The Architecture of Simplicity

The Architecture of SimplicityAuthor(s): Danny MillerSource: The Academy of Management Review, Vol. 18, No. 1 (Jan., 1993), pp. 116-138Published by: Academy of ManagementStable URL: http://www.jstor.org/stable/258825 .

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I Academy of Management Review 1993, Vol. 18, No. 1, 116-138.

THE ARCHITECTURE OF SIMPLICITY

DANNY MILLER cole des Hautes etudes Commerciales and McGill University

This article argues that over time the world views, goals, strategies, cultures, and processes of successful organizations will become more pure or "simple": They will come to focus more narrowly on a single theme, activity, or issue at the expense of all others. This is explained by managerial, cultural, structural, and process factors within the organization. It is also attributed to both the complementary way in which these factors configure and the paradox that although simplicity may trigger ultimate failure, it can bring about initial success. The article offers some illustrative propositions concerning the nature, causes, moderating factors, and consequences of simplicity, and it makes suggestions for conducting further research.

Researchers have claimed that successful organizations fail because they have lost their edge: Star marketers lose touch with their customers, brilliant innovators become stale, and high quality producers start to turn out shoddy merchandise (Deal & Kennedy, 1982; Peters & Waterman, 1982; Weitzel & Jonsson, 1989). This article offers a contrary thesis: It argues that most outstanding organizations lapse into decline precisely because they have developed too sharp an edge. They amplify and extend a single strength or function while neglecting most others. Ultimately, a rich and complex organization becomes excessively simple it turns into a monolithic, narrowly focused version of its former self, converting a formula for success into a path toward failure.

Even though this problem has been neglected by the literature on organizational decline (Cameron, Whetten, & Kim, 1987; Hambrick & D'Aveni, 1988; Murray & Jick, 1985; Weitzel & Jonsson, 1989; Whetten, 1980), a good deal of rich anecdotal evidence suggests that increasing simplicity victimizes many once-outstanding organizations. Meyer and Starbuck (1991), Miller (1990), and Starbuck, Greve, and Hedberg (1978) have presented numerous examples of formerly thriving companies that came to focus-almost to the exclusion of everything else-on the one goal, aspect of strategy, department, or even skill that they credited for their success. Indeed, the business literature is full of such accounts (see Hal- berstam [1986] on Ford Motor Co., Wright [1979] on General Motors, Lyon [1984] on Dome Petroleum, and Colvin [1982] on ITT).

Control Data, Polaroid, and Wang Labs, for example, which had suc-

I would like to thank Jean-Louis Malouin and Bai Park for their useful comments.

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ceeded by out-innovating their competitors, turned this policy into an obsession. They began to concentrate only on technological innovation- no matter what the costs or the needs of the customer. Marketing, production, and financial considerations fell by the wayside as the departments handling these activities became less influential and the power of the R&D elite mounted. Subsidiary goals of service and market penetra- tion were driven out by an increasing obsession with scientific progress. And the organizational culture became more homogeneous as dissenting managers left. Even corporate systems and routines came to monitor and control mainly technical matters while ignoring issues of quality or prof- itability (Miller, 1990).

The Notion of Simplicity

The Concise Oxford Dictionary defines simple as "not compound, consisting of one element, all of one kind, involving only one operation or power." In the context of this paper, simplicity is an overwhelming pre- occupation with a single goal, strategic activity, department, or world view-one that increasingly precludes consideration of any others. As simplicity increases in a company, secondary issues are forgotten, and the parties responsible for them lose influence. The organization becomes more monolithic, with its members and subunits having fewer and increasingly similar preoccupations and its systems becoming more specialized.

There are both objective and subjective varieties of organizational simplicity, and most of these are interdependent. The objective varieties include dominance of a single goal or subunit, information systems and routines that reflect only a narrow range of skills and concerns, and a lion's share of resources going to one central tactic or activity. But simplicity may also be reflected subjectively, by the narrowing, increasingly homogeneous managerial "lenses" or world views that often underlie the more objective forms of simplicity.

Simplicity Versus Inertia, Momentum, and Convergence

Simplicity is related to, but very different from, the much-discussed notions of inertia, momentum, and convergence. Inertia is resistance to change, or, at least, resistance to changes that run counter to a funda- mental existing orientation. Hannan and Freeman (1984) claimed that inertial programs and routines increase an organization's reliability of functioning but limit its capacity to change. However, inertial structures, processes, or systems need not be simple. Inertia limits only interperiod variety, but simplicity implies little variety at a point in time.

Simplicity is also different from Miller and Friesen's (1980a, 1984) notion of momentum-the tendency to extrapolate previous directions of evolution in strategy and structure, and from Tushman and Romanelli's (1985) concept of convergence the idea that organizations incrementally build upon or refine an existing orientation. In fact, momentum or con-



118 Academy of Management Review January

vergence can result in more elaborate and complex orientations as well as more simple ones.

We shall see that simplicity can be influenced by many of the same things that cause inertia. It also can increase inertia by so narrowing organizational attention that the need for reorientation goes unrecog- nized. Moreover, inertial routines and processes can, in turn, contribute to simplicity. Nonetheless, the two concepts are quite distinct.

