Return Investments When Conquering ComplexityChapter 14 Creating a Culture that Can Conquer ComplexityCultural Ingredient #1: Believe conquering complexity is an imperativeCultural Ingredient #2: Ongoing executive engagementCultural Ingredient #3: Target high value-at-stake opportunitiesCultural Ingredient #4: Dedicate organizational resourcesCultural Ingredient #5: Provide an analytical methodology and toolsetCultural Ingredient #6: Align metrics, incentives, policies with complexity goalsCultural Ingredient #7: Nurture close customer connectionsConclusionChapter 15 Conquering Complexity in Your Product and Service Value ChainValue Chain Configuration: Extracting the full value from conquering complexityStrategic Sourcing: How complexity drives the make-or-buy decisionManaging Upstream Complexity: Strategic supplier segmentationPlanning for Value Chain ChangesDownstream Complexity: Smashing the retail paradigmsConclusionChapter 16 Applying Complexity Principles to Mergers and AcquisitionsComplexity Due DiligenceWin the Deal, Lose the SynergiesAddressing Complexity Can Accelerate IntegrationMaking Complexity Due Diligence (and M&A) a Repeatable ProcessConclusionAppendixIndex
Responsibility: Michael L. George.


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"The cost of complexity isn't offset by what you can charge. Complexity creates opportunities for you to fail your customer." (American Airlines President Gerard Arpey, Wall Street Journal, Read more...

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