Effective complexity management is based on four pillars: alignment with the overall strategy of the company, transparency over all costs and benefits of complexity, identifying the optimization benefits, related measures and managing the trade-offs between parts of the total value chain (the totality of all the company's activities), and sustainable infrastructure such as IT tools, incentives and processes.
Measures to optimize complexity into the target status are defined and related qualitative (e.g. improved time to market) and quantitative (lower cost) benefits are determined.
At this time it becomes critical to actively manage the change and trade-offs between the value chain functions (such as R&D, procurement, manufacturing, logistics, and marketing & sales), so that the overall company-wide optimum can be achieved.
This infrastructure comprises IT systems and applications (e.g. optimized cost accounting and reporting), rules, KPIs, incentive schemes, a stringent organization and reengineered processes.
The direct approach with cutting the complex into pieces will fail, when overview on structure and contents get lost on the path to full explanation.