Simplicity and Performance

Escalating simplicity can have dire consequences for the performance of an organization. This problem, perhaps, is best illustrated by the law of requisite variety. According to Buckley (1968: 495), this law states that "the variety within a system must be at least as great as the environmental variety against which it is attempting to regulate itself. Put more succinctly, only variety can regulate variety." Weick (1979: 189) reinforced this point:

If a simple process is applied to complicated data, then only a small portion of that data will be registered, attended to, and made unequivocal. Most of the input will remain untouched and will remain a puzzle to people concerning what is up and why they are unable to manage it.

In other words, if an organization were too simple to manage the complexity of its environment, its very survival might be threatened. Par- adoxically, however, simplicity can initially bring great rewards when it marshalls the strengths of an organization to accomplish what it does best. But success is not only a product but a cause of simplicity.

The thesis of this article is that in the long run, success will cause many organizations to become more "simple." Their rich strategic character will devolve into bland and truncated caricature. Cultures, systems, processes, and world views will become too monolithic to allow organizations to embrace and adapt to the complex currents of their settings. And, ultimately, these developments will result in companies' reflecting the winds of change not with the responsiveness of sandy terrain but with the inertia of a field of boulders.

Our global expectations can be summarized by two propositions:

Proposition 1: In successful organizations, primary goals, values, and strategies will be pursued more ag- gressively, whereas secondary ones will be increasingly neglected.

Proposition 2: All varieties of simplicity will increase as a function of the duration and degree of success in achieving the goals of the dominant coalition.

Proposition 2 helps to establish the scope of our analysis. It suggests that the more successful a firm is in achieving the goals most valued by



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its dominant managers, and the longer the interval of success, the more likely and the more pronounced the organization's move toward simplicity. Firms whose performances are poor or whose intervals of success are interrupted by occasional shocks of disappointment are more apt to preserve a healthy level of doubt, debate, and diversity.

The balance of this article will present three classes of reasons for this encroaching and dangerous simplicity. First, individual managerial, cultural, structural, and process factors provoke simplicity. Such factors include organizational learning; the "natural selection" of values, heroes, and skills; and confining programs and routines. Second, these factors tend to interact, generating increasingly pure and simple corporate configurations-constellations that become ever more aligned with a single dominant theme and less tolerant of deviation or variation. Third, a trou- blesome paradox exists: The sources of dangerous simplicity may underlie initial success and, thus, may be doubly difficult to combat. Indeed, it is very hard to distinguish between the concentration and passionate dedication so necessary for success and competitive advantage and the simplistic fixations and extremes that lead to failure. The article closes by operationalizing the notion of simplicity and summarizing the propositions concerning its evolution, causes, facilitating conditions, and consequences.

MANAGERIAL FACTORS

The "Lenses" of Experience

Organizational simplicity is caused, in part, by managerial learning and the initial successes it brings. At first, new managers grope to find out more about their environments. But over time, positive reinforcements induce them to search more narrowly. Ultimately, experienced managers form quite definite opinions about what works and why (Levitt & March, 1988). Such thinking is especially true of the executives of thriving organizations who credit-and therefore cling to-past behaviors, policies, programs, and strategies (Bettman & Weitz, 1983; Milliken & Lant, 1991; Staw, McKechnie, & Puffer, 1983).

Experience, in other words, shapes the lenslike cognitive structures through which managers see the world. These structures take the form of established sets of values, assumptions, and beliefs. According to Nys- trom and Starbuck (1984: 55):

What people can see, predict, understand depends on their cognitive structures-by which we mean logically integrated and mutually reinforcing systems of beliefs and values. Cog- nitive structures manifest themselves in perceptual frameworks, expectations, world views, plans, goals, . . . myths, rituals, symbols ... and jargon.

These lenses dictate what managers will perceive, what they will ignore, and how they will interpret their perceptions. Gradually and un-




consciously the lenses harden and focus more narrowly around those notions that have been-or appear to have been-most thoroughly vindicated (Staw, Sandelands, & Dutton, 1981). The same kinds of stimuli then get targeted for attention, and the same mental frameworks are used to understand them (Starbuck & Hedberg, 1977). Thereafter, managers are likely to be more consistent and more selective in what they attend to (Levinthal & March, 1981; Starbuck & Milliken, 1988).

Single-Loop Learning Versus Double-Loop Learning

Serious and persistent problems may force managers to broaden their horizons. But in successful organizations, managerial learning will be biased toward honing existing categories and attributing success, often superstitiously, to a single pet policy (Levitt & March, 1988; March, 1991). Again, the result is a simpler, more consistent view of the world.

Argyris and Schon (1978) distinguished between typical single-loop learning and the much rarer double-loop learning. Single-loop learning occurs as organizations compare their performances to a set of preestab- lished standards and try to make appropriate adjustments. Most successful firms accomplish this procedure very well. Companies that differentiate themselves by producing products of superb quality, for example, adeptly hone the precision of their manufacturing processes. They pursue a single objective with increasing virtuosity.

