Management SummaryStern Stewart Research // Volume 66

Under the umbrella of ‘functional excellence’ almost all companies have pursued major, mostly successful efficiency programs. Functional cost went down, standardization increased, automation went up. Also, speed and flexibility of internal support functions to react to changing business needs have improved. So are we all there yet? When business reality hits the ground, we all know about the frustration of corporate complexity and bureaucracy still being there: non-value adding alignment rounds, long email lists, slow decision making, unnecessary service levels and the like. Fighting it to sustain the new normal is a difficult task. The problem: Cost of complexity is not visible in the P&L. And only pushing standardization and automation further will not serve the purpose.

To secure already achieved savings and to initiate the next optimization wave, complexity needs to be managed in a better way. It is key to distinguish between external and self-induced complexity. While the first mostly reflects customer demands that have to be met to stay in the market or deals with the application of new regulatory frameworks, the latter needs to be in focus. We believe in walking the CoRe (Complexity Reduction) toolbox. CoRe is a distinct set of widely known optimization instruments: zero-based dimensioning, delayering, sound internal demand management, lean governance, end-to-end process engineering – to name just a few. But the tools need to be directed to the company-specific drivers of complexity. And the focus is on execution, on masterful leadership, on living up to it and on following through with it.



Stern Stewart & Co. is the independent strategy boutique. With a truly entrepreneurial team of independent thinking personalities.
The center of gravity of an open universe of cutting edge know-how. Advising clients in strategy, transaction, performance and

Konstantin Wrona

Konstantin integrates a genuine interest in enhancing businesses with a goal-oriented and focused character. He plays these strengths not just when advising on group center structures, complexity reduction, process design or functional optimization. But also when driving the social business ACES in Ghana or competing in tennis and golf on an advanced level. Typically he is the one ensuring the proper methodology and bringing up the innovative ideas, which corresponds to his recent focus on improving digitalization and agility in organizations.

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Stefan Heppelmann

Stefan is an independent thinker and senior advisor mostly in transformation/ turnaround situations. Combining deep financial know-how as a CFA charterholder with two decades of consulting experience he often has the one inspirational idea. Discussing key themes of the executive agenda, he shows his entrepreneurial mindset with great personal involvement. Stefan is a true entrepreneur outside the office as well, managing his own agricultural venture in France and supporting Wend Puiré, an apiculture non-profit organization in Burkina Faso.

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