Double-loop learning, on the other hand, requires that firms period- ically reassess standards themselves to ensure that these are relevant. Because this can be a costly and painful process, it is normally elicited only by major difficulties (March, 1991; Miller & Friesen, 1980a), which are rare among good performers. Healthy quality leaders, for example, do not question the broader appropriateness of their technical parameters and are reluctant to adopt potentially more relevant standards such as customer reactions (Miller, 1990b). Because the old standards are so closely tied to managerial goals, expectations, and world views, they are seldom reappraised. And when managers reevaluate their standards, it is not to challenge but to refine and extend them. Therefore, standards become more precisely focused, as do the strategies used to attain them.

Ambiguity, Rationalization, and Defenses

Skeptics might argue that disappointments will inevitably cause most managers to broaden or to abandon their views. Even in successful organizations, there are occasional small failures that should induce managers to reexamine their premises and to gather more broadly relevant information (Weick, 1979). Yet executives are unlikely to learn from these shocks because problems can be rationalized away as aberrations, as temporary, or as beyond management's control. And, as we shall see, the routines, information systems, and homogeneous cultures that de-



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velop in successful organizations further channel cognitions and values and make double-loop learning very difficult.

Unfortunately, managers are more likely to broaden their knowledge if upsets are multiple, earthshaking, or linked unambiguously to one specific behavior (Mintzberg, 1989: 35-37). Such instances are rare, especially in thriving organizations. As Staw (1977: 468) has claimed, the attributions administrators make in deciding which of their behaviors is effective are often inaccurate, "given the incomplete and confounded data" with which they must work. Weick (1979: 175) argued that "the environment is full of equivocal cues that are easy to misinterpret-multiple significations-they fit numerous classifications and might be indicators of any one of several states." Thus, most organizational disappointments may easily be dealt with through "retrospective rationalizations."

Managers may, for example, attribute success to their own actions and absolve themselves of responsibility for any failures (Bettman & Weitz, 1983; Miller & Ross, 1975). They interpret weak clues as indicating that their favorite strategies have led to success (Salancik & Meindl, 1984; Staw, McKechnie, & Puffer, 1983; Staw & Ross, 1978). Marketers attribute victory to good marketing; engineers credit good design; and both blame failure on "the economy" or "the guys down the hall."

Staw (1976) demonstrated just how hard it is for administrators to "backtrack" or make decisions that can be construed as an admission of previous error. Indeed, many managers may actually escalate their commitment to a particular course of action in the face of disappointments in order to vindicate their convictions.

Managers' defense mechanisms also may prevent them from broad- ening their beliefs and policies. Most executives are so committed to the strategies and cultures they have nurtured that it is painful for them to admit that these are obsolete. So they might deny that there is a problem, believe that the problem isn't serious, or think that others are trying to steal power by attacking their contributions (Kets de Vries & Miller, 1984).

Overconfidence and Intolerance

Success not only narrows executives' perceptions, it also changes their attitudes. It can give them too much confidence in a single way of conducting business or in one dominant element of strategy. Successful leaders have triumphed over their competitors and are worshiped and idolized by subordinates; they have had many of their opinions enshrined in policies and vindicated by the turn of events. So many leaders become cocky and overconfident and are emboldened to take reckless, impulsive actions. Successful diversification strategies, for instance, may prompt managers to pursue more ambitious and wide-ranging acquisitions (Kets de Vries & Miller, 1987). Pioneering firms that do well often accelerate their pace of innovation (Bylinsky, 1973). And brilliant salespeople become con- vinced that they can market anything through aggressive selling techniques (Miller, 1990b). Attention to most other aspects of strategy wanes.




Success also can make leaders intolerant of opposing points of view. In some cases, bosses become bullies who resent criticism and isolate dissenters. They nurture corps of sycophants and foster a monolithic band of like-minded decision makers (Zaleznik & Kets de Vries, 1975). In es- sence, all capacity for frank discussion and organizational learning is lost.

The arguments of this section give rise to the following proposition:

Proposition 3: In successful organizations, managerial world views will become more homogeneous and will focus on ever fewer objectives, issues, and cues from the environment.

CULTURAL FACTORS

If managerial factors make successful organizations simpler, then so do many aspects of corporate culture. A culture is a constellation of basic views and assumptions, expressed as beliefs and values, that is shared by the key members of an organization. A culture gives an organization its identity, both to its members and to outsiders (Deal & Kennedy, 1982; Frost, Moore, Louis, Lundberg, & Martin, 1985).

Natural Selection of Values

According to the population ecology view, the environment helps to extinguish dysfunctional forms of organizations while it encourages the proliferation of more viable ones (Aldrich, 1979; Hannan & Freeman, 1977). Such ecological forces also may be at work inside organizations, "selecting in" or reinforcing the values and behaviors associated with success and "selecting out" or extinguishing those values and behaviors that are deemed to be peripheral, unsuccessful, or unimportant (Burgelman, 1991; Campbell, 1970; Singh, 1990). Over time, the culture of the organization comes to focus more narrowly and passionately on one or two pervasive and dominant goals. Such strong cultures can make work meaningful, can galvanize employees to take action, and can generate tremendous enthusiasm. But they may also mire managers in a single way of seeing and doing things. They can bring about oppressive conformity, blindness, and intolerance. Indeed, Irving Janis (1972: 197) argued that the more cohesive the group and the more it distinguishes and insulates itself from other groups, the more conformist and intolerant its members. Ironically, the dedicated, rousing corporate cultures so eloquently lauded by Deal and Kennedy (1982) are precisely the ones that may be the most suscep- tible to a hazardous "groupthink" narrowness.

Departmental Dominance

If particular goals and values can come to dominate organizations, then so can the departments that best embody these goals and values. Successful quality leaders get taken over by production-engineering ca- bals, image differentiators by packs of marketers. Again, a selection pro-



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cess helps to explain how this happens (Burgelman, 1991). Innovator firms, for example, because they so greatly value innovation, usually accord some initial primacy to their R&D group. Researchers are avidly recruited, handsomely rewarded, and quickly promoted. This swells their ranks, attracts the best candidates, and boosts the power, resources, and impact of the R&D department. The opposite is true for the manufacturing staff who become disenfranchised, are starved for resources, and have little chance of moving up the hierarchy. The best production people soon leave for companies where they will be appreciated; the worst ones stay because they have little choice. This further erodes the production department's reputation. In this vicious circle, favored R&D types become more numerous, more talented, and more influential-and the opposite happens to manufacturing managers (Miller, 1990b).

The increasing dominance of a single department creates a monolithic culture, in which all influential managers embrace the same highly constrained values and strategies. The effect of such a culture is to dramatically narrow managers" viewpoints, abilities, and options. Gareth Morgan (1986: 242) referred to such organizations as developing an "ego- centric self-image":

They draw boundaries around a definition of themselves, and attempt to advance the self-interest of this narrow domain. In the process, they truncate their understanding of the wider context in which they operate, and surrender their future to the way the context evolves.

Specialized Knowledge

Over time, a thriving organization hones and focuses its set of ideas and the technology that is associated with it. Kim Clark (1988) has argued that an organization's technologies stabilize and become more specialized. Its employees develop a narrow knowledge base; they know how to do various tasks, but they forget why work is done in a specific way. In a sense, the search for comprehension is replaced by the quest for refine- ment (March, 1991). The result is that most organizations unreflectively embrace a narrowing set of skills and employ people whose knowledge is confined to a single technology (Meyer & Starbuck, 1991; Miller, 1990b).

In a more general vein, successful organizations come to concentrate only on certain skills-those required to implement their current strategies and those corresponding to the knowledge of only the most esteemed managers and departments (Tushman, Newman, & Romanelli, 1986). Sec- ondary skills are lost because the practitioners of such skills fail to garner much power or respect (Milliken & Lant, 1991). And strategy becomes increasingly constrained by this narrowing skill set.

The above arguments suggest the following proposition:

Proposition 4: In successful organizations, values will become more homogeneous, reducing subunit differen-




tiation; a single department or elite will become more dominant; and the skill set of the organization will narrow. These changes will contribute to the formation of monolithic cultures and strategies.

STRUCTURAL FACTORS

Structure defines an organization's reporting relationships, power, and job responsibilities. And by doing so, it profoundly channels both managers' perceptions and the way in which they make decisions.

Programs and Routines

Strategies tend to remain stable in successful organizations because there is little incentive to alter them (Miller & Friesen, 1980; Tushman, Newman, & Romanelli, 1986). This stability makes strategies more sus- ceptible to explicit codification and routinization, which, in turn, makes them narrower and still more change resistant. The more an organization's goals and tasks are factored into routines and programs, the more these restrict and homogenize the range of things its managers think about (Cyert & March, 1963; March & Simon, 1958; Nelson & Winter, 1982). Routines also create unconscious premises for action. For example, managers begin to react automatically to signals from standard operating procedures, machine deterioration, or work-in-process, as they increasingly ignore stimuli not explicitly captured by the routines (Perrow, 1986).

In fact, Starbuck and Hedberg (1977: 250) argued that an organization's adaptation to its markets becomes stylized and frozen by routines:

The organization sets up behavior programs that promote ha- bitual responses to expected cues.... Because situations appear equivalent as long as they can be handled by the same programs, programs remain in use long after the situations they fit have faded away. . Continued success incubates potential failure, by increasing an organization's dependence on its programs.

Programs and routines restrict perceptions and activities and reinforce existing policies by recognizing only recurring and anticipated problems, suggesting only conventional courses of action, and implementing only traditional solutions. Routines can promote innovation- but only of a sort that is in line with current ideologies and strategies (Nelson & Winter, 1982). Routines also may be perpetuated by values of efficiency (Hannan & Freeman, 1984), so that expedient procedures become codified and endure, while the rest die out (Starbuck, 1985).

The Concentration of Power

In thriving organizations, power will usually gravitate toward those dominant departments and individuals that have been identified with past successes; it will recede from others (Pfeffer, 1981). This trend favors



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existing goals, strategies, and structures, which, in turn, reinforce the power of the dominant coalition.

In successful organizations, the strong get stronger and the weak get weaker because power is self-perpetuating. Powerful managers have ad- vantages in any political struggle that allow them to gain more resources, hire or promote like-minded individuals, and buy off resistors (Mintzberg, 1983). They may even set standards of performance that ensure that they will look good (Starbuck, 1985). Moreover, powerful managers surround themselves with the daunting trappings of position and achievement, especially when they have been successful. This aura makes their authority ever tougher to challenge because it has become institutionalized (Pfeffer, 1981; Zucker, 1987).

The concentration of power focuses strategy ever more tightly on the values and interests of the dominant coalition (Pettigrew, 1973). If, for example, marketers dominate, the core strategy will come to center on marketing. Conversely, successful strategies bring respect and influence to the parties who developed them. Hence, managers have an incentive to concentrate only on the strategies that reward them, to reinforce only the goals that they believe in, and to refine only the structures that consolidate their power (Milliken & Lant, 1991).

These arguments suggest the need to modify the contingency theory of power put forth by Hickson, Hinings, Lee, Schneck, and Pennings (1971). Certainly, it is reasonable that the organization should empower the departments and individuals that are best able to handle the contingencies most critical for its survival. It is also clear that if the environment changes to make a less critical department more important, it may indeed be sensible to accord more discretion to that department. Unfortunately, as we have argued, power begets power, and those at the top might be unmotivated to give up their authority. Given the narrowness of existing routines and world views, top managers may not even recognize that the environment has changed, especially if the firm continues to perform adequately, or if it has an admirable track record. Only in the long run, after the problems created by simplicity and stagnation have shown up very clearly and persistently, will an organization consider reallocating power according to the tenets of the strategic contingency theorists (Pfef- fer, 1981; Pfeffer & Salancik, 1978). Even then, such a change will most likely occur after a new CEO has been hired (Miller, 1991; Miller & Frie- sen, 1984; Tushman, Virany, & Romanelli, 1989).

PROCESS FACTORS

Central organizational processes include information gathering and analysis, decision making, and managing relationships with the environment. Each of these is in many ways a function of the managerial, cultural, and structural factors we have already discussed. But each of these processes also can contribute in its own right to organizational simplicity.




Skewed Learning and Information Systems

Organizational information systems reinforce the uniformity of perceptions and the complacency that feed cultural and strategic simplicity. With their selective reporting and implicit standards, organizational intelligence systems increasingly mirror only established perspectives, goals, and values. And by filtering what managers attend to and con- cealing external change, they help to channel and constrain these very goals and perspectives (Huber, 1991; March, 1991; Meyer & Starbuck, 1991). Marketing differentiators, for example, pay ever more attention to market share and sales growth figures, and cost leaders to budgets and expense reports. An avid marketer may therefore become less and less aware of declines in quality or efficiency; a cost leader may begin to ignore customer dissatisfaction.

As Starbuck (1985: 353) argued:

Data tend to confirm what the programs assume to be true: the gathered data may show mainly good results even when poor results prevail, because people are gathering few data where poor results show up. For instance, people do not monitor events that they believe to be tangential or phenomena that they assume to be stable.

Feldman and March (1981: 186) claimed that information in organizations is subject to "strategic misinterpretation."

It is collected and used in a context that makes the innocence of information problematic. . . Often information is produced in order to persuade someone to do something. It is obvious that information can be an instrument of power.

The propensity for quantitative data of most information systems also introduces biases. Many longstanding cost leaders pay lots of attention to cost figures but fail to notice whether cost cutting erodes customer satis- faction-a qualitative notion not tracked by their intelligence systems (Ashton, 1976). Even when systems gather the right information, the political agendas of managers may induce concealment or deliberate misinterpretation of information (Hardy, 1990; Pettigrew, 1973). Finally, many intelligence systems are used to gather information concerning the re- turns made from an organization's exploiting its existing technologies, products, and markets; these systems are rarely used to assess the potential rewards that could be gained from experimenting with new technologies, products, or markets (March, 1991).

Many organizations develop special vocabularies, which act as information systems in that they emphasize some parts of reality and ob- scure others (Perrow, 1986). For example, standards of quality may be expressed as strength or hardness coefficients-which, when they become irrelevant to what customers really need, give managers the false



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sense that they are producing superior merchandise. The vocabulary par- ticularizes the activities or standards that it is meant to describe, and so these standards become narrow and confining.

Preprogrammed Decision Making

The proponents of "synoptic" or comprehensively analytic decision making view managers as monitors of the environment who compare a firm's achievements to its goals in order to identify problems. Such problems are then resolved when managers choose an appropriate solution from a thoroughly researched and elaborated set of sensible alternatives (Ansoff, 1984; Steiner, 1979). In that way, strategies can be renewed and kept up-to-date. The fact is, however, that in successful organizations most activities do not take place in response to problems, but rather because policies, strategies, and programs automatically generate particular actions (March, 1981). As Starbuck and Hedberg (1977: 254) explained:

An organization ordinarily generates potential actions with- out the stimulus of specific problems, just because an organization is designed to generate actions. Generated actions become potential solutions on the ground that they appear to be good actions-they are consistent with past behaviors, they resemble what other organizations are doing . .. they are fun.

Managers engage in retrospective sensemaking, employing yester- day's categories to interpret and explain today's perceptions. According to Weick (1979), decision processes are abbreviated, reflection is unusual, and interpretations based on habit and reflex dominate.

As we have argued, routines, job definitions, and information systems create the premises for decision making. They direct managers' expectations, and thereby their perceptions, to produce predictable decisions. In fact, the organization controls both information and the premises for action (March & Simon, 1958). And this makes it increasingly likely that strategies will respond more to stable internal concerns than to fluctuat- ing external ones (Steinbruner, 1974). Simplicity begets simplicity.

For example, quality leaders are quick to identify problems with quality-an important goal and a central aspect of strategy. There are explicit quality standards, as well as programs, special departments, and information systems for monitoring quality. In fact, actions are generated to continue to improve quality-simply on the basis of programs- rather than in response to market needs. However, such firms often fail to notice that their product lines are aimed at shrinking markets. There are no explicit goals or programs that are called into play by the declining market, no information systems to tell managers exactly what is going on, no standards against which to measure things, and no departments spe- cifically charged with tackling the problem (Starbuck, 1985).




The Enacted Environment

It could be argued that strategic simplicity might be counteracted in firms that try diligently to adapt to the variations in their environments. Unfortunately, most organizations spend much of their time "superimpos- ing a variety of meanings on the world" (Weick, 1979: 175). Managers implicitly choose which aspects of their environments to attend to, and their world views, interests, and biases shape these choices. The "environment," then, is at least in part an artifact-a product of a manager's mind set. And the organization is molded, managed, and changed via this mental construction. According to Karl Weick (1979: 28):

Organizations create and constitute the environment to which they react; the environment is put there by the actors within the organization and by no one else. This reasserts the argu- ment that the environment is a phenomenon tied to processes of attention, and that unless something is attended to, it doesn't exist.

Biologists Humberto Maturana and Francisco Varela (1980) pursued this theme even further; they argued that all living systems do not adapt or respond to an objective environment as much as they define that environment via their peculiar interests and capacities. Such systems are autopoetic; they are

self-referential because [they] cannot enter into interactions that are not specified in the pattern of relations that define [their] organization. Thus a system's interaction with its "environment" is really a reflection to part of its own organization. It interacts with its environment in a way that facilitates its own self-production, and in this sense we can see that the environment is really part of itself. (Morgan, 1986: 236)

Similarly, formal organizations "are always attempting to achieve a form of self-referential closure in relation to their environment, enacting their environment as projections of their own identity or self image" (Mor- gan, 1986: 240).

Thus, marketing-dominated firms see customers as key aspects of the environment; quality leaders see various technological developments and cost factors as crucial; and entrepreneurs view interest rates and the legal climate for mergers and acquisitions as all-important. By fine tuning strategies and structures to cope with these external forces, organizations are not so much adapting as honing, refining, and focusing themselves according to their interests and world views.

Of course, managers do not just simplify their models of the environment; often they actively try to simplify the environment itself. They may do this by catering only to customers they can serve best, by shaping and homogenizing the needs of these customers via mass communications, and by co-opting or buying off powerful parties who might insist on vari-



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ation (Hrebiniak & Joyce, 1985; Perrow, 1986; Pfeffer & Salancik, 1978). For example, in order to maintain simplicity, quality leaders may pursue customers who value quality and steer clear of those who want state-of- the-art equipment. Such policies can focus an organization in two ways: They limit the range and variety of action that is required, and they reduce the occasion for second-order learning.

The arguments of the prior two sections suggest

Proposition 5: In successful organizations, systems, structures, and processes will become tailored to a narrower set of tasks; for example, routines will become more specialized, information systems will be honed to monitor a smaller set of concerns, and the power distribution will become more skewed. Departments and executives that are credited with past success will become more powerful and influential. Other departments will lose power and influence.

CONFIGURATIONS

As yet, we have only dealt individually with the factors that contribute to simplicity. However, these factors interact to produce increasingly integrated and thematic "configurations." Over time, the alignment among many aspects of culture, strategy, and structure becomes tighter and more consistent. Eventually, much variety vanishes from the system, which starts to conform more and more to one central theme (Miller, 1990a, b; Miller & Friesen, 1980a; Tushman, Newman, & Romanelli, 1986).

Strategies, structures, and cultures embody the purposes and goals and reflect the values and commitments of a dominant group of managers. As a result, many aspects of an organization are orchestrated by a core theme into a unified gestalt or configuration (Hinings & Greenwood, 1988; Miller & Friesen, 1984).

Many innovative firms, for example, are dominated by the themes of invention and pioneering. These are the primary goals of their missionary leaders, who center their strategies around product novelty and technological sophistication. Cultures reward invention and empower inven- tors, rendering the skill base of the organization R&D, not marketing or production. Structures also are made flexible to facilitate the development and implementation of new product ideas. Collectively, these qual- ities establish central strengths and weaknesses of an organization and give it a direction of evolution (Miller, 1987, 1990b).

Organizational configurations are highly thematic. Eventually, all aspects of an organization reflect the core set of values, goals, and interests. Strategy, for example, becomes mirrored by the culture and structure and vice versa. Try to reduce the level of innovation in an innovative firm and the culture will regenerate it. Try to bureaucratize, and the R&D strategy will demand the dismantling of confining routines. There is, in




effect, so much redundancy in the configuration that the theme of innovation is reinforced by many aspects of culture, structure, strategy, and process (Miller, 1990a).

Organizational configurations are by no means static. They can be likened to dynamic systems whose initial themes establish a character- istic momentum-a path of development that harmonizes and extends corporate ideologies, strategies, and infrastructures. Indeed, configurations seem to act as vortexlike force fields that progressively specialize and align values and behavior (Miller, 1987, 1990b).

Previously we said that organizations keep recreating themselves in their own images. They determine their futures according to the world views and programs of their pasts. We also noted that they are driven by a central theme that orchestrates strategy, structure, and culture. Finally, we saw how goals, strategy, structure, and culture reinforce each other. The result: over time, many successful companies fixate only on their core practices and propensities. They become largely autonomous closed systems that move inexorably toward narrowness, conformity, and excess.

These arguments suggest:

Proposition 6: Simplicity in managerial world views, goals, culture, strategy, skills, and the power structure will be mutually reinforcing and, therefore, highly cor- related.

Proposition 7: Simplicity in managerial world views, goals, culture, strategy, and skills will promote the use of more inertial routines, systems, and processes. But the latter aspects will, in turn, reinforce simplicity in the former.

THE ICARUS PARADOX

One of the most seductive traps that face outstanding companies is that the focus and simplicity that ultimately get them into trouble may once have been responsible for their initial successes. The brave Icarus of Greek mythology was given a pair of wax wings by his father Daedalus. Legend has it that Icarus flew so high, so close to the sun, that his wings melted and he plunged to his death in the Aegean Sea. Icarus's wings did indeed contribute to his downfall, but they also allowed him to soar to unprecedented heights. And therein lay their danger. Paradoxically, the ultimate cause of failure had once been the source of success.

The same paradox resides within the nature of competitive advantage. We maintained at the outset that simplicity is dangerous because it can blind managers and tether their organizations to a confining set of skills, concerns, and environmental states. Organizational variety then fails to keep up with the variety demanded by the environment. But writ- ers such as Peters and Waterman (1982) and Porter (1980) have argued that organizations must develop a distinctive competence. They also have



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maintained that different competencies such as cost leadership and differentiation are usually mutually exclusive and that firms must "stick to their knitting" and avoid the trap of being "stuck in the middle." Their message is that outstanding performance often demands dedicated, even passionate, single-mindedness. In short, simplicity initially may have given an organization a competitive advantage, so that what now seems to be the problem may once have been the solution.

The same duality is true for many of the other sources of organizational simplicity. Organizational learning, galvanized cultures, efficient routines, and orchestrated configurations contribute greatly to corporate success. Learning narrows managers' focus but sharpens their skills. Monolithic cultures are parochial, but they consolidate efforts around central goals. Routines constrain, but they dramatically improve efficiency and coordination. And configurations reduce flexibility, but they orchestrate strategy, structure, and culture to promote brilliant achievement.

Unfortunately, the difference between the simplicity required for success and the simplicity that leads to failure is often subtle. What appears to be narrowness to outsiders seems to the managers of outstanding firms to be "operating from strength," creative passion, or efficient concentration. How managers define excess will depend on their world views, standards, and history. And when these managers have excelled by concentration, a little more focus seems to be just the thing. To summarize:

Proposition 8: At first, increases in all varieties of simplicity will lead to an increase in organizational performance.

Proposition 9: Simplicity over long periods of time will eventually lead to lower organizational performance, especially in competitive and changing environments.

KEY CONTINGENCIES

Certainly, encroaching simplicity will not occur everywhere. As we have argued, it will be more common among organizations that have performed well for a long time than among those facing difficulties. Pain is the physician that most managers heed; it often serves as the primary incentive for healthy skepticism and questioning (Miller & Friesen, 1980a). Significant changes in the environment such as a severe reces- sion, a major new competitor, or a wholesale technological change also may broaden managers' horizons (Levitt & March, 1988; Tushman & Anderson, 1986). And dominant firms that can ignore their competitors will be more likely to become simple than weaker companies that must do battle with dangerous and unpredictable rivals (Halberstam, 1986). Sim- ilarly, firms that lack slack resources will have to be more open to ac- commodating and thus reflecting external complexity than those that are




rich and fat (Hrebiniak & Joyce, 1985). Finally, companies operating within mature industries that have institutionalized modes of operation will be much more prone to fixing upon a narrow "recipe" than companies functioning in industries in which the ground rules have yet to be established (Meyer & Zucker, 1989; Zucker, 1987).

Various internal factors also may help preserve complexity. Gener- alist organizations are less likely to become simplified than specialists. The former face a greater and more variable range of customers and, hence, must preserve a wider and more flexible array of skills (Stinch- combe, 1959). A flatter, more decentralized structure, a broader set of values and stakeholders, and a respect for dissidents and nay-sayers may similarly serve as constructive sources of complexity (Lawrence & Lorsch, 1967; Quinn, 1980; Thompson, 1961). Participative management techniques such as liaison devices, task forces, committees, and spin-off units also can nurture different perspectives (Likert, 1961; Peters & Wa- terman, 1982).

The composition of the top-management team may be important as well. Promoting outsiders to positions of significant authority, although potentially disruptive, can help to negate encroaching simplicity (Allen, Panian, & Lotz, 1979; Hambrick & Fukutomi, 1990; Helmich, 1978). The succession of a CEO will encourage new managerial perspectives and suppress the political factors that promote narrowness (Carroll, 1984; Helmich, 1978; Tushman, Virany, & Romanelli, 1989). Complexity might even be preserved where the dominant coalition of the organization is composed of individuals from a variety of functional areas (Milliken & Lant, 1991).

Unfortunately, many of these remedies are themselves precluded or extinguished by the very forces of simplification that they are intended to combat. Also, they may well entail short-run collateral costs of confusion, conflict, and inefficiency. To recap:

Proposition 10: Simplicity will be less prevalent, even under conditions of success, where (a) new top managers, especially outsiders, have just risen to power; (b) a generalist strategy is being pursued; (c) cultural and structural heterogeneity and participativeness are cher- ished; (d) the environment is turbulent; and (e) there are few institutional constraints.

RESEARCH IMPLICATIONS

In order to test our ten propositions, simplicity can be operationalized in a number of different ways-both objective and subjective. The growing simplicity of a business strategy may be reflected by an increasingly skewed allocation of resources; for example, a constantly growing per- centage of resources going to the dominant activity, function, or tactic



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and a persistently declining proportion going to all others. Pioneer organizations, for instance, might spend more and more on R&D and ever less on marketing and quality control. Simplicity in processes and systems may be assessed by the range of data collected or used. For example, plans, information systems, and reports may come to concentrate on fewer indicators. More reliance might be placed on highly formal, focused information systems, but there will be less broadly targeted, informal scanning. Cultural simplicity in the form of a narrowing array of values might be evidenced by major promotions coming from only a single department, or by minutes of meetings or annual reports that focus on fewer and fewer issues, activities, and goals. Subjective cultural simplicity may be reflected by the increasing dominance of a single goal and by the growing consensus about various objectives, activities, and external events. Finally, simplicity in the power distribution may be reflected by the concentration of all authority, prestige, and legitimacy in one department or person.

Researchers can assess how smoothly and quickly different forms of simplicity evolve by measuring the above indicators at regular intervals. They might try to establish if and how much the evolution of simplicity is influenced by the duration and degree of past success; the prevalence of routines, processes, and slack resources; the distribution of power, organizational differentiation, and institutional constraints; and industry un- certainty and competition. In searching for the determinants of simplicity, researchers must examine a good number of time periods to get a true picture of the leads and lags among changes in performance, simplicity, and the organizational and environmental context. It will also be useful to control for takeovers, succession events, and major shifts in the environment because, as we have argued, these can counter or interrupt the forces that drive simplicity. Finally, because performance or context might have a rapid impact on strategic or tactical simplicity, but only a gradual influence on the more inertial aspects of culture or structure, researchers should take care to differentiate among the different types of simplicity.

The relationships between inertia and simplicity are worth investi- gating as well. Inertial routines and systems contribute to cognitive simplicity because they channel perceptions; this, in turn, fosters strategic simplicity. But cultural simplicity in the form of a single overriding goal, department, or value can promote the use of highly specialized routines and information systems that are themselves inertial. The latter can ob- scure developments in the environment that would indicate the need to change, resulting in further inertia-in this case, unresponsiveness. Re- searchers might want to determine whether changes in inertia precede or follow changes in the different varieties of simplicity and investigate if and under what conditions inertia influences performance more than does simplicity. They also may want to examine the environmental, organizational, and performance correlates of each kind of simplicity.




Finally, the performance implications of simplicity should be inves- tigated. Simplicity might be quite viable in stable environments, but it could lead to serious mismatches when external turbulence occasions the need for organizational reorientation.

CONCLUSION

The central tenet of the simplicity theory presented here is that over time most successful organizations become simpler, not more complex. The strategies of such companies, for example, turn into specialized rec- ipes. Cultures narrow to mirror the views and practices of a single group, and routines and systems become more focused. All of these trends interact to produce tight configurations-but, ultimately, these configurations become distended, exaggerated, and lacking in richness and sub- tlety.

Eventually, such companies will behave less like organisms and more like machines, so that surprise and randomness, the sources of much knowledge, are lost (Beer, 1966; Le Moigne, 1977). Activities become more thematic, more specialized, and more uniform. Before long, there is no more "noise" left in the system: no court jesters, no devil's advocates, no iconoclasts with any say, no countervailing models of the world (Stein- bruner, 1974). This conformity, of course, decreases flexibility, engenders myopia, and blocks learning and adaptation.

Paradoxically, however, if the "machine" is beautifully tuned and aligned with its environment, it can beat everything in sight. And these stellar successes are impossible to forget; they tempt and tantalize managers to go just a little bit further.

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Danny Miller received his Ph.D. from McGill University. He is a research professor of management policy and organization theory at the cole des Hautes etudes Corn- merciales of the University of Montreal and a visiting professor at the Faculty of Management, McGill University. His current research interests include organizational adaptation, transformation, and strategy formation.



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The Architecture of Simplicity